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Economic data signal potential hike rates in the next meeting

  

Stay ahead of the game with today’s market insights brought to you by the expert team at vtmarkets.com.

US stocks advanced higher on Thursday, regaining upside momentum, and rose in a jittery session after US indexes trimmed part of their losses ahead of the close. The impressive rebound witnessed in huge companies like Microsoft Corp. and Apple Inc has underpinned the Nasdaq 100 despite the hawkish FOMC Meeting Minutes and mixed United States figures.

On Thursday, the US Q4 GDP report showed that the annualized pace of growth in the country was downwardly revised to 2.7% from 2.9% in the last quarter of 2022. Meanwhile, the Personal Consumption Expenditure Prices rose by 3.7% QoQ, which indicated that inflationary pressures in the same period were higher than previously estimated.

The economic data further fueled speculation the US Federal Reserve will continue to hike rates in the upcoming meetings. Market players are now waiting for the US January Personal Consumption Expenditures Price Index, which is the Fed’s preferred price gauge, is expected to show acceleration.

The benchmarks, S&P 500 and Dow Jones Industrial Average both advanced higher on Thursday as the S&P 500 came back up after erasing a rally of almost 1% with a series of twists and turns on Wall Street. The S&P 500 was up 0.5% daily and the Dow Jones Industrial Average meanwhile climbed higher with a 0.3% gain for the day. Seven out of eleven sectors in the S&P 500 stayed in positive territory as the Information Technology sector and the Energy sector are the best performing among all groups, rising 1.63% and 1.27%, respectively. The Nasdaq 100 meanwhile rose the most with a 0.9% gain on Thursday and the MSCI World index was up 0.3% for the day.

Main Pairs Movement

The US dollar edged higher on Thursday, preserving its upside strength but then retreated slightly back from a daily high above 104.70 level during the US trading session amid hawkish Fed bets. The Fed is expected to continue its policy tightening to achieve price stability as the upbeat labor market in the United States could underpin the Consumer Price Index (CPI) sooner. The USD Index is likely to remain volatile ahead of the release of the United States Core Personal Consumption Expenditure (PCE) Price Index data.

GBP/USD dropped lower on Thursday with a 0.27% loss after the cable extended its intraday slide and touched a daily low below the 1.2000 mark in the late US session ahead of US PCE Inflation. On the UK front, the BoE policymaker is worried about the extended persistence of inflation and sees the need for more tightening. Meanwhile, EUR/USD also witnessed some selling interest and touched a daily low around the 1.0580 mark. The pair was down almost 0.10% for the day.

Gold suffered from daily losses with a 0.17% loss for the day after witnessing further downside move and printed a fresh seven-week low below the $1820 level during the US trading session, as the US data fueled market concerns and weighed on the yellow metal. Meanwhile, WTI Oil rebounded sharply with a 1.95% gain for the day.

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
EURGerman GDP (QoQ) (Q4)15:00-0.20%
USDCore PCE Price Index (MoM) (Jan)21:300.40%
USDNew Home Sales (Jan)23:00620K
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