Gold Looks Appetizing On Weaker Dollar, Soft Economic Data From The US Revives The Fed Doves
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The latest PPI data showed that the producer price inflation in the US fell way faster than expected, while retail sales fell 1.1% in December – marking the biggest monthly drop of last year.
S&P500
The S&P500 didn’t like the mix of slowing economic data, and hawkish comments from Fed officials, and dived more than 1.50% yesterday.
But the dovish expectations – despite the hawkish comments from the Fed, feed well into the bond markets: the US 2-year yield is diving toward the 4% mark, while the 10-year yield hit 3.30%, the lowest level since September.
This means that the positive divergence in the sovereign space, compared with the stocks, is happening.
Netflix and P&G
And the divergence could be even more visible if the stocks fall further on soft earnings. Netflix and P&G will announce their Q4 results today.
Energy
In energy, US crude advanced past the $82 mark on Chinese reopening optimism and IEA predicting that the oil demand will hit a record in 2023, before falling back below the $80 on recession pessimism.
Precious metals
In precious metals, gold is bid above the $1900 level, supported by lower US yields and the softer US dollar.
Watch the full episode to find out more!
- 0:00 Intro
- 0:42 Soft economic data from the US revives the Fed doves
- 2:09 But the Fed doves aren’t enough for cheering up the stock bulls
- 3:36 Netflix & P&G to reveal Q4 earnings today
- 6:00 USD is unloved
- 8:20 Crude oil swings up and down
- 9:05 Gold looks appetizing on softer yields & weaker dollar
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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