Daily Market Report - Wednesday, Feb 1, 2023


The US dollar slides while US stock futures trade mixed on Wednesday morning as markets wait to hear from the US Federal Reserve on its latest interest rate decision. The US central bank is expected to raise the fed funds rate by 25bps today. The FOMC Statement is set to be released at 19.00 GMT. Along with this release will see the FED chair Powell Conference 30 minutes after at 19.30.

During the last week, the US economic data showed that the Fed-preferred core PCE inflation measure in the US slowed to an over-one-year low in December. Therefore, the investors and market participants anticipate a less aggressive policy outlook. However, US FED chair Powell's speech should be more closely scrutinized for language and tone as he signals the FED's direction for the coming months.


Wall Street ended on a positive note last month boosted by better-than-expected US economic data and mixed fourth-quarter earnings results from big US firms. On the earnings front, the Facebook parent Meta Platforms (NASDAQ: META) is scheduled to announce its latest quarterly earnings today after the markets close.


Crude oil prices recovered from the previous session's sell-off, although the upside was limited after the API data showed the US Crude Oil Inventories unexpectedly rise last week. Moving ahead, oil investors should closely monitor the release of weekly US inventory data from the US Energy Information Administration.


In the currency market, New Zealand and the US dollar were the main losers among major currencies in early European trade on Wednesday. The Kiwi became under pressure following the release of a weak New Zealand employment report. The jobs data showed the unemployment rate in New Zealand increased to 3.4% in Q4 of 2022 from 3.3% in Q3, marking the highest reading in five quarters.


The precious metal traded flat on Wednesday morning following the previous session's strong rebound as investors await the Fed's interest rate decision to determine the next direction because as we know gold is highly sensitive to rising interest rates since higher rates dent gold's appeal as they increase the opportunity cost of holding non-yielding bullion.

Economic Outlook

On the data front, UK, Eurozone, and Germany reported better-than-expected manufacturing PMI data on Wednesday. The UK manufacturing PMI was revised slightly higher to 47 in January, from a preliminary estimate of 46.7. Eurozone Manufacturing PMI was confirmed at 48.8 in January 2023, up from 47.8 in the previous month.

Moving ahead today, the important events to watch:

US – ADP employment report: GMT – 13.15

US – ISM manufacturing PMI: GMT – 15.00

Us – FOMC interest rate decision and statement: GMT – 19:00

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

The currency pair rebounded back to above 1.0880 during the European session. For today, the first resistance is located for the pair at around 1.0900, a break above this level will confirm a possible move to 1.0930/50.

The important levels to watch for today: Support- 1.0830 and 1.0800 Resistance- 1.0900 and 1.0950.

GOLD: The precious metal needs a clear break of $1936 to move further upside 1945/48. On the flip side, a breakdown through $1915 would negate that bias and suggest a test of the $1900 support region again.

The important levels to watch for today: Support- 1915 and 1900 Resistance- 1936 and 1948.

Quote of the day - “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections than has been lost in corrections themselves.” ~ Peter Lynch.
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