Global Economic Daily - 22/02/2024
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Quote of the Day: To the mind that is still, the whole universe surrenders. – Lao Tzu
Equities: Stocks were mixed on Wednesday with tech stocks struggling once again. The Dow Jones Industrial Average added 48.44 points settling at 38,612.24. The S&P 500 gained 6.29 points to end at 4,981.80. The tech-heavy Nasdaq 100 lost 67.19 points to close at 17,478.91. The Nasdaq Composite slid for a third session in a row Wednesday as traders looked ahead to Nvidia’s latest quarterly earnings report. Minutes released Wednesday from the Federal Reserve’s January meeting — which came on the back of hotter-than-expected economic data the previous week — indicated that central bankers are in no hurry to cut interest rates. Fed officials had decided to leave their key overnight borrowing rate unchanged, and also indicated that no rate cuts would occur until the Federal Open Market Committee has “greater confidence” that inflation is slowing down. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
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Crude Oil: Oil prices rose 1% on Wednesday as geopolitical tensions raged on in the Middle East and traders assessed signs of near-term supply tightness. Oil contracts tied to near-term deliveries have been trading at their steepest premium to later-dated contracts in multiple months, a market structure known as backwardation and considered a sign of a tightly supplied market. Also supporting the market, U.S. refineries are showing signs of returning from maintenance after slumping to their?lowest operating rates since December 2022, spurring builds in crude stockpiles. Figures from the American Petroleum Institute showed a larger 7.17 million barrel build in U.S. crude stocks. Official data from the Energy Information Administration is due at 11 a.m. ET on Thursday, delayed a day by Monday's U.S. holiday. Houthi attacks on commercial vessels in the Red Sea and Bab al-Mandab strait have continued to stoke concerns over freight flows through the critical waterway. Drone and missile strikes have hit?at least four vessels?since last Friday. The U.S. Federal Reserve is?concerned?about cutting rates too soon, minutes of its January policy meeting showed. Traders of U.S. short-term interest-rate futures stuck to bets the U.S. Federal Reserve will begin cutting interest rates no earlier than June. Concerns that rate cuts by the Fed could take longer than thought have been weighing on the outlook for oil demand. U.S. inflation data last week?pushed back expectations?for an imminent start to the Fed's easing cycle. TECHNICAL OUTLOOK - The crude is above the 14, 21 day moving average.
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Metals: Gold and silver prices are weaker in afternoon trading Wednesday but trading not far from levels seen just before the just-released report on U.S. monetary from the Federal Reserve. This afternoon’s release of the minutes from the last FOMC meeting of the Federal Reserve showed members remained significantly concerned about rising inflation despite the Fed’s monetary policy tightening likely having peaked. The minutes showed FOMC members want to see more progress on reaching the Fed’s 2% annual inflation level before lowering interest rates. The marketplace is likely deeming the minutes slightly hawkish, but not unexpected. Recent warmer U.S. inflation reports already had the marketplace thinking the Fed will hold off on lower interest rates until the second half of the year, if even then. Technically, April gold futures bears still have the slight overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,975.10. March silver futures bears still have the slight overall near-term technical advantage. However, a nine-week-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.50. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver is back below.
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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
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