Daily Market Report - Thursday, Feb 2, 2023


Markets taking a deep breath Thursday morning and waiting for the next round of the central bank’s policy meetings. Today, Investors and traders will closely monitor the release of the European Central Bank and Bank of England monetary policy decisions, where markets are expecting the central banks are widely expected to raise interest rates by 50 basis points.

During the previous session, the Federal Reserve raised interest rates by 50 basis points, in line with forecasts. The move takes the benchmark rate to 4.75%, as the Fed continues to battle high inflation. "Over the past year we have taken forceful actions to tighten the stance of monetary policy," Fed Chair Jerome Powell said.


Asian shares advanced on Thursday after the U.S. Federal Reserve signaled that this tightening cycle may be nearing its end is growing. US stock futures slightly reversed from the weekly highs on Thursday morning, shifting investor focus to earnings from big technology companies, including Apple, Amazon and Alphabet, later in the day.


Crude oil futures still struggling to find strong upside momentum despite a weaker US dollar after the OPEC+ committee recommended keeping crude production steady. On the other hand, the EIA crude inventory data showed the US crude inventories jumped by 4.14 million barrels last week, much more than market expectations of a 0.376-million-barrel rise.


In the currency market, the euro and British pound pause the rally ahead of the central bank’s decision. Meanwhile, commodity-linked currency pairs like the Australian dollar, New Zealand and Canadian dollar extend gains on Thursday after the price of gold has broken out to a fresh monthly high.


The precious metal hit a fresh 10-month high on Thursday morning driven by FOMC Chairman Jerome Powell's dovish remarks. On Wednesday, Federal Reserve Chair Powell said during a press conference that the disinflationary process has begun.

Economic Outlook

On the data front, the US released a disappointing ADP employment report and ISM manufacturing data on Wednesday. ADP national employment report showed that the US added 106,000 private-sector jobs in January, down from December’s gain of 253,000 jobs. The ISM Manufacturing PMI fell to 47.4 in January, below market forecasts of 48.

Moving ahead today, the important events to watch:

UK – BOE interest rate decision and statement: GMT – 12.00

Eurozone – ECB interest rate decision and statement: GMT – 13.15

US – Jobless claims: GMT – 13:30

Coronavirus update:

Worldwide, more than 675 million people have been confirmed infected and more than 6.76 million have died. The United States has confirmed over 104 million cases and has had more than 1.13 million deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

For today, If the bullish momentum continues then the next upside level is to watch at 1.1060 and 1.1090. On the other hand, the next immediate support prevails at 1.0930, a further breakout of 1.0930 can lead the pair towards 1.0880/70 levels.

The important levels to watch for today: Support- 1.0980 and 1.0930 Resistance- 1.1030 and 1.1065.

GOLD: The precious metal trades steady above 1950. If the bullish momentum continues, then the next upside level is to watch 1965 and 1972. On the downside, any meaningful pullback now seems to find some support near the 1950 zones, below which the slide could further get extended towards the 1942/35 regions.

The important levels to watch for today: Support- 1950 and 1945 Resistance- 1960 and 1968.

Quote of the day - “The vast majority of people compete in a time horizon that’s very near dated. There are many fewer investors who are thinking out a decade and beyond.” Matthew McLennon.
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