The resumption of negotiations between the US and Iran may lead to lower oil prices

The US stock indices closed on the plus side on Tuesday. By the close of the stock market Dow Jones (US30) gained 1.06%, S&P500 (US500) added 0.84%, technology index NASDAQ (US100) jumped by 1.28%.

The US 10-year bond yields jumped to 1.97% yesterday, the highest level since August 2019, amid continued bets that the Federal Reserve will be aggressive on monetary policy to curb inflation. Banking stocks are growing amid rising yields.

The US trade deficit widened to $80.7 billion in December from a revised $79.3 billion in November. Experts had expected the deficit to rise to $83 billion.

This week's main event will be the report on consumer price in the United States in January, which will be published on Thursday. Analysts predict that US inflation will accelerate to 7.3% in annual terms. If the actual data match the forecast, it will be difficult to determine whether the Fed can draw the line between raising rates and tightening policy in a way that lowers inflation without hurting the economic recovery.

Novavax shares fell by 12% after Reuters reported that the company delivered only a small number of the 2 billion COVID-19 vaccines planned for this year, prompting some countries to reconsider their planned vaccine use. Yesterday, shares of Pfizer fell after fourth-quarter report data matched Wall Street estimates.

European stock markets traded without a single trend yesterday. Germany's DAX (DE30) gained 0.24%, France's CAC 40 (FR40) added 0.27%, Spain's IBEX 35 (ES35) jumped by 1.36%, but the British FTSE 100 (UK100) decreased by 0.08%.

Shares of France's largest bank by assets BNP Paribas rose 0.5%, although its quarterly profit was worse than the market forecasts. The value of French insurance company AXA shares increased by 2.2% after Morgan Stanley analysts upgraded their recommendation to "above market." British oil company BP boosted its key earnings last quarter thanks to higher oil and gas prices. The annual profit was the highest in the last eight years. But at the same time, after the report's publication, BP shares fell by 2.4%.

Sweden has lifted all restrictions imposed due to the coronavirus.

Yesterday, oil prices dropped slightly as investors feared that renewed talks between the United States and Iran could revive the international nuclear agreement and increase oil exports from the OPEC producing country. At the same time, the US Department of Energy raised its 2022 Brent price forecast from $74.95 to $82.87 a barrel. Data on US crude oil inventories are expected today. Rising inventories may push down the price of "black gold" even more.

The price of gold and silver is rising despite the growth of the dollar index and government bonds yields, which are inversely correlated with precious metals. Now the situation with gold is very ambiguous because, on the one hand, gold quotes are growing, as it is a hedge against inflation, but on the other hand, a raise of the Fed's interest rates will put pressure on prices.

Asian stock markets are rising steadily in today's trading, following yesterday's rise in the US stock market. Japan's Nikkei 225 (JP225) gained 1.08%, Australia's S&P/ASX 200 (AU200) added 1.14%, and Hong Kong's Hang Seng (HK50) jumped by 1.84%. According to preliminary information, Chinese state funds started buying Chinese stocks to stop the drop of prices in the stock markets, which has been observed in recent months.

Main market quotes:

S&P 500 (F) (US500) 4,521.54 +37.67 (+0.84%)

Dow Jones (US30) 35,462.78 +371.65 (+1.06%)

DAX (DE40) 15,242.38 +35.74 (+0.24%)

FTSE 100 (UK100) 7,567.07 -6.40 (-0.085%)

USD Index 95.60 +0.20 (+0.21%)

Important events for today:
  • – New Zealand Inflation Expectations (m/m) at 04:00 (GMT+2);
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
  • – US FOMC Member Bowman’s Speech at 17:30 (GMT+2);
  • – US FOMC Member Mester’s Speech at 19:00 (GMT+2);
  • – Canada BoC Gov Macklem’s Speech at 19:00 (GMT+2).

by Justforex, 2022.02.09

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Open Account

Get Free Analytics

* required fields