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ECB sends euro flying, FB stock crashes

“However difficult life may seem, there is always something you can do and succeed at.” – Stephen Hawking

 

 

 

HEADLINES

 

 

 

  • Euro rises to three-week high vs dollar after ECB's Lagarde turns hawkish
  • BoE hikes rates to fight inflation, but not by enough for 4 officials
  • U.S. oil busts through $90/bbl for first time since 2014
  • Gold steadies as weaker dollar, stocks offset stronger yields
  • Wall St ends winning run as Facebook forecast halts tech-led recovery
  • Meta's share price wipe-out shakes world tech stocks
  • NFP: Downside risk to the -200K estimate – TD Securities

 

 

 

FOREX

 

 

 

Euro rises to three-week high vs dollar after ECB's Lagarde turns hawkish

 

 

The euro surged to a three-week high against the U.S. dollar on Thursday after comments from European Central Bank President Christine Lagarde fuelled expectations of faster policy tightening, as she focused on the prospect of eurozone inflation overshooting.

She also did not repeat previous comments that interest rates in the region were not likely to rise this year. The single European currency rose as high as $1.1452 , the highest since Jan. 14, and was last up 1.2% at $1.1441. The euro was on track for its largest daily percentage gain since early December 2020.

 

 

BoE hikes rates to fight inflation, but not by enough for 4 officials

 

 

The Bank of England raised interest rates to 0.5% on Thursday and nearly half its policymakers wanted a bigger increase to contain rampant price pressures, which the British central bank warned would push inflation above 7%.

In a surprise split decision, four of the nine Monetary Policy Committee members wanted to raise rates to 0.75% in what would have been the biggest increase in borrowing costs since the BoE became operationally independent 25 years ago.

 

 

 

COMMODITIES

 

 

 

U.S. oil busts through $90/bbl for first time since 2014

 

 

Oil prices surged in late-day trading Thursday, sending the U.S. crude benchmark through $90 a barrel for the first time since 2014 due to ongoing supply worries and as frigid weather cascades across the United States.

West Texas Intermediate crude soared $2.01, or 2.3%, higher to end at $90.27 a barrel, the first time the U.S. benchmark has closed above the $90-level since Oct.6, 2014.

 

 

Gold steadies as weaker dollar, stocks offset stronger yields

 

 

Gold prices steadied on Thursday, as a weaker dollar and risk-off sentiment in the equity markets helped counteract pressure from a jump in U.S. Treasury yields. It had earlier fallen 1% to a session low of $1,787.70 due to a spike in U.S. Treasury yields on rising U.S. rate hike bets.

 

 

 

STOCKS

 

 

 

Wall St ends winning run as Facebook forecast halts tech-led recovery

 

 

Wall Street snapped a four-session winning streak on Thursday, with all three benchmarks ending lower after Facebook-owner Meta Platforms' dour forecast sent its stock plummeting and halted a nascent recovery built on upbeat earnings from other big tech.

 

 

Meta's share price wipe-out shakes world tech stocks

 

 

Shares of Facebook owner Meta plummeted 26% on Thursday in what could be the worst single-day wipeout in market value for a U.S. company, after the social media giant issued a dismal forecast, blaming Apple Inc's privacy changes and increased competition.

The huge drop, erasing over $200 billion from Meta's market capitalization and $29 billion from Chief Executive Officer Mark Zuckerberg's net worth, spilled over to the broader technology sector and dragged the Nasdaq Composite Index lower.

 

 

 

ANALYSIS

 

 

 

NFP: Downside risk to the -200K estimate – TD Securities

 

 

“Payrolls likely plunged in January, but only because of temporary Omicron fallout; if anything, we see downside risk to our -200k estimate. Several Fed officials have already made clear that they will discount weak data as temporary.

“A weaker-than-expected NFP report would reinforce the recent USD selloff. It works through two channels: rates and risk. Risk sentiment would likely welcome easier financial conditions, especially if Omicron explains the growth weakness. That said, our dashboard shows the USD reaching oversold levels again so we use this recent pullback as a buying opportunity ahead of next month's Fed meeting.”

 

 

 

CHART

 

 

 

Euro / Swiss franc – Daily Candlesticks

Source: GKFX Prime Metatrader 4

EUR/CHF has completed a double bottom pattern at 1.03 with a move over 1.05. The measured move from the pattern implies a test of 1.07. - Prepared by Trading Writers*

 

 

 

CALENDAR

 

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE:

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/nfp-downside-risk-to-the-200k-estimate-td-securities-202202031656
https://www.reuters.com/business/bank-england-hikes-rates-clamour-contain-inflation-2022-02-03/
https://www.reuters.com/business/nasdaq-futures-sink-2-after-facebooks-dour-forecast-2022-02-03/
https://www.reuters.com/business/energy/oil-prices-take-breather-opec-sticks-output-plans-2022-02-03/
https://www.reuters.com/markets/europe/gold-holds-above-1800-weaker-yields-job-data-disappoints-2022-02-03/
https://www.reuters.com/markets/europe/dollar-takes-break-this-weeks-slide-ahead-boe-ecb-meetings-2022-02-03/