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Gold pops, Nasdaq enters correction

Most people give up just when they are about to achieve success. They quit on one yard line. They give up the at last minute of the game one foot from a winning touch down. – Henry Ross Perot

 

 

 

HEADLINES

 

 

 

  • U.S. dollar weakens, but keeps positive outlook; sterling rises after UK data
  • Gold jumps 1% on subdued dollar, palladium bounces 7%
  • Oil up, settles near 7-yr highs after Iraq-Turkey pipeline outage
  • Wall Street sell-off deepens, Nasdaq confirms correction
  • EUR/JPY set to hit the 140.00 level in 2023 – ING

 

 

FOREX

 

 

 

U.S. dollar weakens, but keeps positive outlook; sterling rises after UK data

 

 

The dollar slid on Wednesday, with U.S. Treasury yields retreating as well after hitting roughly two-year peaks on 2-year and 10-year notes, but the greenback remains well-supported as investors prepared for a widely expected interest rate increase in March.

U.S. 10-year Treasury yields touched a new two-year high of 1.902% on Wednesday.

Sterling, meanwhile, rose after data showed British inflation rose 5.4% in December, its highest level in 30 years, raising rate hike expectations. Talks of a leadership challenge to Prime Minister Boris Johnson, however, have kept the pound in check.

 

 

 

COMMODITIES

 

 

 

Gold jumps 1% on subdued dollar, palladium bounces 7%

 

 

Gold rose more than 1% on Wednesday as a retreat in the dollar and geopolitical tensions surrounding Ukraine burnished safe-haven bullion's appeal, sparking a rally in precious metals.

Palladium led the gains with a rise of as much as 7%, with Citi Research saying in a note a gradual recovery in global automotive output could underpin demand for the auto-catalyst metal this year. It was last up 5.7% at $2,006.20 per ounce.

 

 

Oil up, settles near 7-yr highs after Iraq-Turkey pipeline outage

 

 

Oil prices settled higher on Wednesday after a fire on a pipeline from Iraq to Turkey briefly stopped flows, increasing concerns about an already tight short term supply outlook.

Flows have resumed through the Kirkuk-Ceyhan pipeline that carries crude from northern Iraq, the second-largest producer in the Organisation of the Petroleum Exporting Countries, to the Turkish port of Ceyhan for export.

 

 

 

STOCKS

 

 

 

Wall Street sell-off deepens, Nasdaq confirms correction

 

 

Wall Street's main indexes ended sharply lower on Wednesday, with the tech-heavy Nasdaq confirming it was in a correction, after a diverse set of corporate earnings and as investors continued to worry about higher U.S. Treasury yields and the Federal Reserve tightening monetary policy.

The Nasdaq ended down 10.7% from its Nov. 19 closing record high, as stocks sold off into the market close. A correction is confirmed when an index closes 10% or more below its record closing level.

 

 

 

ANALYSIS

 

 

 

EUR/JPY set to hit the 140.00 level in 2023 – ING

 

 

“EUR/JPY only seems to hit the headlines when equities start to sell off sharply and the JPY briefly outperforms. What of equity markets? Yes, higher US bond yields may favour value over growth stocks, but we favour 2022 being another year of (more modest) equity gains.”

“EUR/JPY could have a slight wobble around European politics in Italy (late January) or France (late April).”

“By year-end, EUR/JPY should be back on the up as the ECB prepares for a March-23 rate hike. EUR/JPY can hit 140 in 2023.”

 

 

 

CHART

 

 

 

Gold – Daily Candlesticks

Source: GKFX Prime Metatrader 4

XAU/USD has broken out above range resistance at 1830 for the second time since July. in November, the downtrend line offered resistance but on what would be its 5th test, is less likely to do so this time. - Prepared by Trading Writers*

 

 

 

CALENDAR

 

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCES

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/eur-jpy-set-to-hit-the-14000-level-in-2023-ing-202201190955
https://www.reuters.com/business/futures-gain-unitedhealth-bofa-rise-results-2022-01-19/
https://www.reuters.com/markets/europe/leaping-yields-buttress-dollar-ahead-fed-meeting-2022-01-19/
https://www.reuters.com/markets/europe/gold-flat-near-one-week-low-us-rate-hike-looms-2022-01-19/
https://www.reuters.com/business/energy/oil-rises-7-year-high-turkey-outage-adds-tight-supply-outlook-2022-01-19/