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Market prefers safe-haven instruments at the start of the year


The market started the year 2023 in a safety mode, creating demand for US Dollars and Gold as safe-haven instruments while waiting for this week’s US key economic data and events.

The dollar advances, the yen stabilizes and the oil price drops sharply. US shares market falls lead to Asia stocks facing muted opening. The yield on 10-Year Treasuries falls by most in more than a month. \

US’s four most representative benchmark indexes DJIA, S&P500, NASDAQ and SOX were all close lower. Shares in Asia faced a muted opening Wednesday after a decline in US stocks and the price of oil signalled unease about the dimming outlook for the global economy. Treasuries and the dollar rallied, and the yen stabilized after a Tuesday jump. Equity futures for Japan, Australia, and Hong Kong each rose less than 1%. The 10-year Treasury yield fell 14 basis points to 3.74%, the biggest decline in more than a month. An index of the dollar rallied by the most in two weeks.

The S&P 500 ended Tuesday 0.4% lower, weighed down by energy and tech stocks. Among all eleven sectors in S&P500, Comm SVC, Financials Index, Real Estate Index, Industrials Index, and Utilities Indes gain positive price returns.  As for the Energy Index field, dropped by 3.62% on a daily loss.

Main Pairs Movement

The Dollar index, which tracks the U.S. Greenback against a basket of other major foreign currencies, surged more than 1% throughout Tuesday’s trading. The first official U.S. trading day witnessed a broad-based sell-off in the equities market, while market participants bid up the U.S. currency. Despite the surge in Dollar value, the U.S. 10-year treasury yield remained subdued over yesterday’s trading. The benchmark yield currently sits at 3.759% and the U.S. 2-year treasury yield sits at 4.382%.

EURUSD traded 1.11% lower throughout Tuesday’s trading. Risk-averse sentiment across markets helped buoy the Dollar against the Euro.

Cable lost 0.64% throughout Tuesday’s trading. The British Pound fared worse against the Dollar as market participants flighted to safety.

The Dollar denominated Gold rose 0.87% throughout Tuesday’s trading. The precious metal gained ground as market participants started the new year with caution in mind.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
USDISM Manufacturing PMI (Dec)23:0048.5
USDJOLTs Job Openings (Nov)23:0010M