With the US stock market closed on Monday, there was not much volume or volatility on the markets. STOXX 600 closed 0.5% in the green at 454.6, which is its highest level since April 2022. EU stocks continued to act on a rally that was fuelled by hopes of a rebound in China’s economy and an ease in price pressures in the US and Europe.
Since the beginning of the year, the STOXX 600 index has gone up by 6.6%. Warmer weather has added to hopes that the energy crisis in Europe caused by the war between Russia and Ukraine will start to get better.
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The blue-chip FTSE 100 index in Britain went up 0.2% to 7,860.1, getting closer to its all-time high of 7,903.50. The DAX in Germany went up 0.3%, the CAC 40 in France went up 0.3%. At the end of the day, all three were close to a one-year high.
The Euro scores, focus shifts to BoJ
The dollar had a bad start to the week. The yen was in the spotlight because traders think the Bank of Japan will change its yield control policy even more.
In early trading, the euro hit a new nine-month high of $1.0874 before falling back to $1.0816, which is 0.16% lower. Meanwhile, the Australian dollar broke through the important $0.7000 level for the first time since August before falling back to $0.6962.
The dollar index, which measures the value of the dollar against a group of other currencies, fell to its lowest level in seven months, 101.77. This continued a drop that began last week when data showed that US consumer prices fell in December for the first time in more than two and a half years. Finally though, it closed at 102.3 with a 0.1% gain.
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Investors are getting more and more confident that the Fed is nearing the end of its rate-hike cycle and that rates won’t go as high as they were worried they would. This is because inflation in the world’s largest economy has been high for more than two years, but is starting to slow down.
The Fed’s aggressive rate hikes were a big reason why the dollar index went up by 8% last year. When it became clear that inflation had reached its peak, the dollar index went back down.
A mildly green day for the commodities
Oil dropped at the start of the week, when trading was slow because US markets were closed for the Martin Luther King, Jr. holiday. West Texas Intermediate is trading around $79, which is down 1.25%. The UK crude benchmark Brent held the price in the green, with 0.11% gain at $84.15
Gold price drops from a high point that hasn’t been seen in almost nine months, which was around $1,929 on Monday. In the last hour, the XAU/USD fell to a new daily low of around $1,910, but any further drop could be seen as a chance to buy given the strong uptrend.
Silver futures for March 23rd delivery closed just a hair in the green at $24.442 with a tiny 0.01% increase. Natural gas futures enjoyed a 1.1% gain.
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