Photo - Andreas Zanin
Andreas Zanin
Analysis, Market Analysis | January 25, 2024

JASPER’S MARKET SQUAWK 25-01-2024

EURUSD steady around 1.09 before ECB Meeting

Market Movers

  • The US dollar remains steady near six-week highs
  • The Euro is showing softness before the ECB Meeting
  • S&P 500 achieves another record high, led by Netflix and chipmakers.
  • Netflix shares surge 11% on strong subscriber growth.
  • Chinese CSI300 Index rebounds following a cut in bank reserve requirements.
  • UK equities reach one-week high, boosted by China’s economic measures.

What’s Happening

Euro in the Spotlight

The Euro has been softer in anticipation of the European Central Bank’s policy meeting, where rates are expected to remain unchanged but with a keen focus on future guidance. The US dollar has been trading steadily, maintaining near six-week highs. This stability comes as investors await US GDP data and other key indicators to gauge the direction of US interest rates.

Netflix Drives US Market Gains

Netflix’s stock has experienced an impressive surge, jumping 11% following a report of substantial subscriber growth. This boost in investor confidence has been attributed to the company’s successful strategies in content and operations, notably its crackdown on password sharing. Netflix’s performance significantly contributed to the S&P 500’s rise to another record high.

Record Highs for S&P 500

The S&P 500 Index continued its upward trajectory, achieving another record high. This growth was propelled by strong performances from key sectors, including technology and semiconductors, with notable contributions from Netflix and various chipmakers. The index’s rise reflects broader optimism in the market, buoyed by positive earnings reports and expectations of resilient US economic activity.

Chinese Stock Market Gains Traction

The CSI300 Index in China witnessed a significant rebound, gaining over 1% and reducing its yearly losses to around 3%. This upswing was primarily driven by the Chinese central bank’s decision to cut bank reserve requirements, injecting substantial liquidity into the economy.

Uplift in British Equities

The FTSE 100 and FTSE 250 indices in the UK marked noticeable gains, reaching a one-week high. This positive movement was largely influenced by China’s decision to cut bank reserves, which raised hopes for increased demand, particularly benefiting China-exposed stocks like miners and luxury retailers.

Econ Calendar

  • The European Central Bank policy meeting is scheduled, with focus on President Christine Lagarde’s comments.
  • US GDP data release is expected, providing insights into the economy’s resilience amid interest rate hikes.
  • The German IFO survey will offer a snapshot of the business climate in Europe’s largest economy.
  • Corporate earnings reports are due from major companies including Nokia, LVMH, Intel, Visa, T-Mobile, and American Airlines.
  • Personal consumption expenditure (PCE) data, the Fed’s preferred inflation gauge, is set to be released.

Chart of the Day

Following this analysis, I try a long pullback after the next break of the 75.07 level. Very wide stop, but low size and ambitious target (around 4 to 1 as RR). We’ll see if it goes and how to manage it tomorrow or possibly in the next few days. The second graph with the “squashed” scale is just to highlight the TP.

Source: Matteo Marchetti, KTM Market Analyst

For all the latest market developments follow Matteo @MMTradingKTM and Key to Markets @keytomarkets on Telegram

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