After witnessing a few days of cautious optimism, mainly driven by China, traders turned pessimistic on early Friday. The reason could be linked to the Treasury bond yields which suggest the rush towards risk-safety amid economic slowdown concerns. Adding strength to the risk aversion is the downbeat prints of China's inflation numbers and an absence of optimism among the global central bankers.
Even so, the better-than-previous UK GDP and downbeat US data join the softer tone of the Fed talks to tame the risk-off mood.
The US Dollar fails to cheer the mildly sour sentiment, which in turn favored prices of Gold and Crude even as equities struggle. That said, USDJPY is the biggest gainer of the day as the search for the next BoJ leader heats while GBPUSD appears picking up bids after UK GDP data but is far from crossing the woods.
Elsewhere, BTCUSD and ETHUSD rebound from monthly lows, consolidating the biggest daily losses since late 2022, amid mining difficulties.
Following are the latest moves of the key assets:
Be it the lack of optimism among the central bankers or the recently softer data from global economies, ex-Britain, traders have more reasons to trim the previous optimism surrounding the economic transition from the Covid-led economic hardship and tighter monetary policies.
Even so, the downbeat comments from Federal Reserve officials join softer US data to weigh on the US Dollar and allow traders to seek benefits from the same.
That said, Japan’s rush for a new leader and fears of a hawk’s entry seems to join the broad US Dollar weakness to weigh on the USDJPY. Further, GBPUSD remains mildly bid as UK Q4 GDP matches forecasts while production details came in impressive.
Gold and Brent oil extend the latest rebound even as equities in the US and Asia-Pacific zone remain depressed. Further, China’s inflation woes test optimism surrounding AUDUSD and NZDUSD.
On a different page, fears of more regulations and bankruptcies by the industry leaders seem to probe the cryptocurrencies even as they bounce off monthly lows amid talks of less supply.
Amid the jittery markets, early signals for the next week’s US inflation data will be crucial for immediate directions. That said, the first readings of the UoM Consumer Confidence for February and inflation expectations will be the key. Also important will be Canada’s monthly employment data, even as BoC Governor Tiff Macklem has already signaled a pause in the rate hike trajectory.
May the trading luck be with you!