Wall Street wobbled amid hotter-than-expected US inflation data, with both Dow and S&P 500 finishing lower, while the Nasdaq notched higher for the week. Notably, both UK and EU markets outperformed, with the FTSE 100 hitting a record high amid cooled inflation data and strong energy stocks’ performance.
The APAC region, however, underperformed, due to uncertainties about China’s economic recovery. And both Australian and New Zealand markets finished the week lower after earnings season, with a mixed bag of company results.
This week, the FOMC meeting minutes will be a key focus for investors, to find clues about Federal Reserve’s rate-hike path. And another major central bank, the RBNZ, will hold its first policy meeting in 2023, providing guidance to the local economy.
What are we watching?
- US bond yields rise: Bond yields rose for the third straight week, suggesting that the Fed is most likely to keep hiking rates for longer and pushing the US dollar higher.
- Energy prices decline: Both oil and gas prices fell as US crude inventory rise for an eighth straight week, suggesting demand stays weak, while China’s reopening optimism faded. Natural gas prices fell to the lowest since November 2020 also due to lacklustre demand, while rampant inflation and central banks’ guidance for more rate hikes sparked economic concerns.
- Cryptocurrencies jump: Both bitcoin and ethereum rose to their highest level since August 2022 due to a short squeeze. The crypto exchanges, including Coinbase and Microstrategy, also jumped 17% and 20% respectively for the week, along with the digital markets’ advances.
Economic calendar (20-24 February)
All times are in AU AEST.
Find your flow: four principles for trading in the zone
Learn about the four trading principles of preparation, psychology, strategy, and intuition, and gain key trading insights from some of the world's top investors.Get this free report
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.