North American News
Equity close: Strong gains midday fizzle
- Still gains but not as big as earlier
Closing changes in the US and Canada:
- S&P 500 up 14, or 0.35%, to 3989 (from a high of 4024)
- Nasdaq +0.6%
- Russell 2000 +0.2%
- DJIA +0.2%
US January durable goods orders -4.5% vs -4.0% expected
- US January durable goods orders
- Prior was +5.6%
- Durables ex transportation +0.7% vs 0.0% expected
- Prior ex transportation -0.1% *(revised to -0.4%)
- Capital goods orders non-defense ex-air +0.8% vs +0.1% expected
- Prior capital goods orders non-defense ex-air -0.2% (revised to -0.3%)
Dallas Fed February manufacturing index -13.5 vs -8.4 prior
- Dallas Fed manufacturing business survey
- Production index in January -2.8 versus 0.2 in January
- New orders index -13.2 vs -4.0 prior — 9th month in a row negative
- Growth rate of orders -16.9 versus -12.3 last month
- Employment -1.0 versus 17.6 last month
- Hours worked +4.9 versus 3.8 last month
- Capital expenditures -1.3 versus +11.6 last month
- Wages and benefits +32.7 versus 30.5 last month
- Prices received +15.8 versus 9.9 last month
- Prices paid for raw materials +25.1 versus 20.5 last month
- Finished goods inventory -3.0 versus -8.9 last month
- Shipments -5.0 versus -6.3 last month
US January pending home sales +8.1% vs +1.0% expected
- US January pending home sales numbers
- Prior was +2.5% (revised to +1.1%)
- Index 82.5 vs 76.9 prior (revised to 76.3)
Fed’s Jefferson rejects arguments for raising the 2% inflation goal
- Comments from Fed Governor Phillip Jefferson
- Recent data suggests wage inflation pressure easing
- Outlook for core services inflation is uncertain
- Important to get back to 2% inflation to allow sustained economic gains
- People do better when there are periods of low and sustained inflation
- Pandemic has had a substantial impact on labor supply
- Right now there is a lot of resolve at the Fed to do what it takes to bring inflation down
- “Under no illusion” that it will be easy to get inflation to 2%, it could take some time
- Currently inflation may be more persistent but we can’t overreact to one data point
- Hard to understand the dynamic processes generating inflation
Commodities
Silver refreshes YTD lows below $20.60
- Silver price prolongs its losses to four consecutive days after slumping below the 200-DMA.
- Silver Price Analysis: A bearish continuation is likely, even though RSI is oversold; caution is warranted.
Silver price dropped to a fresh YTD low of $20.58 a troy ounce but has trimmed some of its losses. Even though the US Dollar (USD) remains soft and the US bond yields are down, the white metal is losing 0.14%. At the time of writing, the XAG/USD exchanges hands at $20.72.
From a daily chart perspective, the XAG/USD is downward biased. Furthermore, the 20-day Exponential Moving Average (EMA) is about to cross below the 200-day EMA, triggering a death cross and exacerbating a fall toward the next demand area, the November 3 daily low of $18.84. A breach of the latter would open the door for further downside, exposing crucial support zones. The critical support areas exposed would be October’s 14 low of $18.09, followed by September’s 28 at 17.97, ahead of last year’s low at $17.56.
Even though the path of least resistance is downwards, the Relative Strength Index (RSI) at oversold conditions could trigger consolidation before the bearish continuation.
As an alternate scenario, the XAG/USD first resistance would be the psychological $21.00 figure. Once reclaimed, bulls could drive prices towards the February 24 high at $21.39, followed by February 23 daily high at 21.67. Next, the 20/200-day EMAs intersection would be tested, around $21.90s.
Gold bulls wait patiently for a buy low opportunity
- US Dollar slides during a risk-on start to the US day on the back of US data bucking the trend.
- Gold price double bottom near the $1,800 psychological level is offering a compelling bullish case.
The Gold price is breaking the structure to the upside which could be paving the way for a buy-low opportunity for patient bulls for the sessions ahead. XAU/USD has come up from the Friday session lows of near $1,806 and has broken $1,814 structure, squeezing shorts with prospects of a prolonged squeeze for the week ahead with the January lows at $1,824 eyed.
Gold price bulls back in control
The Gold price pushed higher on Monday as the US Dollar was sold off in a risk-on environment as US data missed expectations, snapping a series of troublesome inflationary data from the US of late. The US Dollar index, DXY,
dropped to a low of 104.546 on the day after hitting a seven-week peak, making gold less expensive for overseas buyers. The DXY recovered some of the losses later in the morning but remains under pressure, sliding from recovery session highs at 104.83 and moving back into test 104.70 bullish commitments.
Goldman Sachs dials down its bullishness on oil
- Goldman Sachs out with some new oil forecasts
The team at Goldman Sachs has been bullish on commodities and oil but with prices stuck in a range, they’re dialing it back.
They now see brent averaging $90 in Q2 compared to $105 previously with price gradually rising to $100 at year end. They expect oil to stay steady at $100 in 2024 “assuming OPEC boosts output by 1 million bpd” If OPEC doesn’t add oil to the market, they see brent at $107 at year end.
EU News
European equity close: Great start to the week
- Closing changes in Europe
US stocks are giving much of the gains back at the moment, with the S&P 500 now up just 13 points, or 0.3%. Europe managed to close with much stronger gains.
On the day:
- Stoxx 600 +1.1%
- German DAX +1.3%
- Francis CAC +1.6%
- UK’s FTSE 100 +0.7%
- Spain’s Ibex +1.3%
- Italy’s FTSE MIB +1.
ECB’s Vujcic: Markets are right to price in 50 bps at the March meeting
- Comments from Vujicic
- The ECB’s role is not to say where terminal rate should be
- Headline inflation is set to fall
- ECB will soon be in restrictive territory
- We must consider both headline and core inflation
Other News
Finally a finish line for Brexit?
- Northern Ireland protocol deal done?
Chris Mason from BBC reports that a deal on a Brexit Northern Ireland protocol is done.
“An agreement has been reached. The deal is done,” he cited a source saying.
US State Dept: China has ‘very clearly’ taken Russia’s side in the Ukraine war
- Comments from spokesman Ned Price
- China has been anything but an honest broker in the peace effort
- It is now clear that China has decided to take a side in the war in Ukraine
- We don’t believe China has provided lethal assistance yet
Cryptocurrency News
XRP staking to catalyze the next Ripple bull run?
- Ripple launches the first live Staking Trial Program.
- XRP price trades sideways after declining by 3% last week.
- A break above $0.385 is needed to invalidate the bearish case.
XRP price is enticing investors to take a speculative buy as recent innovations could lead to an out-of-nowhere style crypto rally. Still, the technicals do not suggest the move will occur, but this thesis assesses how market behavior could change and create an ideal bullish trade.
XRP price launches first-ever staking program
XRP price has witnessed a boost in market sentiment as the digital remittance blockchain company has launched the first-ever XRP Staking Trial Program. According to Ripple Labs, the first 10,000 loyal investors can receive a 12% to 27% yield by staking their XRP tokens on the program. According to Ripple Labs, the company has over 5.4 billion tokens in reserve, which will be used to guarantee safety and efficiency for investors who participate.
XRP price currently auctions at $0.377. The release of the platform was dually campaigned by top exchanges like Binance and OKEX, which has garnered mass attention to the XRP’s price action. Still, the technicals have yet to respond to the crypto innovation as the price remains sideways after declining by 3% from $0.40 last week.
Traders looking to buy the news and sell the rumor may still want to utilize healthy risk management as an uptick in volatility is likely to ensue. The XRP price is still beneath both the 8-day exponential and 21-day simple moving average (SMA), which suggests the bears are already in control of the short-term trend. The next bearish landing zone for the XRP price lies near the $0.34 level as a retest of the previous resistance. The bearish scenario creates the potential for a 9% decline in market value.
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