• Broader indices plow forward. Record close for S&P and first close above 5000.
• Crude oil settles at $76.84,
• Fed’s Logan: Labor market is very tight but loosening
• Fed’s Bostic: Inflation has been too high for too long
• European equity close: A double doji on the weekly
• More on the US CPI revisions
• Kickstart your FX trading with a detailed technical look at the EURUSD, USDJPY & GBPUSD.
• US Treasury yields fall on CPI revisions, then rebound
• US benchmark CPI revisions: December CPI revised to +0.2% from +0.3%
• Canada January employment 37.3K versus 15.0K estimate
• The NZD is the strongest and the CHF is the weakest as the NA session begins
• ECB Publishes Paper on Forward-looking Trackers of Negotiated Wages
• Next Week’s Key Economic Events

The USD is ending the session lower to end the trading week with most of the declines coming vs the AUD and the NZD. Overnight, ANZ reported that is now predicts that the Reserve Bank of New Zealand (RBNZ) will increase the Official Cash Rate (OCR) by 25 basis points in both February and April, bringing it to a total of 6%, which deviates from the consensus view. This forecast is based on a series of small, but unwelcome surprises in economic data, leading ANZ to believe that the RBNZ will not feel confident that it has sufficiently met its inflation targets. The OCR is currently at 5.5%, and while the market is largely expecting the RBNZ to maintain rates in the upcoming February meeting, with a 90% anticipation of a hold decision, ANZ stands out by anticipating rate hikes in both the February 28 and April 10 meetings.

That news helped to propel the NZDUSD to a near 1% gain on the day. The AUDUSD moved up 0.54%. The USD was mixed vs the other currencies in a subdued up and down trading session in the US. Overall, for the day, the NZD was the strongest of the major currencies while the CHF was the weakest.

In the session today, the Canada employment data showed a gain of 37.6K but all the gain was in part time jobs. Full time jobs fell by -11.6K. The unemployment rate did fall to 5.7% from 5.8% last month. The USDCAD ended the day little changed in up and down trading.

There were no US economic data today. However, there was some additional Fed talk from Fed’s Logan and Bostic.

Fed’s Logan emphasized that the labor market remains very tight, although there are signs of loosening, signaling a nuanced view of current economic conditions. She acknowledged significant progress made on inflation but noted that further efforts are necessary to fully address it. Logan advocated for a careful and data-driven approach, suggesting there is no immediate urgency to adjust interest rates at this time. Her comments reflect a priority on building confidence in the long-term stability of inflation rates. While she noted that supply chains have largely normalized, Logan also acknowledged ongoing supply chain issues in certain industries, indicating these may need more time to resolve fully. She expressed a strong focus on monitoring potential risks that could undermine progress on inflation, highlighting the Fed’s vigilance in maintaining economic stability.

Fed’s Bostic, in a discussion with NPR, expressed concern that inflation has been excessively high for an extended period. He conveyed optimism about the United States being on track to regain its pre-pandemic economic vitality, emphasizing the importance of preventing a new surge in inflation. Bostic highlighted that current data indicate the potential for continued real wage gains over the next several months. He pointed out that businesses are primarily challenged by difficulties in finding employees and affordable housing. Furthermore, Bostic reassured that banks are aware of the risks present in their portfolios and are equipped to manage them effectively, suggesting a level of preparedness within the banking sector to navigate potential economic fluctuations.

For the trading week, the US dollar index rose 0.10% (DXY) but was mixed vs the major currencies. Looking at the major currencies, the USD was virtually unchanged vs the EUR and GBP, it was the strongest vs the CHF and the weakest vs the NZD:

• EUR, unchanged
• JPY, +0.65%
• GBP, unchanged
• CHF, +0.90%
• CAD, -0.02%
• AUD, -0.20%
• NZD, -1.49%

Today, yields were mixed with the shorter end higher, and the longer end lower.

• 2-year 4.484%, +2.8 basis points
• 5-year, 4.140%, +1.6 basis points
• 10-year, 4.177%, +0.7 basis points
• 30 year, 4.374%, -0.6 basis points

For the trading week, yields moved higher as the market started to dial back the number of tightening.

• 2 year, +11.4 basis points
• 5 year, +15.4 basis points
• 10 year, +15.3 basis points
• 30 year, +15.1 basis points

US stocks today continued it move to the upside with solid gains for the broader indices. The S&P index closed above the 5000 level for the first time ever. The Nasdaq index traded above 16K for the first time since November 2021. The S&P closed at a record level and although the Dow as lower today, it traded to record levels this week.

The final numbers are showing:

• Dow industrial average fell -54.64 points or -0.14% at 38671.70
• S&P rose 28.70 points or 0.57% at 5026.62
• Nasdaq rose 196.94 points or 1.25% at 15990.65

For the week, the major indices closed higher for the 5th week in a row after starting 2024 with a sharp decline in the 1st trading week of the year.

• Dow industrial average, rose 0.04%
• S&P rose 1.37%
• Nasdaq rose 2.31%

In other markets this week,

• Crude oil rose $4.26 or 5.89% to $76.54
• Gold fell -$15.02 or -0.74% to $2024.42
• Silver fell $0.08 or -0.34%
• Bitcoin surged by $4975 or 11.6% as risk on flows pushed the digital currency higher.

Next week US CPI will highlight the economic releases

Monday:

• BOE Gov. Bailey speaks

Tuesday:

• NZ inflation expectations
• UK Employment
• US CPI

Wednesday:

• UK CPI
• UK Gov. Bailey speaks

Thursday:

• AUD employment
• UK GDP
• US Retail Sales
• US unemployment claims

Friday:

• UK Retail sales
• US PPI
• US Michigan Consumer Sentiment.

On the earnings calendar next week, Shopify, Coca Cola, AIG, Cisco and Coinbase are companies of interest. The Big Daddy of perhaps the entire earnings season will be released on February 21, when Nvidia is scheduled to report. The fate of AI and Ai stocks rests with the chip supplier:

Tuesday:

• Shopify
• Coca Cola
• Marriott
• Lyft
• AIG

Wednesday:

• Kraft Heinz
• Albemarle
• Twillio
• Cisco

Thursday:

• John Deere
• Coinbase

Thank you for your support. Wishing you all a great weekend.

This article was written by Greg Michalowski at www.forexlive.com.

The broader US stock indices continued to plow forward with the S&P closing above 5K for the first time ever. The Nasdaq traded above 16K for the first time since November 2021 and is now within 67 points of a new all time high close.

The Dow did fall today but as Chevron, Disney and Caterpillar move lower.

The final numbers are showing:

• Dow industrial average fell -54.66 points or -0.14% at 38671.70
• S&P index rose 28.70 points or 0.57% at 5026.62
• NASDAQ index rose 196.94 points or 1.25% at 15990.65. It’s intraday high reached up to 16007.29. The all-time high closing level was at 16057.44.

The small-cap Russell 2000 rose 30.29 points or 1.53% to 2009.99.

For the trading week, each of the major indices rose for the fifth consecutive week:

• Dow Industrial Average eeked out a 0.04% gain for the week
• S&P index rose 1.37%
• NASDAQ index rose 2.31%

The small-cap Russell 2000 rose 2.4079%.

For 2024:

• Dow Industrial Average 2.61%
• S&P index is up 5.38%
• NASDAQ index is up 6.52%

The Russell 2000 is down -0.842%.

Happy days are here again….

This article was written by Greg Michalowski at www.forexlive.com.

The price of oil is settling at $76.84. That is up $0.62 or 0.81% on the day. The high price reached $77.29. The low price was at $75.93.

For the trading week, the prices soared 6.27% which comes after a -7.35% decline last week, and a 6.5% rise the week before. So price action has been up-and-down over the last few trading weeks.

Looking at the weekly chart, the price low dipped below its 200-week moving average at $72.04. Looking at the chart below, the last 10 trading weeks has been skimming along that 200-week moving average with six of the 10 weeks moving below the moving average intra-week. However, there have been no closes below that moving average – keeping the buyers in play technically.

This article was written by Greg Michalowski at www.forexlive.com.

• We have made tremendous progress on inflation, more work to do
• Need to take time to look at data
• Don’t see any urgency to adjust rates
• Need to build confidence on inflation
• Supply chains have pretty much normalized
• Some industries still have supply chain issues, may take time to heal
• Highly focused on possible risks to progress on inflation
• Some industries still have supply chain issues, may take some time to heal

This is right out of the Fed textbook right now. Everyone wants more time to see more data.

This article was written by Adam Button at www.forexlive.com.

• The US is on a pathway to get back to pre-pandemic economic strength, wants to avoid a new spike of inflation
• Data suggest real wage gains will continue for several more months
• Businesses say biggest challenges are finding employees and affordable housing
• Banks understand the risk on their books and are prepared to deal with them

This article was written by Adam Button at www.forexlive.com.