Walid Koudmani

Cryptocurrencies kick off the new year with a strong performance, with Bitcoin surging by over 5% today, surpassing the $45,000 mark and resulting in a notable week-to-date and year-to-date gain for Bitcoin, reaching almost 9%. While the exact catalyst for this upward movement remains unclear, the overarching narrative in the cryptocurrency market centers around spot Bitcoin ETFs with the U.S. Securities and Exchange Commission (SEC) currently evaluating multiple applications and with unconfirmed reports suggesting that a decision to approve these applications and facilitate the listing of spot Bitcoin ETFs could be imminent, possibly within the week. A Reuters report from December 29, 2023, hinted at the possibility that the US regulator might clear some spot Bitcoin ETFs either today or tomorrow, paving the way for the ETF launch on January 10, 2024. The authenticity of this report and the likelihood of the green light being imminent remain uncertain, but the cryptocurrency markets have been responsive to any positive news, even those with vague details. Bitcoin is currently trading at its highest level since April 2022, marking a daily high just below the $46,000 threshold and from a technical standpoint, the situation appears bullish, as BITCOIN has broken above the upper limit of the $41,000-44,300 trading range and continues to gain momentum. As optimism grows in the crypto space, It seems almost certain that a Bitcoin ETF will be approved and the main doubts are now about timing rather than anything else.     

With just two trading days remaining until the new year, attention in the City of London is shifting towards the prospects for 2024. Questions about the pace of interest rate cuts, the possibility of the UK avoiding a recession, the timing of the general election, and the potential victor are in focus.  One point of view indicates a more optimistic outlook for the UK as it "turns a page from the difficult post-pandemic years." PwC identifies various reasons for this optimism, including an anticipated improvement in conditions for households as the minimum wage is set to increase by almost 10% in the spring. Predictions suggest a faster-than-expected decline in inflation, nearing the UK's 2% target, contributing to a positive shift in consumer sentiment and while growth is anticipated to be modest, the UK is projected to exhibit a faster recovery relative to pre-pandemic levels compared to Germany, France, or Japan. Forecasts indicate that the UK will be the fourth-best performing G7 economy concerning pre-pandemic levels, with real GDP expected to be around 2.7% higher in 2024 on average relative to 2019 levels. However, challenges persist as consumer prices, despite an expected cooling of inflation, are projected to remain about a quarter higher than in early 2021 and with London's average rents are forecasted to continue rising, reaching over £2,000 per month by the end of 2024, approximately three times higher than the north-east's average while the rest of the UK is also expected to witness a continued uptrend in rents, with an average increase of over 5% in 2024. Additionally, a notable surge in corporate insolvencies is anticipated, with nearly 30,000 firms expected to face challenges due to high interest rates and increased costs which is likely to be felt more acutely by smaller businesses, particularly in sectors such as hotels & catering, manufacturing, and transport & storage and which could cause significant issues if it were to lead to an increase in unemployment just as the Bank of England is beginning to shift its policy and in particular around election period, potentially further influencing the ultimate results.

ETF approval potential continues to move crypto markets Institutional investors are directing capital investments into Bitcoin as the deadline for the U.S. Securities and Exchange Commission (SEC) to approve a spot BTC exchange-traded fund approaches. This trend is evident in MacroMicro's Bitcoin Futures Smart Money Index, a data tracking website based in Taiwan, which monitors the spread between large investors' long and short positions on the Chicago Mercantile Exchange. Derived from the CFTC's weekly Commitment of Traders report, the smart money index has witnessed a notable increase this quarter, driven by the narrative surrounding the potential spot ETF approval and growing expectations of a Federal Reserve rate cut in 2024. The SEC has reportedly set January 10 as the deadline for approving or rejecting an ETF directly investing in Bitcoin and while anticipations of substantial inflows into the asset class are high upon the potential ETF launch, it remains possible that the actual demand for the BTC Spot ETF may initially fall short of market expectations, possibly leading to a 'sell the news' scenario in January. In addition, the general economic uncertainty seen recently may lead many to be more cautious as the main theme for the beginning of 2024 will likely continue to be the ETF approval and interest rate decision by major central banks which could significantly impact market performance.    

Indices trying to end 2023 on a high note Global stock markets seem to be headed for an end-of-year 'Santa rally' as traders and investors return to their desks after the Christmas break, gearing up for the final push into 2024. The ongoing optimism surrounding the prospect of central banks initiating interest rate reductions in 2024, with multiple cuts expected next year, continues to propel shares higher after the US stock market experienced gains in light trading, bringing the S&P 500 index to its highest intraday level in nearly two years.   This positions the S&P 500 just below 1% of its closing all-time high of 4,796.56 recorded in January 2022 with this rally reflecting investors' growing confidence in the ability of US policymakers to engineer a 'soft landing,' effectively curbing inflation without precipitating a recession with this sentiment gaining further traction after the recent US PCE index data revealed a deceleration in inflation last month. However, it is important to note that the situation in the UK is significantly more troubling after recently released data continues to indicate inflationary and economic issues in the economy as the Bank of England may have run out of moves.    

Apple seems to be in trouble this holiday season after news emerged that it will cease the sale of its smartwatches through its own US stores ahead of Christmas following a patent infringement case setback, dealing a blow to the tech giant during the crucial sales season.   Apple says it will pause all sales of the Apple Watch Series 9 and Apple Watch Ultra 2 in the US this weekThis is due to an ITC sales ban over a patent dispute between Apple and MasimoThe Apple Watch models will no longer be available on Apple's website starting on December… pic.twitter.com/fSnE0LhSak — Apple Hub (@theapplehub) December 18, 2023     The company announced a "pre-emptive" discontinuation of US sales for two of its latest Apple Watch models, the Series 9 and Ultra 2, starting on December 21 through its official website and post-December 24 in physical stores. This decision follows the US International Trade Commission's issuance of a "limited exclusion order" against the products in October, posing a potential import ban on the devices. A US judge had previously ruled in January that a prominent feature of Apple's latest watches, the blood oxygen sensor, infringed upon patents held by medical device maker Masimo.   Apple's share price initially traded almost 2% lower as investors expressed concerns about the situation and the potential ramifications of such a ban. However, the price is attempting to recover while closing the gap and some solace may be found in the limited impact of this situation, confined to the US market.   Apple to halt US sales of Series 9, Ultra 2 smartwatches over patent dispute https://t.co/FgY8iElkC7 — Yahoo Finance (@YahooFinance) December 18, 2023   Nevertheless, it remains a disconcerting development that could trigger further movements in one of the most widely followed stocks at a time when we've seen growing uncertainty about its performance related to the sales of smartphones and its shift to alternative products like watches, accessories and from next year, the Vision Pro.  

Interest rates remain in focus after central bank decision week Following an intense week of central bank decisions with most of them being in line with expectations of keeping rates unchanged, it's become evident over the past few months that financial markets are aligned in the belief that UK interest rates have reached their peak and it would be surprising if the Bank of England were to implement an increase in UK interest rates in the near future, with such a decision likely only occurring in response to a substantial shock in inflation data. Meanwhile, predicting the timing of the initial interest rate cut, which would mark the first fall in UK interest rates since March 2020, is more challenging.  One thing that remains clear is that the UK economy is in a much worse position than both its European and US counterparts as GDP forecasts continue to indicate the potential for a recession which may trigger a response from the central bank. The BoE has also appeared to follow the US central bank (Federal Reserve) in its footsteps and may await the signal from it before starting its own rate cut cycle as rates are also expected to start falling in early 2024. In either case, new Bloomberg projections point to the possibility of the first rate cut being implemented by the Bank of England in the first quarter of 2024, followed by a gradual fall in rates throughout the following meetings with the target being reached in the coming years.      

Focus on CPI data ahead of crucial FED decision this week While the decision to maintain current interest rates appears highly probable, the primary focus of the market this week will be on Jerome Powell's upcoming speech as the Federal Reserve Chair has a significant opportunity to impact market sentiments by potentially signaling an end to the rate hike cycle. Nevertheless, such a development should not significantly alter investor expectations as it has been a wide topic of discussion for quite some time, however, a significant deviation from those expectations could lead to some noticeable impacts on USD and potentially even on risk assets.   Despite the gradual normalization of macroeconomic data, shifts are aligning favorably for the Fed as the labor market is also exhibiting signs of stabilization while inflation is clearly slowing down which has prompted investors to engage in speculation regarding the timing of potential rate cuts. In this scenario, there is a potential for a boost in bond prices, accompanied by a concurrent reduction in yields as anticipation of a Fed pivot could drive capital accumulation in bonds, taking advantage of the prevailing, albeit high, interest rates. In either case, focus today will be on US CPI data ahead of tomorrow's FED decision and while it is unlikely that the data will change tomorrow's outcome, it could certainly have a short term impact on global markets. 

Today, the focal point in the economic calendar is the eagerly awaited release of the Personal Consumption Expenditures (PCE) inflation data from the United States scheduled for 13:30 GMT. This reading for October is notably delayed compared to the recently disclosed November inflation data from most European countries but despite the delay, the market is closely monitoring this metric as it is the Federal Reserve's preferred measure.  The current reading is not anticipated to significantly alter the U.S. central bank's stance on future policy as the path to achieving the 2% inflation target is perceived as lengthy, suggesting that Federal Reserve Chair Jerome Powell's communication and policy stance are unlikely to change in response to an excessive decline or increase in the inflation figures.Market expectations are aligned for a decline in U.S. inflation for October, with PCE inflation expected to drop to 3.0% year-on-year from the previous 3.4% year-on-year. Core PCE inflation, excluding volatile food and energy components, is also expected to decrease to 3.5% year-on-year from 3.7% year-on-year, while the monthly core reading is forecasted to rise by 0.2% month-on-month, following a previous increase of 0.7% month-on-month. Simultaneously, Eurozone inflation data for November has been published, indicating a decrease to 2.4% year-on-year from 2.9% year-on-year, aligning with expectations of 2.7% year-on-year and although inflation in the Eurozone remains above target, the core inflation reading for November is the lowest since Q1 2021. A PCE inflation reading in line with expectations may impact the recent dollar rally, but any deviation could prompt hawkish sentiments at the Federal Reserve, questioning the adequacy of current interest rates and once again bring the possibility of a final rate hike.In the context of these developments, the EURUSD currency pair is experiencing its most significant weakening since October 24, approaching the critical level of 1.0900 and key support just below it. However, it is important to remain cautious considering the current dynamics in U.S. yields (inverted TNOTE), which do not currently indicate a compelling case for further declines.  

Around 9 a.m., BoE member Dave Ramsdey shared his comments in a press conference, providing insights into the current UK macroeconomic scenario. Ramsdey's key comments indicated constraints on growth due to monetary policy, unexpected resilience in the British economy for 2023, weak productivity growth, signs of increased unemployment, and the challenge of addressing domestic inflation, particularly in services. Despite signs of a cooling economy, inflationary forces, especially in services, continue to exert influence, presenting a challenging backdrop.Considering the implications for the British pound and the GBPUSD pair, the pivotal factor shaping the long-term trend might be predictions regarding interest rate cuts in 2024. The current market expectation is for the BoE to reduce rates by just over 50 basis points by November 2024 while the Federal Reserve is anticipated to implement nearly three cuts within the same timeframe, totaling 75 basis points. BoE's current interest rates stand at 5.25% as the Fed's rates range between 5.25% and 5.50%. The daily chart of the GBPUSD pair shows the ongoing session involving a retest of the support zone defined by the previously breached barrier. Successful defense of this support and a potential upward breakout could lead to a move toward the zone around 1.27, while a downward breakout may find major support around the 1.25-1.24 barrier. 

Warm weather spells trouble for Natural Gas US natural gas prices experienced a noticeable decline with NATGAS trading nearly 4% lower at the start of the week. This downturn can be attributed to the prevailing forecasts indicating a shift towards warmer weather in the United States in the coming days as the expectation of milder temperatures has cast a shadow on natural gas prices as it suggests a potential decrease in demand, particularly at the start of the heating season.    Projections for the next 8-14 days consistently point towards above-average temperatures spanning a more extensive geographic scope across the United States and this prediction of higher-than-average temperatures intensifies the downward pressure on natural gas prices.   Looking at the technical situation shows the persistence of a bearish trend since the end of October 2023.   This further reflects the delicate balance between weather forecasts, demand dynamics, and market trends, emphasizing the sensitivity of natural gas prices to external factors.   While this appears to be the current situation, a sudden shift towards a colder climate prediction could bring a significant rebound of prices in the near term.   

Cryptocurrency markets face pressure amid lingering uncertainty At the start of the week, the cryptocurrency market reflects predominantly bearish sentiments, marked by moderate declines across several currencies. Bitcoin has undergone a correction of several percentage points since Friday, when bullish activity drove its price to levels around $38,500 as Ethereum retreated from its $2150 peak, which approached yearly highs. These declines coincide with short-term investors, holding BTC for less than 155 days, enjoying nearly 15 percent average gains, historically foreshadowing heightened short-term selling pressure and preceding corrections, as suggested by Glassnode's analysis.   Interestingly, J.P. Morgan, in its analysis of the prevailing market conditions, highlights the positive implications of Binance's settlement with the US Department of Justice, viewing it as advantageous for both the exchange and the overall crypto market as the investigation into the leading cryptocurrency platform did not unveil concerns regarding liquidity or user funds, diminishing the likelihood of a 'second FTX' scenario in the eyes of the market.    Additionally, recent on-chain data indicates a slightly elevated selling activity by long-term investors with the critical trading range between $35,300 and $36,000 being deemed pivotal for Bitcoin's momentum as December has traditionally proven successful for Bitcoin, yielding an average return of 12%, potentially hinting at prices approaching new highs by the month's end. In any case, the situation remains uncertain and any major news event could have significant repercussions on the price of not only bitcoin, but the entire cryptocurrency market.  

CZ steps down as head of Binance as scandal emerges   The CEO of Binance, the world's largest cryptocurrency exchange, is the latest addition to a growing list of crypto personalities facing legal trouble and is resigninging following the company's admission of guilt on Tuesday to various charges, including violations of the Bank Secrecy Act—an anti-money laundering law.   In response to these transgressions, Binance has agreed to a historic settlement, agreeing to pay over $4.3 billion, marking the most substantial penalty ever imposed by the Treasury Department as Treasury Secretary Janet Yellen, in prepared remarks, asserted that Binance had engaged in "consistent and egregious violations of U.S. anti-money laundering and sanctions laws." The Justice Department, in a news release, further highlighted that Changpeng Zhao, the CEO, has pleaded guilty not only to the aforementioned charges but also to the failure to maintain an effective anti-money laundering program.    As part of the settlement, Zhao has consented to a $50 million fine which may not seem like much to the billionaire but further underscores the idea that at least in the crypto industry, no one is too big to fail.  The development underscores heightened regulatory scrutiny on cryptocurrency platforms and emphasizes the importance of compliance with financial regulations in the burgeoning digital currency space.    While this is a positive development for regulation, it certainly shakes confidence in the sector, particularly among those that were already doubting the legitimacy and legal compliance of those working in the industry at a high level. There is some irony in the fact that CZ is in part credited with exposing FTX's fraud which led to its collapse and is now himself the subject of an investigation highlighting that no one is immune to scrutiny, not even the crypto king.

Fed Chair Powell gives investors reasons to cash in profits  European stocks lost some ground on Friday to end what has otherwise been a positive week for stocks after Fed Chair Powell stated that policymakers were not confident interest rates are high enough to cool inflation. If investors were looking for a reason to lock in some profits after a week and half of strong stock gains across European and US stock markets, Powell handed it to them on a silver plate. I don't believe what Powell said was a shock but I do feel the general consensus amongst investors is that interest rates are at or close to their peaks and their focus is turning to the timing of rate cuts. The fact the Fed has sent a clear signal that the conversation for rate cuts is far too premature, this has given some investors a bit of a reality check today with the FTSE losing more than 1% with European indices such as the DAX following a similar pattern.    Crypto recovery continues as Ethereum price takes flight We're seeing a continuation of the positive price sentiment seen in Cryptocurrencies over the past week. After news broke that Blackrock had registered its iShares Ethereum Trust corporate entity in Delaware and then proceeded to file a 19b-4 form with Nasdaq for its much speculated Ethereum ETF, this has gotten ETH buyers very excited today. The result in the markets has been clear, with Ethereum enjoying strong buying momentum helping to lift prices by more than 9% on the day to trade at its highest levels for 19 months above $2000. With Bitcoin also trading around $37,000 - despite some minor falls in the past few hours - the famous 'crypto buzz' certainly feels to be returning.  

  In analyzing the state of the British economy, this week's macroeconomic readings have provided a mixed outlook. With indicators such as wages, GDP, and industrial production under scrutiny, market observers are eager to gain insights into the potential depth of the recession and the Bank of England's (BoE) approach to interest rates.   Examining the released figures, renowned economist Walid Koudmani highlights the various nuances in the current economic landscape. Wages in the UK continue to rise, with average earnings for a 3-month period surpassing expectations at a 6.9% year-on-year (YoY) growth rate, slightly higher than the previous level of 6.7% YoY. However, the number of unemployment benefit claims has seen a significant increase of 25.7k, reversing the prior decline of 22.5k. Additionally, the quarterly change in employment of 102 thousand falls short of the previous level of 250k, although it exceeds expectations set at 85k.     FXMAG.COM: What do this week's macroeconomic readings - wages, GDP, industrial production - tell us about the state of the British economy? Will the recession be deep? Will the BoE continue to raise rates?   Walid Koudmani The macroeconomic readings released this week paint a mixed picture of the British economy. Wages in the UK continue to rise with average earnings for a 3-month period increasing by 6.9% year-on-year (YoY), slightly higher than the expected 6.8% YoY and the previous level of 6.7% YoY.  However, the number of unemployment benefit claims increased by 25.7k, reversing the previous decline of 22.5k. The quarterly change in employment amounted to 102 thousand, surpassing the expected 85k but lower than the previous level of 250k. The rise in wage growth is a concern as it could indicate persistent inflationary pressures to come which could lead to a decline in consumer spending, leading to a negative impact on economic growth.  Overall, the macroeconomic readings released this week do not provide a clear picture of the state of the British economy. However, they do suggest that the economy could be facing some headwinds, such as rising inflation and slowing growth. It is too early to say whether the UK will experience a deep recession, but the BoE is likely to continue raising rates in an effort to combat inflation and expectations for those rates continue to increase. While the Pound has benefited from this news, there could be a noticeable pressure on stocks as the cost of money continues to rise and investors are left with less resources to allocate. In addition to this, there are several other factors which may influence the British economy including the outcome of the war in Ukraine, the pace of global economic growth, and the direction of commodity prices. 

The financial market is always keenly interested in the fluctuations of commodity prices, and silver, a crucial metal in the global economy, is no exception. In recent months, the price of silver has exhibited remarkable volatility, surging to a high of over $26 per ounce in April before retracing back to the $22 level. This intriguing situation prompts us to ponder what lies ahead for this precious metal. Will silver have the opportunity to revisit historic highs? To shed light on this matter, we turn to the expertise of renowned financial analyst, Walid Koudmani. With his extensive knowledge and insights into market dynamics, Koudmani delves into the various factors that could influence the future trajectory of silver prices in the coming months.   FXMAG.COM:  The silver price has made a retreat back to the area of $22 per ounce. What's next for the metal - does it have a chance to head toward historic highs?   Walid Koudmani: The price of silver has been very volatile in recent months, reaching a high of over $26 per ounce in April before falling back to the $22 level and the situation continues to be interesting. There are a few factors that could influence the price of silver in the coming months.  First, the global economy is facing a number of headwinds, including rising inflation, slowing growth, and the ongoing war in Ukraine which could weigh on demand for silver, as investors may turn to other assets, such as gold, for safety. Second, the Federal Reserve is expected to continue raising interest rates in an effort to combat inflation even though it seems to be nearing the end of its cycle which could also put pressure on the price of silver, as higher interest rates make it more expensive to borrow money and invest in commodities. However, there are also some factors that could support the price of silver in the coming months since silver is a relatively rare metal, and demand for it is expected to grow in the coming years as the global economy focuses on electric energy which utilizes the metal for many of the components needed in those devices such as batteries. Second, silver is often used in industrial applications, such as electronics and solar panels and as these industries grow, demand for silver is likely to increase. Overall, the outlook for the silver price in the coming months is uncertain as the metal is facing a number of obstacles while there are some things that point to some potential room for growth.It is too early to say whether silver will reach historic highs, but it is certainly a metal to watch in the coming months.

Let's go back to the ESG investing which we asked XTB's Walid Koudmani about. Let's hear from him as he comments on the EU directive and its potential impact on the ESG companies and more. FXMAG.COM: Will the EU directive and other factors play in favour of the rise of such companies? Walid Koudmani (XTB): The EU directive and several other factors are likely to play a significant role in the rise of ESG (Environmental, Social, and Governance) companies in the coming years. Walid Koudmani (XTB): The EU has been a leader in promoting sustainable finance and ESG investing, and its Sustainable Finance Disclosure Regulation (SFDR) aims to increase transparency and consistency in ESG reporting and investing across the EU as it requires asset managers and financial advisors to disclose how they integrate ESG factors into their investment decision-making, and to provide more detailed information on the sustainability characteristics of their products. This increased transparency and standardization is likely to boost investor confidence in ESG investing, and could lead to increased demand for ESG-focused products and services.  Overall, the combination of regulatory and market forces is likely to create favorable conditions for the rise of ESG companies in the coming years Walid Koudmani (XTB): In addition, other factors such as changing consumer preferences, increasing regulation, and the emergence of new technologies and business models are also likely to drive the growth of ESG companies. For example, companies that prioritize sustainable practices and social responsibility may be better positioned to attract and retain customers, employees, and investors who value these factors. Read next: There are risks and challenges associated with ESG investing, such as the difficulty of accurately measuring and...| FXMAG.COM Walid Koudmani (XTB): Overall, the combination of regulatory and market forces is likely to create favorable conditions for the rise of ESG companies in the coming years. However, as with any investment or business strategy, there are risks and challenges associated with ESG investing, and investors and companies will need to carefully evaluate their options and strategies to maximize their chances of success while verifying the credibility and competitiveness of such claims.

Investors are wondering what's ahead of ESG companies in times of increasing number of companies which share their ESG plans. What's more, a new directive imposed by the EU is going to be introduced in the coming months. Driven by curiosity we asked Walid Koudmani from XTB about 2023 year in ESG investing. FXMAG.COM: How do you see 2023 in terms of ESG companies investing?  Walid Koudmani (XTB): It's likely that ESG (Environmental, Social, and Governance) investing will continue to be a major trend in 2023 and beyond, while more investors prioritize sustainability and responsible business practices in their investment decisions as the increasing focus on ESG factors is driven by a range of factors, including growing public awareness of environmental and social issues, regulatory changes, and the emergence of new technologies and business models that enable more sustainable practices. Read next: The EU directive and several other factors are likely to play a significant role in the rise of ESG| FXMAG.COM Walid Koudmani (XTB): In 2023, we may see continued growth in the ESG investing space, with more companies and investors embracing sustainability and social responsibility as core principles of their operations. This could lead to increased demand for ESG-focused investment products, such as sustainable funds and green bonds while favoring companies that invest in these ideals as they may appear more "future proof" than competitors who opt not to. In 2023, we may see continued growth in the ESG investing space, with more companies and investors embracing sustainability and social responsibility as core principles of their operations Walid Koudmani (XTB): However, there are risks and challenges associated with ESG investing, such as the difficulty of accurately measuring and comparing ESG performance across companies and sectors as investors will need to carefully evaluate ESG investments and consider a range of factors, including the quality and reliability of ESG data to make informed decisions.  

Gold reaches highest level in a year as investors seek safe haven. The upward move which started for the price of gold on the 8th of March is continuing at the beginning this week as risk-off moods on the financial markets provide support for safe haven assets. While news of UBS buying the troubled Swiss lender, Credit Suisse, in a government-brokered deal provided some short term relief, it failed to ease market concerns as the deal will include write down of Credit Suisse's AT1 bonds and may turn out to be a hit to banks and other institutions with exposure to Credit Suisse. Gold broke $2000   Following these market moves, gold rose over 1% today, breaking through the key $2,000 per ounce level this morning and reaching the highest level since March 2022 before pulling back and retesting Friday's highs. Read next: Microsoft, Amazon and Google increased by nearly 15% last week| FXMAG.COM

It is no secret that the trouble in the banking industry has been the main topic of discussion and mover of markets over the past week or so as governments and central banks scrambled to try and find a solution to the collapse and potential collapse of major names in the sector. Some of these efforts involved clients in the US being reassured that their funds would be available in an effort to prevent a further bank run while the headlines in Europe have all been surrounding the ongoing Credit Suisse debacle which some say may threaten the stability of the financial system in the continent.   Over the weekend, in an emergency meeting, several parties discussed alternatives and options aimed at salvaging the bank and giving relief to investors and the markets as we saw Credit Suisse's share price tank to their lowest levels as nothing seemed to help over the last week, not even news of a 50 billion CHF liquidity injection by the Swiss National Bank. Read next: Microsoft, Amazon and Google increased by nearly 15% last week| FXMAG.COM   As some expected would happen, UBS, the largest bank in Switzerland, as part of a deal brokered by the government will purchase Credit Suisse for 3 billion CHF and receive additional 9 billion CHF in government guarantees   As some expected would happen, UBS, the largest bank in Switzerland, as part of a deal brokered by the government will purchase Credit Suisse for 3 billion CHF and receive additional 9 billion CHF in government guarantees. On top of that, additional liquidity to a combined entity will also be provided in an effort to stabilize the situation. However, while initially this may have brought some calm to the market, share price of UBS dropped over 14% as investors continued to be on edge and as uncertainty returned. One of the main concerns could involve the fact that the UBS takeover of Credit Suisse leads to an interesting and potentially dangerous situation in the Swiss banking sector as merging the two largest Swiss banks means that over 50% of bank deposits in the country will be held by a single institution which in itself could be a serious risk if another bank run were to occur. As more details emerge and as the week progresses, there will be many events to keep an eye on including the central bank decisions that continue to be more relevant than ever as challenging macroeconomic situations now meet major headlines and banking scandals. This could prove to be one of the most volatile weeks of 2023 so far on the markets as investors flee to risk-off assets.

UK stocks deepend decline after budget announcement While the pound didn't show many signs of reaction to today's budget announcement by Chancellor Hunt, UK stocks took a further dive with the FTSE100 reaching the lowest level since December 2022. Some of this negative sentiment is certainly tied to the prospect of a crisis in the banking sector sparked by the collapse of several high profile US banks but many are now asking themselves how this new budget by the UK government will impact economic prospects moving forward. Furthermore, expectations of inflation have been lowered further from previous estimates to 2.9% which may prompt a modified reaction by the Bank of England as we head to the end of the year. The pound continues to hover around the 1.205 region against the US dollar after the greenback seemed unimpressed with US retail sales and PPI data, but any major news may lead to a significant reaction across asset classes. In conclusion, many of the measures announced today were somewhat expected and certainly were perceived better than the "mini-budget" announcement by the Truss cabinet, which now famously caused a crash in the pound. It remains to be seen how much of it will be able to be implemented as businesses and consumers continue to struggle with cost of living and economic uncertainty.  Read next: Facebook and Instagram parent Meta has announced discontinuing NFT support on mentioned platformed | FXMAG.COM

Markets start the week in a panic as bank collapses impacts sentiment A combination of 'risk appetite' sentiments fueled by hope around a 'helpful Fed' and banking sector problems put downward pressure on the US dollar over the weekend. Following the bankruptcy of three US banks Silvergate, Signature, Silicon Valley Bank (now we know that,First Republic Bank also joined) the Federal Reserve, the Treasury Secretary and the National Economic Council reached an agreement with banking regulators to ensure that clients would be able to withdraw their funds. As mentioned, another US bank may be facing collapse - First Republic Bank. This bank is trading 60% lower in the US premarket session and has significantly impacted moods on the markets following the European cash session open with the German Dax down over 3,25% from daily highs. Furthermore, this situation has also significantly impacted expectations for the upcoming Fed decision with many now expecting a 25bp hike when it seemed almost certain for some that the US central bank would raise rates by 50 bp previously. In any case, markets remain very reactive and susceptible to further developments and could continue to be volatile throughout the week as a major domino effect could cause widespread risk-off moods leading to further losses for stocks and riskier assets.   Read next: Strong US labor market and a less hawkish Fed are playing in favour of crude oil price| FXMAG.COM Oil prices pull back at the start of an uncertain week Oil prices started the week with a significant downward move as both Brent and WTI are down over 2% as they approach their monthly lows while prospects of demand remain uncertain and as Russia continues to export its oil to several oil producing countries, further increasing supply on the markets. Furthermore, recent data from China shows that imports in January-February were 10.4 million barrels per day, 1 million bpd lower than November-December which may indicate that the country is still utilizing previously accumulated stocks. While investors remain focused on the potential collapse of several US banks, the situation on the oil market also continues to be very uncertain as the tight supply/demand balance could shift rapidly and lead to a potential rebound of prices or a continuation of the downward move which could see prices reach the lowest levels since the 23rd of February.

FTSE100 and the Pound boosted by prospect of post Brexit deal The UK stock market started the week trading higher as investors await the outcome of today's potential EU-UK deal regarding Northern Ireland after a long wait and period of uncertainty. The index is up over 0,5% and is testing Friday's highs around 7930 points while the pound is one of the best performing currencies today trading higher against most other major, minor and emerging market currencies. While the prospect of a trade deal would resolve several long standing issues, any further roadblocks in the process could prove to be quite counterproductive for the moods of investors and could lead to a pullback from current levels which have already acted as a resistance in the past.  Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM Natural Gas starts the week trading higher US natural gas prices once again started the week with an upward move as they continue the upward movement launched on Friday which was triggered by forecasts of colder weather in key US heating regions over the next two weeks and therefore increasing demand prospects for natural gas. It is important to note that US natural gas prices have fallen around 70% between mid-December 2022 and mid-February 2023 despite some expectations of a potential supply issue which brought concerns of shortages as we were heading into the winter months. While there have been some upward corrections during this downward impulse, the one we are observing currently deserves a note as it attempts to break above a consolidation range which has kept the price moving sideways since the beginning of February. A sustained break above might prove to be the beginning of a new trend, at least in the short term, while a pullback could once again see the price locked in the previously mentioned range.

Turkey's central bank will decide on rates on Thursday - FXMAG.COM asked Walid Koudmani, Chief Market Analyst at XTB, what can be expected, considering high inflation, an earthquake and the country's generally lackluster economic situation. Naturally, the recent earthquake might have made the decision more difficult for the central bank While some analysts believe that Turkey's central bank will lower interest rates in an attempt to stimulate economic recovery, it will be important to keep in mind that the country's inflation remains a significant problem to contend with amid an overall troubling macro situation. Naturally, the recent earthquake might have made the decision more difficult for the central bank as keeping a higher interest rate in times of economic crisis could add fuel to the fire, however it must be careful to not overextend itself and ultimately end up making other problems worse. In either case, it appears that opinions are split on the decision and there is a general uncertainty surrounding the decision which will only be clarified once we receive the actual news and which may have a significant impact on the already volatile Turkish Lira. Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM

UK PMI data sends GBP above 1.21 against the USD Today's PMI data paints a positive picture with the composite output index reaching an 8 month high showing the fastest rate of private sector output expansion. Meanwhile, services and manufacturing also showed signs of improvement and may further boost expectations of a policy approach change by the Bank of England in the coming months as it evaluates key macroeconomic reports relating to activity and inflation. All in all, this data suggests that the UK economy is in part recovering despite the ongoing cost of living crisis and general uncertainty which has made it quite difficult to predict what the government and central bank's intentions are in the near future. The pound rose sharply against the USD after the report, easily breaking through the 1.21 handle and reaching the highest level since the 15th of February while the FTSE100 also appears to be making an attempt to recover as it hovers around 7967 points.  Read next: In other words, by the time EU CPI is announced on Thursday, EUR/USD exchange rate may already reflect a slight increase in inflation from 8.5% to 8.6% | FXMAG.COM Bitcoin hovers around $25,000 as uncertainty continues The main cryptocurrency continues to trade sideways at the start of the week after a mixed performance so far this month with the price today hovering around the key $25,000 level as Bitcoin's hash rate reached the highest level ever while general uncertainty dominates the market after a long weekend in the US reduced liquidity in the market. Investors are focused on global PMI data today and potential news relating to crypto regulations as several countries continue to hint at a potential expansion of the sector.  Meanwhile, Ethereum pulled back from the $1,700 level and is currently testing an interesting support area around $1684 while most major altcoins attempt to find a direction ahead of the US open.  Despite this, as we have seen in the past, the crypto market can rapidly become quite volatile and investors should be wary of major moves as breakthroughs of key levels could cause a significant shift in sentiment and subsequent corrections.

The Bank of England announced a monetary policy decision at 12:00 pm GMT and as widely expected it raised its benchmark interest rate by 50bps to 4.0 % with the 10th consecutive rate hike as it attempts to deal with high inflation and despite the risks of an expected economic recession this year. Furthermore, policymakers said, if there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required. However, some optimism came in the form of the forecasts, which showed inflation in one year's time at 3.01% (November forecast: 5.2%), based on market interest rates and model forecasts. The pound received a boost from this news and rose against the USD which saw some weakness following yesterday's decision by the FED to raise interest rates by 25bp and in essence signalling the potential end of its tightening cycle. Investors also received the long awaited ECB decision, which was the last major central bank decision of the week with the Bank announcing a 50bp hike as expected. This event continued to add to the volatility across European equity markets and the Euro which have had a mixed reaction to the decision with EURUSD pulling back from the 1.10 area as the German index approaches recent highs. While central bank decisions were a highlight of the week, they are by no means the last events worth keeping an eye on as mega-tech company earnings await us with Alphabet, Apple and Amazon publishing their results after today's US market close and with the NFP report being published tomorrow which will give an idea of the highly followed US job market and which could change expectations for further rate hikes by the US central bank. Read next: Alphabet publishes its earnings today. Q4 EPS expected to reach $1.18| FXMAG.COM

USD pulls back as prospects of dovish Fed increase EURUSD at its highest level in almost a year as traders await ECB member speeches and next week's Fed decision. The main currency pair has extended its upward move and is trading around 1.09 after reports emerged suggesting that the Federal reserve will go ahead with its 25 bp increase in the upcoming meeting which will be preceded by a media blackout from the US central bank. Meanwhile the European central bank appears to be continuing its strategy aimed at combating the massive inflation issue which has severely impacted consumers across the continent by extending the series of 50 bp rate increases. While US stock markets and riskier assets like crypto currencies appear to be benefiting from this narrative, it remains to be seen if the Fed will meet those expectations, as any major shift from expectation could cause a significant increase in volatility and a rebalancing of asset dominance.  Read next: EXMO CEO about Microsoft earnings: According to their financial report, a profit of $53.14 billion and an Earnings Per Share (EPS) of 2.33 are expected | FXMAG.COM Oil.WTI approaching YTD highs while brent continues upward move Both Brent and WTI have benefited lately from an improved economic sentiment and prospects of an increase in demand from China, the world's second largest economy. After a difficult start to 2023, which saw prices drop over 10%, we have seen a significant recovery in energy commodities as improving economic outlooks and potential lower rate increases from central banks boosted optimism regarding the oil market while leading Brent to trade around $88 as WTI tests the $82 level. This is particularly true considering how unlikely a readjustment of supply from OPEC could be in the short term as the group will probably wait to modify its production target even if there is a substantial increase in demand. In either case, oil traders will be on high alert as prices attempt to break through recent highs and as a major shift in demand prospects from the world's biggest economies could lead to a trend inversion as we have seen in recent times. 

European Central Bank decision, monetary policy of BoJ, fluctuating Bitcoin and earnings of Netflix, Procter&Gamble and others - as we've mentioned already, there's so much to talk about this week. Walid Koudmani answers our questions. Provided Eurozone inflation comes at less than 10% on Wednesday, would you expect ECB to go for a series of 25bp rate hikes? While the ECB and other central banks have been closely monitoring inflation figures in an attempt to determine their policy decisions, there has been a clear disparity between the FEDs approach and the ECBs which in part is due to the effects of the Russia-Ukraine conflict having a greater impact on the continent. Despite this, we can see a clear change in tone from central bankers and while it is unlikely that the ECB will adjust its rate below 50 bp in the first meeting of the year, a positive encouragement from lower than expected inflation data could lead to a 25 bp hike in the following meeting until the bank decides it is time to change its approach fundamentally once targets are reached. Bank of Japan which has recently hinted at a monetary policy pivot, decides on interest rate this week. Will they escape ultraloose approach this very week? The Bank of Japan has been an interesting example of a vastly different approach to policy as it has maintained its very loose and dovish approach while intervening on the markets a few times to support the Yen. However, it remains unclear how long it will be able to sustain this approach as pressure mounts and as the country's currency begins to suffer from the lack of tightening while other banks have proven to be quite aggressive. Despite this, the BoJ has reiterated its intentions and it might take a surprise event in order to spur a significant change in its approach which could take longer than expected. Read next: Also if inflation is reported below 10% on Wednesday, the ECB may be hesitant to pivot its current policy of economic tightening | FXMAG.COM Bitcoin had given back some of its spectacular gains - is it just a Correction? Just as we have seen a resurgence of stocks and risk assets coinciding with a drop in the US dollar, we are also seeing a significant bounce of Bitcoin which managed to break past the psychological barrier of $20,000 after several months of struggle and extremely negative sentiment surrounding the cryptocurrency market. However, while this is an encouraging sign for bitcoin and crypto investors, it could prove to be a short term correction if there is a significant shift in approach or expectation related to the macroeconomic situation or central bank approach which appears to be increasingly tied to market performance. Some big names report earnings this week. What do you expect from Netflix, PG and Goldman Sachs? There will be a lot of pressure on the big Wall Street names to perform as investors anxiously await results from the earnings season. Netflix, PG and Goldman Sachs are all highly anticipated reports and could give an idea of the conditions of consumers and trends for the last few months of 2022 as inflation continued to be a key issue impacting markets. However, after the struggles seen in the earlier parts of the year from many companies, some investors may be optimistic about a resurgence while others may expect a continuation of the negative performance. In either case, a significant surprise may cause additional volatility in the market as many of the companies reporting in the first few weeks of the earning season carry significant weight in the indices and in general market perception.

BRC report shows boost in sales over holiday season Today's BRC report showed an increase in total sales for the month of December by 6.9% compared with a year earlier as the economy still contends with the cost of living crisis. While this marked a noticeable improvement from November's 4.2% growth rate, it is important to note that some of this could be a result of high inflation driving prices and compensating for lower volumes. In addition, while sales were boosted by events like the world cup and holiday season, it remains to be seen if this trend will persist in the coming months while some economists believe inflation may have peaked or may at least be approaching its peak. In either case, this could be considered a positive sign and bring some optimism in a difficult economic context. The FTSE100 started the day trading higher after yesterday's pullback and with several central bank speeches today, could attempt to break through yesterday's highs. Meanwhile, the Pound managed to reach a 3 week high yesterday against the USD which has been experiencing significant weakness and today's events could bring some additional volatility to the currency market.  Read next: Damage to the crypto industry increased by almost a half in 2022 | FXMAG.COM Oil prices may be on the verge of breaking through the consolidation area Oil prices have managed to remain in the recent consolidation area after the prospects of an increase in demand from china supported higher valuations following a difficult start to 2023 which saw Brent drop over 10% from a high of $87 while WTI fell around 11% to reach a low of $72,44 before rebounding. In both cases it appears that the overall sentiment has improved and while traders await today's API inventory report from the US, it is possible that a surprise could cause a breakout from the recent sideways trading area. From a technical point of view, Oil.WTI is trading just below $75 and testing the 21SMA after breaking above the 8EMA on the hourly chart and while RSI still hovers around the 60 level, it appears that there might be still room for upside. On the other hand, a negative turn of events could swing sentiment in the other direction and cause an extension of the downward move.

Positive sentiment across european markets Indices across europe started the week trading higher and with a positive mood which has spread throughout markets extending after an upbeat session in asia. This also comes after a strong post-NFP Wall Street session on Friday which did not seem to have a major impact on sentiment. Furthermore, news of an expected massive increase in traffic during Chinese New Year helped support investor confidence as the country has also been significantly reducing its restrictive policies related to covid-19. The FTSE100 is still hovering at the highest level in several years after gaining over 3% since the start of 2023 and despite a slight pullback at the start of this week, positive general sentiment may be able to sustain the upward move. However, it will be important to keep an eye on any impactful geopolitical developments along with central banker speeches, as a major unexpected event may derail this performance and lead to a continuation of the pullback. Oil prices boosted by potential increase in China demand Oil prices also started the new week on a positive note with Brent and WTI trading almost 3% higher on the day as the removal of significant restrictions in China along with a major reopening appear to be the main causes of this move. Starting from January 8, 2023 China no longer requires people arriving in the country to undergo a quarantine with negative Covid test results being enough to enter the country now. Moreover, Chinese authorities expect traffic during the upcoming Chinese New Year holiday to double from 2022 levels and after several years of serious limitations placed on the world's second largest economy. While it remains to be seen if this upward move will continue, these are clearly positive signs when it comes to the demand side of the equation and without a move from the supply side we could see prices potentially test nearby resistance areas. Read next: Euro could perform better-than-expected thanks to less severe energy crisis| FXMAG.COM Gold reaches 8 month high As the US dollar continues to show signs of weakness, with the USD index consolidating at the lowest levels since mid 2022, we have seen a noticeable strengthening of Gold with the price reaching an 8 month high as it hovers in the $1873 area following a 2% increase from the end of last week. It appears that this upward move also coincides with the positive sentiment seen across stock markets, as a main driver for that also seems to be a key focus on central bank policy and in particular the Federal Reserve, who may be approaching the end of its hawkish policy goals this year. Much is still uncertain but a weaker dolar along with declining US treasury bond yields may sustain the price increase of the previous metal while on the other hand, the risk-on moods seen across markets may limit a further upside in the near future. Naturally, this situation could change given the potential volatility.

The level of $80 could play an important role in determining whether the upward move continues or if WTI will encounter resistance and pullback once again   While the situation on the oil market has been quite uncertain as of late, particularly after the start of the Russia-Ukraine conflict, prospects of slowing demand resulting from economic downturn have been weighing increasingly on the price of this key commodity. Furthermore, the ongoing zero-covid China policy has significantly impacted demand prospects in the world's second biggest economy as lockdowns and industrial shutdowns have reduced the need for transportation and impacted shipping routes. Despite this, there is still one last OPEC+ decision left for 2022 and while it is unlikely the group will decide to adjust production, any notable shift in production quotas could have an effect on prices and bring an increase in volatility as we head towards the end of the year. The level of $80 could play an important role in determining whether the upward move continues or if WTI will encounter resistance and pullback once again.  This week's prints stand for the last data pack ahead of December Fed decision, supposing they came as a surprise would Fed go for a 75bp rate?   This week's highly anticipated data pack may play an important role in the final FED decision of 2022 as the central bank continues its fight against inflation while attempting to not cause a demand shock. Consumers remain under extreme pressure as prices rise across the board while rising commodity prices add to the problem and as the central bank's hawkish policy continues to constrain demand. The US central bank has shown a willingness to adjust its policy according to the data and this time could be similar as many begin to speculate as to when it will begin to reverse its policy while others wonder if the target rate will be adjusted further. In either case, the FED might be running out of ammo when it comes to tackling inflation and may choose a more cautious approach in order to ensure that it is mitigated in a sustainable manner. Read next: Steen Jakobsen: ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy| FXMAG.COM   This NFP report may also have an important role when it comes to the strength of the US Dollar as the greenback continues to be under pressure after a period where it dominated all other currencies   In addition to playing a key part in the inflation discussion, this NFP report may also have an important role when it comes to the strength of the US Dollar as the greenback continues to be under pressure after a period where it dominated all other currencies. The USD Index has been dropping for several weeks and while it may be unlikely that we see a significant rebound, the FED's decision may lead to a change in sentiment as we head into 2023. Furthermore, the USDIDX is testing the 200 SMA on the daily chart after trading in the reaction area around 106 points which may act as a support if it manages to hold. As more central banks continue to catch up with the FED's policy, we could be seeing a shift in the balance of power in the currency market away from the US dollar which has reigned over others in recent times.  

UK Retail sales show signs of improvement Retail sales in the UK rose by 0.6% in October compared to the expected 0.5% increase and previous 1.5% decline as British consumers managed to recover slightly despite rising inflation and the ongoing cost of living crisis. While this may appear to be a positive sign, there is still a long way to go before the economic picture begins to look brighter, particularly after yesterday's statement from Chancellor Jeremy Hunt referring to a recession. The pound is starting Friday's session attempting to hold onto some gains with GBPUSD pair testing the 1.19 area after pulling back to 1.175 yesterday. Meanwhile, the FTSE100 remains in the 7370 points area and it remains to be seen if it will be able to extend the upward move or fall further as investors continue to be uncertain. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM Twitter saga continues as offices close  Twitter's turbulent story continues after Elon Musk's company just announced the closing of its offices effective immediately until next week. The decision came as a surprise to many, including the employees who were told to comply with company policy. This adds further uncertainty and skepticism as to how the new owner intends to transform the business that took months to acquire while continuing to be a controversial figure. While Twitter stock is no longer available on the market, this is certainly an interesting situation as it could have ramifications and effects on the market as a whole with many holding varying opinions on the matter. In either case, it seems that Elon Musk is willing to take chances and act in unexpected ways if it means achieving his vision for Twitter even if it costs him employees.

Crypto markets attempt to recover despite widespread panic   The panic surrounding the crypto market continues this week after further developments regarding the FTX situation led to a widespread uncertainty involving the whole sector with many now questioning the safety of other major exchanges and defi protocols. Many large institutions rushed to reassure their customers, investors and market as a whole of their financial positions after major doubts emerged following the FTX collapse. Understandably, the Crypto fear and greed index is signaling levels of extreme fear as a large outflux of coins and cash from exchanges is threatening the stability of the ecosystem even further. Major price swings, spiky volatility and projects approaching collapse are all factors causing an outflow of capital from the ecosystem as the overall market cap hovers around $844 billion while major crypto currencies like Bitcoin and Ethereum attempt to hold above their key supports. While there is a high potential for unexpected developments and high volatility, some investors may take the fact that BTC and ETH stabilized slightly as a reassuring sign, at least in the short term. On the other hand, confidence in the crypto industry is likely hovering around historic lows as many who may have been supporters have begun to doubt their conviction as they see companies that may have seemed too big to fail crumble almost overnight leaving investors and customers to deal with the aftermath.    Pound pulls back from highest level since August   The pound has managed to pull off an impressive recovery since the beginning of November with the GBPUSD pair rising over 6% and reaching a high of 1.185, a level not seen since the end of August. This came as the USD started to retreat following macroeconomic reports supporting a slightly less hawkish approach by the FED and as the recently appointed British PM attempted to calm investor sentiment after his predecessor. Today we can see a fairly balanced situation in the FX market with both USD and GBP performing strongly and with the pair pulling back slightly as it trades around 1.177. Many will be focused on the G20 taking place this week as progress on the geopolitical front may also help with improving sentiment while Sunak remains under pressure with regards to taxes, cuts and migrants. From a technical perspective, the GBPUSD pair is trading at an interesting price reaction area after encountering resistance and pulling back almost 1% and breaking below the 21SMA on the hourly chart. As the sentiment surrounding the pound remains uncertain, any major developments may cause large volatility spikes that could cause a breakout from the short term trading range.

Pound Sterling gains as Sunak looks to lead conservative party    Since trading opened in foreign exchange markets last night, we've seen a warm response amongst investors to news that Boris Johnson has pulled out of the running to return as UK Prime Minister. Certainly there was some trepidation in the markets that Boris could return as fiscally he is not seen as highly competent but perhaps more troubling would have been the fact any new premiership under Johnson would be surrounded by political potholes every week, bringing more instability. Many market participants are reacting positively to the potential of Rishi Sunak becoming the next UK prime minister after several days of uncertainty while members of the conservative party attempted to determine their choices. The Pound started the week trading higher as many see the new potential PM as a source of some stability, particularly when compared to the chaotic term served by the Truss government which saw massive volatility across markets which also led to a large drop in the pound. Furthermore, many see Sunak as the final chance for the conservative party as he has managed to maintain some credibility and is now set to make an announcement during the day which may also lead to a market reaction as stocks struggle to extend the upward move and have been pulling back.  Oil prices start the week lower as uncertainty persists   Oil prices have struggled to break out of their recent sideways trading range which has seen WTI prices hover in the $83.60 area while Brent continues to have trouble breaking through and remaining above the $90 level. Rising USD strength along with global demand uncertainty continue to pressure commodity prices along with riskier assets with stock markets also starting the week lower. From a technical point of view, the price of oil remains in a very interesting spot as both Brent and WTI are testing key support levels which managed to halt previous strong downward moves despite the price being below the longer term SMA's. Furthermore, the situation could continue to be volatile which could lead to another attempt to rebound from the current levels if sentiment and demand forecasts manage to improve despite the ongoing economic slowdown and troubling macroeconomic data. In either case, a breakout in either direction could set the tone for the market in the short term in this time of increased volatility.

Indices trading higher as US earnings season ramps up European indices started the day with upbeat moods and are trading higher following the positive performance by US and Asian markets which saw Nasdaq reach the highest level in ten days after breaking through a previous resistance area. Despite this, the situation remains quite volatile and we could see a major shift in moods as investors follow macroeconomic data and major Wall Street earnings reports with Netflix expected to publish their report today. Furthermore, investors continue to monitor the political and economic turbulence surrounding the UK which saw the new chancellor announce a U-turn on the majority of measures previously announced by this newly formed government in an attempt to stabilize currency and stock markets. Despite a lack of major economic data today, investors will certainly have a lot to keep an eye on as the geopolitical and economic situations continue to develop and as uncertainty continues to dominate the market.  Read next: Commotion Around Ethereum. "Most Favorable Crypto Economies" - Germany, Switzerland And Australia| FXMAG.COM Commodities remain stuck in consolidation range as dollar attempts to rebound While the recent weakness seen from the US dollar has led to a recovery in commodity prices and cryptocurrencies, it appears that today might see some unexpected movements across markets while the greenback is attempting to rebound from the lowest levels in around ten days as general market moods showed signs of improvement. Oil prices remain stuck in their recent trading range and while they appear to be slightly pulling back at the beginning of the European session, there is still room for a potential recovery as they test an important support which has managed to hold the price for the last several days and as concerns about supply remain. Meanwhile, gold prices are also struggling to initiate a significant upward move as they continue to hover in the $1650 area after retreating slightly and as they await a catalyst for significant momentum shift. The situation appears to be similar when it comes to cryptocurrencies with Bitcoin still hovering under the key $20,000 level as it trades about 2,70% below that while Ethereum trades around the $1320 mark after testing the highest level since the end of last week. It seems clear that commodity prices continue to be highly related to the US dollar's performance and any major shakeup in sentiment towards the greenback may lead to a cascading effect across asset classes. Read next: JP Morgan Net Income Over $9B | Kanye West Is Buying Parler| FXMAG.COM

Eyes on the Sterling Pound as new chancellor set to make announcement The pound remains in the spotlight this week as investors await today's speech from the new chancellor Jeremy Hunt where is expected to announce the new budget and tax plans after the recent plans caused a noticeable drop in confidence towards the currency. While there may be a possibility for some surprises in today's statement, expectations remain for a U-turn on several measures previously announced in an attempt to reassure markets about the financial stability of the economy. The pound started the day trading higher reaching 1,125 against the US dollar while the UK FTSE index pulled back slightly after an initial upward move which saw it briefly break above 6900 points and any unpredicted announcement could cause a significant reaction across asset classes. Read next: Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings? | FXMAG.COM Oil prices attempt to rebound at the start of the week Despite the announcement of a further cut to OPEC+ production in the most recent meeting, oil prices failed to gain momentum and after a brief attempted recovery remained stuck in the previous consolidation area. WTI prices are down around 1,50% after a short upward move this morning which was facilitated by a temporary weakening of the US dollar, which has been putting pressure on commodity prices in recent times. However, the situation appears to be changing as the dollar has once again started to garner some strength and is once again pressuring other currencies as well as commodities like oil. Prices could continue to be volatile in the near future as general economic uncertainty and investor sentiment continue to play a key role in price action while investors await macroeconomic reports and central banker speeches during the week, along with earnings reports from major Wall Street companies. Oil WTI prices are hovering in an interesting technical position as they test a short term support area around $84,50, which managed to limit the most recent downward movement. If this area is broken, it may lead to the start of a bigger move which may result in further speculation regarding the upcoming production targets set by OPEC+.

In this article: British Pound and the UK Crude Oil Sterling rebounds after change in government tax plans GBP is one of top performing G10 currencies after the BBC reported that the Truss government may drop the idea of tax cut for high earners as a result of party insider backlash. Tory MPs rebelled against UK Prime Minister Truss, threatening they wouldn't vote on a planned cut to 45% tax rate until sources of financing are presented in the next budget (November 23, 2022). However, the report from the BBC hints that the whole idea of a tax cut for high earners may be dropped. The u turn had been inevitable given the market reaction but there's every likelihood this will buy the UK government time politically but not necessarily from investors. The 45p tax cut has taken around £2billion off extra borrowing. That's it. The UK government is facing extra borrowing of closer to £150bn and at higher interest rates than in the past decade. GBPUSD pair is trading at a 2-week high and above levels from the 'mini-budget' announcement that triggered a slump in GBP and UK bonds. Until investors get clarity in the scale of borrowing needed and costs, which means a detailed OBR forecast, the pound Sterling volatility will likely continue.  Oil starts the week higher as traders await OPEC production cut Oil started the week positively by posting noticeable gains today with both Brent and WTI trading around 4% higher after several weeks of uncertainty and volatility. The upward move was probably triggered by media reports suggesting that OPEC+ may decide to implement a significant output cut during the meeting this week (October 5, 2022). Many in the media believe the cut would involve a 1 million barrel reduction in daily production with some even suggesting that a 1.5 million barrel cut may be on the table. OIL.WTI broke through a downward trendline and climbed back above the $81.00-81.60 resistance area despite being in a downward trend for over a month. After a successful retest of the zone, a strong upward impulse was launched this morning with the price reaching $83 per barrel for the first time in more than a week. While the situation remains volatile, traders will be anxiously awaiting this week's OPEC+ decision as a surprise in the decision could cause a significant move on the oil market while if the group decides to act in line with expectations we could be seeing a continuation of the recovery.

How does Celsius filing for chapter 11 bankruptcy affect the crypto space? Today's filing follows the controversial decision by Celsius, a major cryptocurrency lender, last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business. The troubled crypto lender said the purpose for the voluntary action is to enable a "comprehensive restructuring plan" that benefits all "stakeholders." However, this decision has brought even more doubts to the crypto space after the major disaster involving Terra Luna just recently shook investor confidence in the sector. As the Celcius situation develops, it will be essential to see how the company manages to resolve some key issues that are deeply rooted in its business model and if it can restore faith in the crypto lending side of the industry which for the time being has appeared to be promising but highly unstable and unreliable in times of excessive volatility.  Investors await major bank report as US earning season starts After what has been a troubling few months for stock markets and economies, investors are anticipating the start of the US earning season which as always kicks off with major financial institutions and banks. Today, while inflation remains a key topic, particularly after yesterday's CPI reading surprised by showing an increase of 9,1% and prompting increased expectations for a 100bp rate increase by the FED, stock investors will be looking at JPMorgan and Morgan Stanley's earning reports. Financial institution reports are particularly interesting because they can give a general overview of the health of an economy and their projections can sometimes set the tone for the coming trading sessions, especially as investors continue to be uncertain about the prospects of recession and upcoming central bank decisions. Both reports will be released before the US market open and could play an important role in how today's session goes after yesterday saw indices and risk assets take a hit following the surprise inflation reading.

EURUSD is in the center of attention today since after a months-long drop, the euro is nearing parity with the US dollar. It was almost 20 years ago when the main currency pair traded at 1.00 for the last time. What are the reasons for the euro underperformance? On one hand, implications of the Russia-Ukraine war play a big role. Energy prices   Energy prices in Europe spiked as gas flows were being limited and now there is a real risk of complete halt to gas supply from Russia as tensions continue to escalate and after the "temporary" shutdown of Nordstream 1. This would most likely lead to a recession on the continent, especially in gas-dependent countries like Germany. Another reason for the weak performance of the common currency is the European Central Bank, which has been very slow compared to other major central banks when it comes to policy tightening and is yet to deliver its first rate hike. Fed Meanwhile, the Fed embarked on an aggressive rate hike cycle in an attempt to contain rampant inflation, providing support for the US dollar, which is also benefiting from safe haven flows. As a result, EURUSD keeps moving lower. However, traders should expect some support around the 1.00 area due to the psychological nature of this level which could lead to some efforts from buyers.  

The main currency pair has dropped almost 1% today and reached the lowest level since December 2002 amid a significant boost in USD demand. The move not only pushed the pair below May's lows but also below lows from the turn of 2016 and 2017, meaning that EURUSD traded at the lowest level in almost 20 years. While the greenback strength is currently playing a role in the major move, as it trades higher against most currencies, the Euro continues to struggle as the ECB has been behind other central banks with its policies. There has been an increasing divergence between the ECB and the FED which has managed to aggressively increase interest rates lately in an effort to tackle inflation while its European counterpart has had to be more passive as it remains wary of the real dangers of slowing the economy in a time where the Russia-Ukraine conflict is causing a spike in energy prices and general inflation. The ECB is caught between a rock and a hard place as it needs to raise interest rates to tackle inflation and boost its currency while simultaneously supporting struggling economies which are just recovering after 2 years of pandemic related issues. A rate increase is expected by the ECB in the near future but it will be essential to see how the markets react to this week's ECB minutes which will be released on Thursday as it seems that general confidence in the single market currency continues to decline. 

Cryptocurrencies continue to crash as Bitcoin slipped below $25,000 and Ethereum broke important supports, dropping below the $1,300 level. Almost all altcoins are wiping out gains made in 2020 and continued in 202 as sentiment around cryptocurrencies was worsened on Friday by alarming data from the US economy (record low investor sentiment according to data from the University of Michigan and a higher than expected inflation reading). It is not very surprising to see such a strong downturn as we have noticed an increased correlation over the last few years between traditional stocks, which have also tanked recently, and the cryptocurrency market. Furhtermore, there appear to be some fundamental problems also as the Ethereum network struggles after Ethereum's developers announced on Friday another postponement of the transition to the long-awaited version 2.0 and thus also the date of the 'difficulty bomb' that investors are waiting for. At the same time, Bitcoin which is the largest of the cryptocurrencies, is currently fighting to remain above this year's lows as a fall below these levels may trigger a cascading effect of liquidations of hedging positions, which could potentially lead to a continuation of the downtrend. Despite this overall uncertainty in markets, investors will be keeping a close watch on this week's central bank decisions, particularly the FOMC, which could have significant impacts on the majority of asset classes, including cryptocurrencies. UK GDP figures disappoint UK GDP data for April was a noteworthy release as it showed a weaker-than-expected economic growth with GDP falling by 0.3% in April 2022, after a decline of 0.1% in March 2022; Production fell by 0.6% in April 2022, driven by a fall in manufacturing of 1.0% on the month, as businesses continue to report the impact of price increases and supply chain shortages. In addition, this is the first time that all main sectors have contributed negatively to a monthly GDP estimate since January 2021. As a result, we saw some noticeable pressure on GBP initially, while stocks extended the downward move brought by worsening overall market sentiment.

Following reports of rising temperatures across the US and the expectations for increased demand we have seen a surge in natural gas prices before they pulled back slightly. In addition to these reports, declining production, rising liquefied natural gas (LNG) exports and the forecast that upcoming hot weather is expected to cause energy consumption in the state of Texas for air conditioning to hit an all-time record high are all contributing to this increase. Meanwhile, the global situation surrounding the commodity is unstable as a result of the ongoing Russia-Ukraine conflict which greatly impacted supplies and is continuing to cause uncertainty across markets and which has caused prices to hover around a 13 year high of $9.5. Despite this, some significant volatility remains a possibility on this market in the near future as this time of year is generally considered to be a period of inventory build ahead of the winter season, when gas demand reaches its highest point.Bitcoin plunges over 7% and reaches key support area once againA strong negative sentiment can be spotted across cryptocurrency markets with both Bitcoin and Ethereum dropping over 6% and dragging other coins with them despite starting the week trading higher following a period of consolidation. The main crypto currency is once again trading below $30,000 after managing to rebound from the $29,000 support area, which has managed to halt downward moves several times in the past and which has been a strong zone over the course of this extended consolidation period. While general market sentiment appears to be slightly improving today and despite the price rebounding once again, it is difficult to exclude the potential for another drop below this key support level as the overall geopolitical situation continues to be unstable and as investors seek a more risk-off approach. On the other hand, the range for a rebound could see the price rise over 6% and once again test the previous resistance area of $31,500 which has limited the potential for a significant upward move and the start of a new upward trend. UK Services PMI paints negative picture Today’s Composite services PMI report showed the weakest service sector performance since February 2021 as rising inflation hit customer demand and as input cost and prices drove inflation to new record highs. Furthermore, the negative economic climate has led growth projections to fall to the lowest since October 2020 while business activity expansion eased for the second consecutive month. While the main concerns continue to be rising costs and a decrease in buying power, potential action from the BoE and government may alleviate this pressure slightly but may be unable to significantly impact the situation in the long term.

Terra Luna Crashes The recent crash of one of the most well known cryptocurrencies has added to the widespread panic that has been surrounding the risky asset class. The fall started while the company's stable coin, UST, was unable to maintain its parity with the USD and quickly tumbled as more investors opted to save whatever they had left and exit their positions. While Terra Luna is not the only crypto to be dropping significantly in the last few days, with the entire top 100 down around 30-50% and market cap falling to $1,19 Trillion, it is certainly one of the most prominent examples seen to date of a complete collapse. This event has deeply shaken investor confidence in the asset class and has even led to the most prominent stable coin , USDT losing its 1:1 ratio with the USD. As the situation continues to evolve it seems like this could be the beginning of a significant realignment in the crypto industry as investors either exit their positions or re-evaluate them in search of some sort of a safe haven amid a widespread crash. It is important to note though that the majority of risk-on assets have been deeply impacted by worsening global economic conditions and central bank policies so while this situation is not exclusive to crypto's it is certainly most prominent with them. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM UK GDP report disappoints and pressures GBP and FTSE100 The UK GDP report was released at 7:00 am BST and turned out to be a huge disappointment with the report showing a 0.8% QoQ expansion in Q1 2022 while the market expected an expansion of 1% QoQ. However, March's monthly GDP reading was the biggest disappointment with the monthly reading which was expected to show a 0.1% expansion from February levels and instead showing a 0.1% MoM contraction. March was the first full month since the beginning of the Russia-Ukraine conflict and could be seen as a potential sign of economic difficulties to come. Investors reacted negatively to this news with both the British Pound and FTSE100 taking a hit as the global sentiment continues to shift more towards risk-off   Furthermore, the Bank of England warned that tightening and current geopolitical developments are likely to push the UK economy into recession. Investors reacted negatively to this news with both the British Pound and FTSE100 taking a hit as the global sentiment continues to shift more towards risk-off. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co. 

Oil along with other risk assets is trading higher today as sentiment towards energy commodities and industrial metals improved slightly after declining over the last several days. However, it is important to note that the outlook for oil is still unclear as there are a number of contradicting factors impacting the price of the commodity. On one hand, there is still the risk of a total embargo on Russian oil by the West which is likely to exert an upward pressure on prices. Read next: What Is Chia Coin? - (XCH) - First New Nakamoto Coin Since Bitcoin Launch (2009) | FXMAG.COM Taking a look at the Brent oil chart, we can see that the price bounced off the $100.00 per barrel mark yesterday evening and... On the other hand, the pandemic situation in China and the country's response to it is creating the risk of an economic slowdown in the world's second largest economy. As China is a major consumer and importer of oil and industrial metals, lower demand from this country could have a visible impact on oil prices as well as other commodities and lead to a domino effect across global markets. Taking a look at the Brent oil chart, we can see that the price bounced off the $100.00 per barrel mark yesterday evening and managed to climb to the $103 resistance zone before pulling back slightly today and heading once again towards the $100. A similar situation can be noticed when looking at the Oil.WTI chart with a pullback from the $100 area and a current test of the $97,77 reaction zone. Read next: A Reward For A Transaction!? What Is Kishu Inu Coin? ($KISHU) Let's Take A Look At This New Altcoin  Investors focus on today’s mega cap earnings after Twitter accepts Elon Musk takeover offer After a tense round of negotiations, Twitter accepted Elon Musk's offer and will be bought for $54.20 per share. The company will become private once the deal is completed after he initially became the largest shareholder by buying around 9% of shares. The market reacted favorably to this news with the stock price gaining 5.6% yesterday despite much controversy surrounding the issue. While the situation remains uncertain, it is likely that the effects of this news will have ripple effects across stock markets. However, investors will also be switching their attention to today's mega cap earnings reports in what will be a week filled with high level earnings. Microsoft and Alphabet are due to report their earnings today after market close which could have a noticeable impact on stock markets, particularly the S&P 500 and Nasdaq 100, both of which have been trying to halt a series of losses.  

Market moods have deteriorated as the Covid situation in China is not improving and the media is hinting that Beijing could be next in line for a lockdown after Shanghai and several other major cities. Negative moods could be noticed during the Asian session today with Nikkei dropping 1.7%, Kospi 1.4% and indices from China falling up to 3% lower and they extended into the start of the European session with the majority of european indices trading lower despite some reassurance arrived following Emmanuel Macron’s victory in the French elections. While there is a lack of significant data releases today, investors and traders will be keeping an eye on developments surrounding the situation as risk-off moods dominate the markets   Read next (by XTB): Follow EUR/USD, EUR To GBP And The Rest Of EUR Pairs - Inflation In Euro Area Continues To Worry Investors After Reaching New High | FXMAG.COM     Furthermore, as China is the second largest economy in the world, the situation also has a big impact on commodity markets with oil and industrial metals dropping significantly today (WTI dropped 2.8% and fell below $99 per barrel). While there is a lack of significant data releases today, investors and traders will be keeping an eye on developments surrounding the situation as risk-off moods dominate the markets. In addition, this will be a key week for the Wall street earning season with the release of several mega cap earnings including Microsoft, Apple, Alphabet, Amazon and Twitter which could certainly have a noticeable impact on sentiment.   Read next (by XTB): (TSLA) Tesla To Beat A Record!? (NFLX) Netflix Earnings Has Moved The Markets, But Elon Musk's Company Surely Has Something Up Its Slevee! | FXMAG.COM    

Today's Euro area inflation report continued to show the alarming rate of increase in prices mainly driven from energy prices and services. The euro area annual inflation rate was 7.4% in March 2022, up from 5.9% in February and noticeably higher than when compared to a year earlier (1.3%). Stagflation scenario? While we have already seen a slight change in tone from some members of the ECB, hinting at rate hikes sooner than previously expected, today's report could further incentivize the bank to act in an attempt to avoid the increasingly likely stagflation scenario. It will be important to keep an eye on today’s speech from the ECB head Lagarde after another member of the ECB , Kazaks, stated they believe asset purchases may be terminated before Q3 2022 - much earlier than it was expected. Gold price returns to key support area ahead of central banker speeches The price of gold has seen a noticeable pullback after reaching a high of $1958 yesterday while stock markets started the day trading higher following better than expected earnings from Tesla. The precious metal has once again returned to a previous support area of and could continue to see an increase in volatility as investors await today's comments from the heads of BoE and ECB. While the ECB appears to be changing its opinion slightly on the possibility of adjusting its fiscal and monetary policy to contend with record inflation, it remains to be seen how and if Lagarde will downplay the situation in order to calm the markets. In any case, gold might see a reaction to the $1945 area once again after the price managed to rebound several times in the past.  

Netflix plunged over 20% in the after-hours trading, following the release of Q1 2022 earnings report. Subscriber base shrank by 200,000, marking the first drop in overall users in more than a decade. The drop was led by a loss of 700 thousand subscribers from Russia as the company suspended services in the country and as competition in the streaming sector continues to become more challenging. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun US indices have been increasingly reactive to this earning season Today, investors will focus on the highly anticipated earnings release form Tesla, which managed to mostly mitigate the impact of supply shortages and rising inflation thus far while expanding its production facilities. While growing concerns relating to covid-19 related lockdowns in China persist, investors will be keeping a close eye on Q1 results along with the company's outlook for the rest of 2022 after Elon Musk attracted additional attention after offering to buy Twitter at a significant premium. US indices have been increasingly reactive to this earning season after many investors have started to look past the initial shock caused by the Russia-Ukraine conflict and today could be no exception. Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM Oil prices attempt to recover after 6% drop Oil is trading higher after prices dropped significantly following the long easter weekend. WTI broke above $103 per barrel while Brent jumped above $108 at the start of today's session but appear to remain constrained in a narrow range for the time being. Traders await today's EIA inventory report which is expected to show a 2.5 million barrel increase after yesterday's API report defied expectations by indicating a 4.5 million barrel drop. While rising demand concerns caused by the increase in covid lockdowns in China continue to pressure the price, the uncertain situation relating to the potential import ban of Russian energy from Europe remains a key topic to watch and may cause noticeable volatility if things were to change suddenly.  

Summary: Investors will be keeping an eye on the monetary policy announcement from the European Central Bank at 12:45 pm BST US retail sales report for March is released at 1:30 pm BST Investors await major events ahead of long weekend There are two major market events scheduled for today ahead of the long Easter weekend. investors will be keeping an eye on the monetary policy announcement from the European Central Bank at 12:45 pm BST as well as a US retail sales report for March at 1:30 pm BST both of which could be volatility triggers for EURUSD and stock markets. When it comes to the European Central Bank monetary policy decision, nobody expects the level of interest rates to be changed as the ongoing Russia-Ukraine conflict has caused a significant disparity in the approach between the ECB and the FED. However, there is no consensus when it comes to asset purchases since some banks expect the ECB to announce the end of APP by the end of May today and start preparing markets for a potential rate hike as soon as June while others do not expect such an announcement ahead of the June meeting as this will be when the updated set of economic forecasts is released. In either today we could be seeing some significant moves in markets as a result of these events along with some portfolio rebalancing as investors and traders attempt to limit their risk exposure ahead of the long weekend. US earning season continues with major financial institutions After yesterday’s lackluster results from Blackrock and JP Morgan, investors are looking at today's earnings reports from other major financial institutions such as Citigroup, Morgan Stanley and Goldman Sachs for some reassurance. While most expect results for the first quarter of 2022 to be worse than a year ago, any unexpected negative surprises could worsen sentiment even further as the general economic climate of uncertainty and record inflation continues to pressure consumers and producers. On the other hand, upbeat results could further boost the ongoing rebound of stock markets which started the day quite mixed ahead of the long easter weekend and as many also await today’s US unemployment figures along with the retail sales report at 13:30 BST which will be the first report to capture the whole impact of the Russia-Ukraine conflict.

UK Consumer Prices Index continues to rise as consumers worry Today’s EIA inventory report to determine if there could be any short term shortages or price changes JP Morgan and Blackrock will be the key financial companies reporting their Q1 2022 results today The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 6.2% in the 12 months to March 2022, up from 5.5% in February with the largest upward contributions to the annual CPIH inflation rate in March 2022 coming from housing and household services. Today's figures continue to add pressure on consumers which have already reduced their spending as a result of the ongoing rise in prices. Like other recent data, this could further incentivize the Bank of England to take further action in order to contain price growth. Related article: ECB To Shock Markets In The Following Week!? US Dollar Rate Under Pressure As Well! US earning season begins as stock markets remain uncertain While stock markets have been increasingly uncertain lately as a result of rising covid cases in China which led to several lockdowns and prospects of a slowdown in demand in the world's second economy, the ongoing Russia-Ukraine conflict and prospects of further fiscal and monetary policy changes by central banks around the world, investors will once again be focusing on the highly anticipated Wall Street earning season which is due to start as usual with large financial institutions. JP Morgan and Blackrock will be the key financial companies reporting their Q1 2022 results today and what investors see in these few days could set the tone for what's to come as the post-pandemic economic recovery continues after the FED has expressed its willingness to be aggressive and change rates consistently throughout the year. Any major disappointments could further add to the negative sentiment seen in the market today and may hinder prospects of a rebound in the short term. On the other hand, better than expected results could prove to be a catalyst for a recovery as investors look past the general uncertainty seen across markets. Oil.WTI returns above $100 ahead of EIA report While prospects of a fall in Chinese demand impacted oil prices significantly in the first part of the week, we are currently seeing a noticeable rebound in prices with WTI up 1.5% and back above the key $100 mark. Much of the uncertainty surrounding Russian supplies remains but many have already priced some of the potential impacts of further sanction or bans as countries continue to look for alternative sources. Despite this increase in prices, the situation remains unclear and it will be essential to keep an eye on this area as WTI has reacted noticeably to it in recent times and could remain volatile as traders also await today’s EIA inventory report to determine if there could be any short term shortages or price changes.  

Gold prices have continued to rise at the start of the week after hovering in the $1940 area as covid cases continue to increase in the Shanghai region despite the lockdown announced by the Chinese government. While there is a lack of major macroeconomic reports today, many investors will be keeping an eye on the geopolitical situation and the ongoing Russia-Ukraine conflict which continues to cause uncertainty along with speeches from several FED members in the second part of the day. Furthermore, the US earnings season starts this week with major financial institutions being the first to report their results ahead of the Easter holiday after an unpredictable first quarter of 2022 which saw many impactful events across the world with oil and gold prices nearing their all time highs. Today, gold is trading around $1960 and could continue to be volatile throughout the week as it remains to be seen if it will be able to extend the upward move or if it will pullback once again.   UK GDP grows while production worries persist UK Gross domestic product grew by 0.1% in February 2022, following a 0.8% growth in January 2022 with services growing by 0.2% thanks to a noticeable increase for services in February 2022 which was mainly driven by tourism-related industries and which has now brought real GDP to 1.5% above its pre-coronavirus level. This is a good sign for the economy but was slightly offset by production, which fell by 0.6% and construction, which fell by 0.1%. While rising inflation continues to be a significant risk, impacting both businesses and consumers significantly, today's data could provide another incentive to the BOE to take further action after it already implemented several rate increases.

US indices finished yesterday's trading lower following the hawkish FOMC minutes release with the S&P 500 dropping 0.97%, Dow Jones falling 0.42% and Nasdaq pulling back 2.22%. The document showed that many Fed members were opting for a 50 basis point rate hike in March and signaled that QT is likely to start in May with monthly limits for reduction at $60 billion for Treasuries and $35 billion for mortgage-backed securities. A strong hawkish message sent by FOMC minutes exerted some pressure on indices with the tech sector, which is viewed to be the most vulnerable to changes in the level of rates, took a significant hit. While central banks have been at the center of attention in recent weeks, the ongoing Russia-Ukraine conflict continues to be a critical situation which could cause some unexpected moves across markets. On the other hand, investors await today’s ECB minutes which may cause some short term volatility across european stocks and indices as the bank attempts to mitigate the risks of the ongoing conflict. UK house prices reach new record high The Halifax HPI index continued to highlight the recent trend of rising prices across sectors with another increase in house prices and monthly house price growth of 1.4%, the biggest increase for six months. The average property price reached another new record high of £282,753 and after two years from the first lockdown, house prices have now risen by £43,577. While prices in other sectors like energy and food have been consistently increasing, the housing market may begin to suffer a slowdown in demand if the current rate of increase continues as more consumers start to struggle to enter the market. On the other hand, demand at current levels remains high and could sustain a continuation of this trend despite measures by the central bank designed to mitigate widespread inflation.

Despite some optimism seen across markets resulting from the potential of peace talks between Russia and Ukraine, the oil market remains one of the most volatile with prices pulling back slightly after once again rising almost 8% at the start of the week and returning to a previous trading range. Brent pulled back after reaching a high of $115 and is back around $110 today while WTI remains close by as it hovers around $108 as traders await today's API inventory report which is expected to show a 1 million barrel draw. While these reports have not had the usual impact, as the conflict remains the primary source of volatility, it will still be important to see how US inventories are managing while gas prices across the nation continue to reach new highs and add further pressure on the average consumer while driving general inflation to increasingly concerning levels. While an unexpected increase in oil stocks could cause some short term relief, the prospect of several supply deals such as the one with Venezuela and Iran are what could provide some much needed reassurance for the markets as they combat the prospect of supply shortages. Crypto markets rebound as bitcoin tests major resistance While the crypto market has been mostly trading sideways since the sudden increase in demand seen at the beginning of the conflict, today we are seeing a rebound of the major currencies which is driving positive sentiment across the whole asset class. Bitcoin has broken through a key resistance of $42,000 while Ethereum has managed to return above the $3000 level and as has happened in the past, this sentiment was echoed across other smaller currencies as well with the total market cap now approaching $2 Trillion once again. Despite this optimism, as we have previously seen, any moves on this market could be short lived but could drive demand by retail investors while institutions continue to add to their positions in anticipation of mass adoption which has continued to increase throughout these price fluctuations.

European stock markets started the week trading higher following some positive news surrounding the talks between Russia and Ukraine as officials announced that some progress was being made and potential compromises were on the table. This positive sentiment carried over despite news of a major lockdown in a city in China caused by a surge in covid-19 cases over the weekend and as a meeting is expected today in Rome between US and Chinese officials to discuss the conflict. The German Dax is up around 3% and has managed to briefly break through a resistance area after sentiment was significantly impacted by the rising tension which threatened to severely disrupt European economies. Meanwhile the UK’s FTSE100 is also gaining as PM Boris Johnson is due to travel to Saudi Arabia to meet prince Mohammed bin Salman to discuss a potential increase in oil supplies to offset the foregone Russian supplies. While there is a lack of data releases today, markets remain extremely susceptible to volatility as any major news relating to the conflict could trigger major moves which would echo across asset classes and trigger investor panic. Oil and Gold retreat as hopes for peace talks spark optimism After the massive rally which took oil and gold prices near their all time highs, we have seen the situation improve slightly over the last few days as markets began to receive some encouraging news regarding the prospect for a potential deal between the russians and ukranians. Tensions and rising supply concerns took the prices of those commodities to the highest levels in years as investors looked for a safe haven amid rising uncertainty and as they anticipated significant disruption in the oil market due to the unavailability of Russian supplies. However, at the start of the week the situation appears to be improving even more with oil prices back towards $100 a barrel while gold dropped over $100 from its recent high and is trading around $1960. While this situation may not last very long, as any major event could trigger a spike in both once again, it does provide some encouraging signs that if the situation continues to show signs of resolution markets could adjust quite rapidly.

European stock markets started the day trading higher following a mixed Asian session which saw Nikkei drop 0.3% while S&P/ASX 200 gained 1% and as indices from China plunged and finished 1.7-5.0% lower. Meanwhile, the United States announced a total ban on Russian oil, natural gas and coal with the United Kingdom announcing that it will phase out Russian oil in the coming months. In response, Putin signed a decree banning exports of certain commodities from Russia and investors await the announcement within days to determine the potential impact on markets. Furthemore, a growing number of companies have announced their withdrawal from or suspension of services in Russia with McDonald's, Starbucks and Coca-Cola being the latest to make such announcements and isolating the country economically even more. While this rebound may encourage investors and increase confidence in the market, it is essential to keep in mind that any major news related to the ongoing conflict could have wide repercussions and may shake the extremely fragile market sentiment. Crypto markets rebound as sentiment improves ahead of Biden executive orderCryptocurrencies appeared to show signs of strength in the Asian session which have continued at the start of the European trading session with Bitcoin gaining over 8% and trading around $42,000, the highest level in a week. The crypto market cap is up over 6% today and has returned to around $1.85 Trillion after several days of uncertainty which followed the surge in demand seen at the beginning of the Russia-Ukraine conflict that was sparked by significant interest from people of that region as they attempted to seek refuge from the collapsing economy and currency. As has been the case in the past, Bitcoin and Ethereum appear to be dragging the rest of the market with the majority of alt-coins also adding to their gains despite generally lagging slightly behind the majors. Furthermore, US president Biden is expected to make an announcement today regarding an executive order on cryptocurrencies that may pave the way for a broader adoption of digital assets and boost investor confidence in the relatively new asset class. While details of this announcement remain unclear, any sign of regulation or mainstream adoption could prove to be a catalyst for a major move across the crypto markets thanks to the influx of new money of both retail and institutional investors.

The Russian economy continues to be hit by increasing global sanctions as the conflict escalates between Russia and Ukraine and after recent news regarding a potential ban of russian imports from Europe and America has severely impacted the situation as the country continues to be more economically isolated and may have to search for alternative export destinations. While this news has led oil prices to reach the highest level since 2008 with brent spot approaching $140 per barrel, the russian economy continues to suffer from sanctions and with no end to the conflict in sight, we could see a continuation of this trend despite the talks of a nearing agreement on the Iran nuclear deal as well as potential for the US to revoke sanctions on Venezuela in an attempt to stabilize the energy market. While there seems to be a way to compensate for the Russian oil supply down the line, the situation remains dire for the time being and could lead to prices testing even higher levels as uncertainty across markets continues to grow. Halifax HPI shows fastest increase since 2007 House prices rose at the fastest annual pace since 2007 and reached a new record high according to today’s Halifax HPI report with monthly house price growth rising to +0.5% following a slower start to the year. While the annual rate of growth increased by +10.8% and reached the strongest level since June 2007, the impact on household finances is still expected to weigh on the market this year as rising inflation and increased costs could undermine the post pandemic economic recovery and slow down the housing market significantly as demand becomes severely impacted.

While news of the Russia-Ukraine conflict has been in focus for the majority of the last two weeks, investors received alarming news of a fire at Europe’s largest nuclear power plant which sparked another wave of panic across markets. Risk-off assets such as gold and FX benefited from this while traditionally riskier investments such as stocks saw a significant pullback with the Asian session seeing significant declines as Nikkei dropped 2.2%, S&P/ASX 200 moved almost 0.6% lower and Kospi declined 1.1%. Today’s final trading session in Europe started in a similar way, with the German Dax reaching the lowest level since December 2021 and testing a support area below 13200 points before rebounding slightly as it appears that no damage was sustained by the reactor at the nuclear facility in Ukraine. As investors await today’s key NFP report from the US, which is traditionally one of the most important and followed pieces of macroeconomic data, it appears that focus remains on the escalating conflict which has shaken markets and could continue to do so with a rush away from riskier assets ahead of the weekend in an attempt to weather out any major events which may occur while markets are closed. Gold tests key resistance as risk-off moods dominate markets While we have seen a noticeable increase in volatility across markets, the situation escalated following the news of a fire in Europe’s largest nuclear power plant located in Ukraine which brought significant uncertainty and panic. Stock markets started the day trading lower and reaching the lowest level in several months while traditional safe haven assets appeared to be benefiting from this risk-off sentiment as gold returned to its recently tested high of $1945 after a brief pullback in the last few days. The precious metal remains favored by investors who are attempting to limit their risk exposure as we head into the weekend and ahead of today’s key NFP report from the US, which is expected to show an increase of 440,000 jobs. While Gold was unable recently to break through the resistance area of $1945, any further escalation or major news from the conflict could act as a catalyst and spark a surge of interest for safe haven assets, particularly in the last trading session of the week. UK construction PMI shows highest increase in eight months Today’s construction PMI indicated the fastest rise in construction output for eight months thanks to a marked and accelerated rise in housing activity and with input cost inflation dropping to an 11-month low. Despite news relating to the Russia-Ukraine war remaining in focus, these figures could reassure the Bank of England and lead it to take further action in the near future as consumer confidence shows signs of improvement and as several sectors in the economy continue to recover.

US indices are set to start today’s session lower as the conflict in Ukraine threatens supply chains and drives commodity prices higher. During yesterday’s trading session, the S&P 500 dropped 1.55%, Dow Jones moved 1.76% lower and Nasdaq declined 1.59% while the Russell 2000 dropped 1.93%. Intense shelling of Kharkiv was reported overnight and Russian attacks on residential areas and civilian buildings are becoming more frequent while the west continues to evaluate an escalation of sanctions, some of which have led to Sberbank, Russia's largest bank, informing that it will be shutting its European market business as it is no longer able to supply liquidity to its units in Europe. Despite some important data expected from the US, including the ADP employment report as well as the FED chair Powell testifying in congress, investors remain focused on further headlines and developments from the ongoing conflict in eastern europe which is sending shockwaves across markets. While negotiations are set to continue between the opposing forces, it remains to be seen if these will manage to and provide some relief Oil prices reach record levels despite strategic petroleum reserve releaseConcerns over possible disruptions on the oil market are sending Brent prices to the sky as WTI reached the highest level since 2013. Brent OIL is trading almost 60% year-to-date higher and it may not be over as the geopolitical tensions escalate and more companies continue to exit their shares in Russian energy companies with some of the most notable being BP and Shell. The release of strategic petroleum reserve release did little to ease upward pressure and OPEC+ is unlikely to decide on a bigger than 400,000 barrel hike today while traders also await the EIA petroleum report from the US, which is set to show an increase of 2.8 MB, after yesterday's API report indicated a 6.1 MB inventory draw. Unless the geopolitical situation begins to ease, or there are some major developments which would allow a noticeable increase in supply to reach the markets from elsewhere, we could be seeing a continuation of this trend that will ultimately have cascading effects across most asset classes and on consumer prices which are all related to energy prices.

While stocks saw some signs of recovery towards the end of last week with Asian, European and US markets recovering some of their losses following the invasion of Ukraine from Russia, stock prices could have a very difficult week ahead as tensions escalate and more sanctions continue to be announced. Over the weekend, the European union announced a variety of sanctions on Russia including limiting it’s access to EU airspace and prohibiting certain banks from utilizing the SWIFT banking system, a move which could have catastrophic effects on the russian economy and was by some considered to be on the most potentially effective deterrents. Investors are taking that into consideration and while the war for Ukraine rages on, this week is set to be one of the most volatile across markets with the prices of stocks and commodities being extremely susceptible to any kind of sanction and geopolitical instability. If the situation continues to escalate, risky assets like stocks and crypto currencies could be seeing another week of losses while investors continue to rush to safe havens like gold and the USD which benefited greatly last week from the shocking turn of events. Oil prices remain under pressure after Brent retreats from $100 While oil prices managed to decline as recent news emerged of potential talks between Russia and Ukraine to deescalate the situation after markets panicked following the invasion, the situation remains extremely uncertain. Brent is trading around the $95 area after pulling back from the multi-year high reached as supply concerns reached critical levels following the invasion of Ukraine which sparked a series of sanctions from western countries. Due to the fact that the Russian economy is so heavily reliant on its energy exports, much of which goes to Europe, those fears could persist throughout the week as a lack of resolution could only serve to further destabilize the situation. While there are potential alternatives available to European economies, many of them are costly and impractical for the time being and as it appears that at this point almost nothing is off the table, it could lead oil prices to retest those highs from 2014 and potentially even break past them.  

The worst case scenario - Russian invasion of Ukraine - is materializing. We try to analyze its consequences for the economy and financial markets Oil price increases past $100 per barrel Russia is a key player on the energy commodities market, especially important for Europe. Situation on the oil market proves it - oil prices jumped above $100 per barrel for the first time since 2014. Russia is exporting around 5 million barrels of oil each day, around 5% of global demand. Around a half of that is exported to the European Union. If the West decides to cut Russia off the SWIFT settlements system, Russian exports to the European Union could be halted. In such a scenario oil prices could jump $20-30 per barrel. In our opinion, the war risk premium included in current oil barrel prices amounts to $15-20. Europe is the main recipient of Russian oil. Source: Bloomberg, XTB Research Gold and palladium rally Conflict is the main driver of moves on the gold market. It is not the first time when gold proves to be a good store of value at times of geopolitical conflicts. Ounce of gold trades over 3% higher today, near $1,970, and just slightly over $100 below its all-time highs. Russia is an important producer of palladium, an important metal for the automotive sector. Source: Bloomberg, XTB Research Russia is a significant producer of palladium, which is a key metal in production of catalytic converters for the automotive sector. Palladium prices rallied almost 8% today. Fear means sell-off on the market Global stock markets are taking a hit not seen since 2020. However, panic is not as big as it was in early-2020. Uncertainty is the most important driver for global stock markets now as investors do not know what will come next. Correction on Nasdaq-100 futures deepened past 20% today. A big part of this drop, however, was caused by expectations of Fed tightening. DAX futures dropped around 15% since mid-January and trade near pre-pandemic highs. DE30 trades to halt decline at pre-pandemic high. Source: xStation5 Business in Ukraine is in danger It should not come as a surprise that Russian companies and companies with big exposure to Russia are the ones taking the biggest hit. Russian RTS dropped over 60% off the October 2021 high and briefly traded below 2020 lows! Polymetal International is a company worth mentioning - stock is plunging over 30% on London Stock Exchange as market fears sanctions will hit Anglo-Russian companies. Renault is also taking a hit as Russia is the second biggest market for the company. Banks with large exposure to Russia - UniCredit and Societe Generale - are also dropping hard. Even higher inflation From an economic point of view the situation is clear - military conflict will generate a new inflationary impulse. Prices of almost all commodities are trading higher, especially energy commodities. However, in case of commodity markets, a lot will depend on how conflict impacts logistics. Keep in mind that global logistics have not recovered from Covid-19 hit yet and now another negative factor is surfacing. According to the New York Fed index, global supply chains are the most tight on record. Central bankers' headache Covid-19 panic has been very short-lived, thanks to an enormous support offered by central banks. However, such an action is unlikely now. As conflict is inflationary and has a bigger impact on supply and logistics rather than demand, inflation becomes an even bigger problem for major central banks. On the other hand, quick tightening monetary policy would only magnify market turmoil. In our opinion, major central banks will continue with announced policy tightening. Risk of a 50 basis point rate hike by the Fed in March dropped but a 25 bp rate hike looks like a done deal. What's next? A key question for global markets now is - how much will the conflict escalate? An answer to this question will be a key to calming the markets. Once it is answered, calculations of impact on sanctions and speculations over changes in economic policy will begin.

While US indices plunged yesterday as the situation near the Ukraine-Russia border remained tense with the S & P 500 dropping 2.12%, Nasdaq falling 2.88% and Dow Jones pulling back 1.78%, reports of shelling in Luhansk and Donetsk Oblasts in eastern Ukraine continue. However, the US President will host a meeting with leaders of Canada, France, Germany, Poland, Italy, Romania, UK, EU and NATO today which along with an announced meeting between US secretary Blinken and Russia's Lavrov next week has helped moods stabilize slightly. Oil prices pulled back noticeably with Brent dropping below $90 and gold gave up some gains after benefiting from the significant risk-off moods seen this week which saw it reach the highest level since mid 2021. With a lack of data releases and with a long weekend ahead in the US, we could be seeing significant volatility across markets as investors and traders adjust their positions to limit risk exposure and in anticipation of a potential escalation of the conflict. On the other hand, any sign of easing of tensions has been received positively from markets and further indication could lead to a return of risk appetite across asset classes, which could favor stocks as well as the cryptocurrency market, which have struggled to maintain gains lately. UK retail sales point to continued post pandemic recovery Today's retail sales figures continue to provide encouraging signs as the economy recovers from the pandemic and as businesses as well as consumers begin to adjust to rising inflation. While these figures indicated a rise of retail sales volumes by 1.9% in January 2022 following a fall of 4.0% in December 2021, an interesting thing to note is that the proportion of retail sales online fell to 25.3% in January 2022, its lowest level since March 2020 (22.7%). Ultimately, it remains to be seen how the Bank of England's policy will facilitate this trend moving forward in order to avoid a stagnation situation and as rising prices across sectors continue to add pressure.

The news from US intelligence that the Russian aggression on Ukraine was a done deal spooked markets on Friday. While Russia denied it, the situation doesn't seem to be getting any better. How will markets react to further developments? Prepare for various options Markets are reacting and investors should prepare for potentially turbulent times. This is why we present 3 potential scenarios of the Ukrainian conflict and highlight key markets that may be affected. Watch these markets: Stocks – Russian banks, RTS and… Nasdaq VTB and Sberbank – the names of these institutions are nearly synonymous with sanctions on Russia. Little wonder these stocks are among top choices on the equity side. Investors may also focus on the diversified RTS Index where Sberbank has 14% share – the index has plenty of energy stocks as well and is down 30% from late 2021 highs. A less obvious choice is Nasdaq (US100). Why would US tech stocks react to the conflict in Europe? Well, since this market has its own share of problems (mainly Fed tightening), other bad news could impact investor sentiment even further. Commodities – Oil, Gold, Platinum, Palladium and Wheat Russia is the second largest exporter of Oil and the commodity is also a substitute for natural gas which has already been in tight supply in Europe. Gold has traditionally been a "top pick”for times of geopolitical uncertainty but we'd like to turn your attention to Palladium and Platinum – these are also precious metals but Russia is way more important here being the number 1 and 2 exporter respectively. Finally, both Russia and Ukraine are important producers of Wheat. FX – focus on USDRUB FX is fairly obvious – any conflict is detrimental for the Russian ruble even despite high oil prices and significant interest rate increases in Russia. On the other hand, USD attracts liquidity in times of distress so USDRUB could be the choice for investors here. 3 scenarios – invasion, tension and compromise The worst case scenario is the one of invasion – the one already hinted at by the US intelligence. Invasion means sanctions but actually the lack of sanctions is the key to reactions here (as the largest guns – like cutting off Russia from SWIFT – are supposedly off the table). Markets know that if Russia invades, forcing it to withdraw will be costly and that will feed uncertainty and fear. Critically negative for Russian stocks, negative for global stocks, positive for oil and precious metals and USDRUB. The most likely scenario could be the one of prolonged tension – Moscow can pose threats for as long as it achieves certain results (there’s a talk of autonomy or even referendums in Eastern parts of Ukraine). While politically complicated, this scenario can actually be a relief for the markets. For as long as invasion risk declines, this scenario is positive for stocks while being negative for oil, precious metals and USDRUB. Finally a scenario most would prefer – there's a sound compromise and Russian troops are ordered away from the Ukrainian border. This would be extremely positive for stocks (especially Russian banks and the Russian index) while negative for oil, precious metals and USDRUB. Unfortunately, this scenario also seems to be the least likely. XTB Research

Inflation has been a key topic in the markets in recent times with several readings reaching the highest levels in decades and central banks trying to find a balance between adjusting their monetary and fiscal policy while stimulating the post pandemic economic recovery. One of the consequences of these policies has been a staggering increase in prices of most goods, which has become a serious issue of concern for central bankers as well as regular consumers who have seen their everyday expenses increase noticeably. Today’s CPI and Core CPI readings from the US could be highly impactful as they may dictate whether the Federal reserve will decide to take action in the upcoming meeting since as of now, five rate hikes are expected and several other central banks have already taken measures to contrast general inflation. Clearly there is a fine balance between sustaining the economy and exacerbating widespread inflation which may ultimately hinder stability across markets and today’s report could play a crucial role in that process of analysis. The US Dollar may react favorably to a higher than expected reading as it could almost seal the deal on an upcoming rate hike, while stocks could be impacted by prospects of less liquidity.   Watches of Switzerland report paints optimistic picture Watches of Switzerland's report showed a continued growth of its revenue and return on capital with significant gain in market share as the company plans to continue investing for growth and to enhance its leading position in the UK and as it attempts to become a clear leader in the US. The easing of restrictions and improving economic conditions have certainly helped but with potential supply issues and record inflation levels, we could be seeing a slowdown in the short-mid term if these issues are not approached carefully. Astrazeneca posts strong results but remains cautious Astrazeneca's results showed a total revenue increase of 41% to $37,417m including COVID-19 vaccine revenues. The company managed to achieve 14 positive Phase 3 readouts across nine medicines in 2021, and 22 regulatory approvals and authorisations in major markets which further boosted its market dominance in the field. Furthermore, the company expects CER of a high-teens percentage increase in total revenue and a mid-to-high twenties percentage increase in Core EPS for 2022. Despite this, while it will certainly benefit from a variety of innovations it provides, it may see a decline in its profits as revenue from vaccines potentially declines throughout the mid to long term.  

While Oil prices have seen significant movements in recent times, with Brent gaining over 20% from the start of 2022 and reaching the highest level since october 2014, we are beginning to see a slight pullback despite an unexpected inventory drop shown in yesterday's API report. Talks surrounding the Iran nuclear deal, which could bring around 2 mpd supply into the markets, have helped prices retreat while easing of tensions surrounding the Russia-Ukraine situation have also boosted sentiment. On the other hand, while these are positive signs the situation remains uncertain as any further escalation could see supply significantly disrupted and as the Iran deal remains slightly out of reach for the time being. OPEC appears to be nearing production capacity and optimistic forecasts point to a rise in demand throughout the year so unless some progress is made among other producers, those supply concerns could translate into record prices and subsequent impacts on a variety of sectors. Today’s EIA inventory report could prove to be important for short term price action as a confirmation of the API report could potentially increase concerns regarding short term price stability.   Stock markets continue to recover as investors await earning reports from Uber and Disney European stock markets are extending the upward move after a positive Asian session and following a higher close of US indices despite some general uncertainty seen across markets. Stock prices have been increasingly volatile on the back of recent geopolitical tensions and some surprising earnings reports released during this earning season. Fiscal and monetary policy has also greatly impacted investor sentiment but many appear to be reassured for the time being as we see a continuation of the recent rebound across global markets while investors await today’s key earnings announcements from major companies like Uber technologies and Disney among others. While it remains to be seen whether these will manage to meet expectations, the situation remains quite fragile with many markets experiencing significant volatility and as several central bankers are also due to speak today.   Barratt Developments strong results boost investor confidence Barratt Developments report exceeded expectations and pointed to a stronger recovery from covid levels with over 18,000 home constructions and strong revenue figures. The company expects this positive performance to continue throughout 2022 and despite some uncertainty surrounding the global economic environment, the general market situation appears to favor such optimistic performance. It remains to be seen if the company will manage to successfully implement its strategy or if it will encounter issues driven by record inflation and potential supply chain disruptions.

As usual for the first Friday of the month, investors will be focusing on the highly anticipated Non Farm Payroll report from the US which will give an overview of the job market situation for January and which is expected to show an increase of only 150,000. However, this report will be even more highly focused on since Wednesday's ADP report surprised markets with a significantly below expectation reading of -301,000 and pointed to increasing difficulties in the world's largest economy caused in part by the Omicron variant. While rising costs and supply concerns continue to impact the economic recovery, the FED maintains its position that full employment has been reached and that it will adjust it’s policies when it deems necessary in order to stimulate further growth. A better than expected result could encourage the Fed to continue its approach, while a disappointing reading could cause further concerns and may shift focus slightly on wage figures and their relation to record level inflation in the world's largest economy. Either way, today could see a noticeable increase in volatility as investors assess the situation and as stock markets attempt to stabilize after several weeks of significant moves. UK Construction PMI sparks slight optimism The UK construction sector continued to gain momentum after a difficult end to 2021 thanks to an improvement in commercial activity which helped offset a weak rise in house building. Improvements were also helped by a drop in cost inflation which fell to a 10-month low thanks to an easing of supply issues, which have been affecting the sector for months. As a result, commercial work helped construction growth reach a six-month high but with supplier lead times continuing to lengthen in January as staff shortages and a lack of haulage availability hindered deliveries, the situation continues to be uncertain. Oil prices reach multi year high as global tensions rise As the situation on the Ukraine-Russia border continues to escalate with several countries sending military personnel in an attempt to mitigate the issue, we are seeing another record increase in the price of oil with Brent reaching the highest level since October 2014 and breaking above $92. While OPEC announced it will increase its production by 400,000 barrels per day in March, the market remains concerned for a potential undersupply and general destabilization which could have consequences for the vast majority of sectors in economies as they are tied to oil prices for transport, shipping and energy. We have already noticed increasing energy costs across the world and further tensions could see these increase even more as uncertainty may lead to stockpiling and difficulties in general trade. Despite this, an easing of tensions with a continued global recovery could see the price retreat as long as a balance is maintained with suppliers in the short and medium term.  

Central bank decisions tend to be significant events in normal circumstances, but today’s decision could prove to be quite interesting for markets as different decisions are expected from each of today’s banks. While the Bank of England is set to raise its rate for the second time and signal further unwinding of its pandemic stimulus, the European central bank is expected to maintain it’s wait and see approach despite record inflation of 5,1% announced in January. According to these predictions, we could be seeing a strengthening of the pound thanks to the 0,5% interest rate, while we could sese a mixed reaction of the Euro as markets remain uncertain about the fragile economic recovery, especially given recent escalations on the Russia-Ukraine border which could destabilize the entire continent. Despite this, any surprises in today’s decisions or announcements could have far reaching effects on both the FX market and equities across Europe and the UK as central bankers struggle to balance record inflation with the post pandemic recovery. Can Amazon’s earnings support US indices? While we have seen a noticeable recovery of global indices over the past several days, yesterday’s disappointing earnings report from Meta (Facebook) saw the stock price drop and weigh on US markets as well as general sentiment. Meta’s results came one day after Alphabet announced it’s positive results and optimistic outlook and despite this mixed sentiment, we are seeing a slight pullback of stock markets as they await another mega-cap report. Amazon’s results could prove to be a significant catalyst for potential movements in the markets as a better than expected result could further boost the recent recovery while a disappointing one could drag markets further down. The company benefited greatly from the recent global situation as demand for its products and services increased noticeably thanks to a solid strategy and cost optimization. On the other hand, like many other companies that benefited from the stay-at-home lifestyle, it remains to be seen if that positive performance has carried over into this new phase.  

While yesterday's FED decision to leave rates unchanged was mostly expected, the following press conference by chairman Powell left investors worried for the potential of more rate increases than previously anticipated. The head of the US central bank said the FED will adapt to changing economic conditions appropriately and still expects inflation to decrease this year, despite a variety of factors driving prices higher such as supply chain shortages and an unexpected increase in demand. Stock markets started Thursday trading lower after the brief recovery seen before the decision and are currently attempting to rebound as key earning reports continue to be released. Meanwhile, precious metals dropped significantly while a strengthening USD and rising yields continued to add pressure with gold falling to the lowest level in around 10 days while the USD index is testing 17-month highs. Despite this uncertainty across markets, investors could see yesterday’s decision as a sign the FED is willing to compromise and still continues to prioritize overall market performance despite record levels of inflation. Oil prices once again test multi year highsWhile much of recent attention has been on yesterday's FOMC decision where the US central bank decided to leave rates unchanged, oil prices have managed to recover from the recent pullback and have returned to test recently reached multi year highs. Brent is trading around $89,50 while WTI hovers at $88,25 as tensions relating to the Russia-Ukraine situation rise and as demand prospects continue to improve thanks to the strong pace of economic growth across the world. On the other hand, this price area has managed to act as a resistance in the past and unless we see a significant catalyst, prices might struggle to remain at these levels for an extended period as governments attempt to contain rising energy prices.

Today’s highly anticipated FED decision could have wide ranging implications across markets as it could alter the current state of economic policy and ultimately favour some markets over others. While there are several scenarios of what’s expected today from the US central bank, the most likely one seems to be a rate increase in March while maintaining QE for the time being , which many investors could see as a slight step back compared to the tone used by the FED recently. On the other hand, if the FOMC decides to surprise investors with a more hawkish than expected approach, it could lead to significant reactions across stock markets and cryptocurrencies even after the recent corrections we have already seen so far. The FED must be very cautious today as it appears to be stuck in a challenging situation, unable to ignore record inflation levels while also having a market that relies heavily on its fiscal policy and any misstep could have greater than expected consequences. Cryptocurrencies attempt to recover ahead of FOMC decision Cryptocurrencies and tech stocks have seen the majority of the volatility and pullbacks from recent uncertainty noticed across a wide range of markets to different extents. However, due to their exceedingly volatile nature, cryptocurrency prices moved significantly with the total market cap falling around $1 Trillion as the majority of top 100 tokens dropped around 20% reaching the lowest level in several months and shaking investor confidence in the sector. On the other hand, we are seeing an attempt to recover today with most tokens trading slightly higher ahead of the FOMC decision as some investors expect the US central bank to back off after seeing the massive reaction it’s recent announcements have had. While it remains to be seen whether the FED will go through with its plan, it is clear that a significant increase in volatility has the potential to scare many investors who may not be interested in projects for the long term and are mainly attempting to speculate on their prices for short term gains. Investors await Tesla earnings report While many investors will be focusing on the FED’s key decision today, earning season has also been a main topic of discussion with several major companies already publishing their reports. We have seen a variety of contrasting results with some exceeding expectations while others disappointed and ultimately reflected that in a significant share price drop. Tesla will be publishing it’s results today and investors will be looking closely to ascertain if the company is living up to the forecasts or if it also appears to be struggling with rising inflation and supply chain issues. A better than expected result could renew investor confidence in the company that has been able to impress many since being listed on the S&P 500 not long ago, while a disappointment could impact future prospects in addition to share price in the short term.  

While there have been a number of factors impacting the markets in the last few days, investors are now beginning to focus on earnings reports coming from some of the biggest companies in the US after the slight disappointments seen in the past couple of weeks. Today's focus will likely be Microsoft's report, which could shed some light on the performance of the tech giant that has recently been in the news for the substantial acquisition deal made with Activision Blizzard that shook markets last week. While there will also be other major earnings from companies such as Johnson & Johnson as well as General Electric, investors are still trying to adjust to the significant volatility seen in markets recently. As tensions rise in eastern Europe and as many await the key FOMC decision tomorrow, we could be seeing a continuation of said volatility along with widespread uncertainty.    UK public sector borrowing report  The public sector borrowing report showed a slight increase in December on a monthly basis after pulling back slightly in October. While this may not seem like a significant issue for the time being, government spending has been one of the key topics related to the post pandemic recovery since if unchecked, it would add significant pressure on future expenses and limit potential economic growth. As investors await upcoming central bank decisions and as inflation concerns continue to rise, today's report could shift the markets perspective slightly regarding the state of public finances in the UK as it once again begins to show signs of weakness.  

Netflix (NFLX.US) had humble beginnings. The company started as a mail-based DVD rental business in 1997 when DVDs were becoming mainstream in the United States. It operated with such a model until 2007 when its business focus switched to media streaming via the Internet. While Netflix continued to rent DVDs, its new services gained traction. A deal with major film production studios was reached in 2010 and in the same year the company started to expand beyond the United States by beginning to offer its services in Canada. Expansion accelerated from there and the company got involved in movie and series production. Netflix is now one of the world's best-known entertainment companies, offering services in more than 190 countries and having more than 220 million paid subscribers at the end of 2021 End of pandemic - end of growth? As Netflix increased its subscriber base, so has the company's sales and earnings soared. Netflix generated just slightly below $30 billion in annual revenue in 2021. The company's business benefited greatly from the coronavirus pandemic, with revenue increasing 24% in 2020 and 18.8% in 2021. Stay-at-home mandates boosted demand for various types of at-home entertainment products, including streaming services. However, as the pandemic started to be contained and countries no longer imposed as strict restrictions as they used to, Netflix growth started to slow. The company expects a big slowdown in new subscriber growth in Q1 2022, citing increased competition as the prime reason. Streaming business gets more difficult While Netflix warned that growing competition within the streaming industry makes the outlook for further growth in subscriber numbers bleak, it should be noted that it is not the only company in the business to have doubts about the future. Disney also said that maintaining high subscriber growth rates became difficult as the market became saturated following the Covid-19 boom. While some customers subscribe to multiple streaming services at once to get access to exclusive content, not everyone can afford that and has to decide which one to use. This is even more important now as high inflation causes consumers to be more cautious with spending. What's next? As costs are increasing and subscriber growth is faltering, streaming companies face a difficult decision on what to do next to preserve growth of their business. Streaming companies could boost spending on new productions in order to enrich their portfolio and attract new customers. However, they can also target existing but not "official" customers and this seems to be the decision Netflix decided to take by increasing crackdown on illegal account sharing. This is a risky play - barring such customers from Netflix' service could encourage them to start paying fees but it can also discourage them from using the company's services all together and switch to competition. Another approach to boosting sales in times of rising costs and slower subscriber growth could be boosting plan prices, which is also what Netflix has decided to do with prices for its services in the United States and Canada increasing in late-2021. Investors now have to decide if these steps can keep the bottom line growing or if they are just desperate moves to maintain the status quo. The stock is down more than 30% this year so many investors may see this as a bargain. But this will only be the case if the company finds a path to strong growth again.

Yesterday’s Q4 earnings report from Netflix was seen as a major disappointment with forecasts pointing to weaker subscriber growth amid rising competition, particularly when compared to the first part of 2021. While the company referred to increased competition as a major cause of this uncertainty, rising prices of plans may also be deterring some customers who now have access to a wide range of streaming services including Disney+ and HBO Max. The company’s stock dropped around 20% in after hours trading and could be set to begin today's trading in the $400 area - the lowest level since May 2020. Despite there being a general risk-off mood in markets, which has seen many other stocks also retreat, it remains to be seen if Netflix will manage to rebound or if it will continue heading lower. Crypto markets tank as risk-off moods dominate While it may appear that the crypto market has taken a big hit today, with the majority of top 100 coins down by around 10%, it is important to note that the general sentiment across markets is quite negative when relating to risk assets. This is in part due to the increasing prospects of fiscal and monetary policy changes from central banks, in particular the FED, which would remove a significant amount of liquidity from the market and that ultimately could lead to a significant fund reallocation. Furthermore, while we have seen major cryptos like Ethereum and Bitcoin drop below key levels like $3000 and $40,000, and reach the lowest level in several months they are both testing key support areas which previously preceded significant upward moves. While the global situation may be slightly different, it is worth keeping in mind that recent negative performance is not limited to the cryptocurrency market but is being seen across many different types of asset classes, albeit on a somewhat smaller scale. UK Retails sales decline and worry investors The 3,7% decline in retail sales illustrated by today’s report continues to indicate rising prices and economic uncertainty as some of the key reasons for the slowing down of sales. Despite Non-food stores sales falling noticeably in December, food store sales managed to only drop by 1% and retail sales as a whole were able to remain above pre pandemic levels. As the situation grows more uncertain and as inflation continues to be a key factor, it remains unclear whether central banks and governments will decide to take action or if they will wait and see if things improve naturally.

While the government and Bank of England have attempted to deal with the rise in prices and creeping inflation, today's figures continue to show that the path forward may be longer than expected. While a slight adjustment in monetary policy may contribute, today’s data showed the highest level in 30 years as the economy is still recovering from the pandemic and could take a significant amount of time to return to normal levels. Ultimately, this situation continues to impact everyday consumers who may see some very noticeable changes to their lifestyle and expenses if the ongoing trend continues. Crypto markets retreat as investors worry about increased regulation and central bank decisions Crypto markets along with other traditional risk assets continue to feel the pressure of incoming fiscal and monetary policy changes from central banks which is due to remove some of the excess liquidity from markets after the unprecedented support received by them, However, crypto is currently dealing a wide variety of negative news and potential increases in regulations which have contributed to the recent pullback across assets as Ethereum continues to hover above the key $3000 psychological level. While fundamental factors may have changed slightly, the second biggest coin is trading at the lowest level in several months and as traders await a catalyst, the situation remains potentially quite volatile. Activision Blizzard acquisition by Microsoft could be a game changer This $68,7 Billion deal could prove to be a turning point for Activision Blizzard, who has seen its share price drop more than 44% in the last year on the back of disappointing results and a number of corporate as well as internal issues. Microsoft announced it will be offering as many Activision Blizzard games as possible within Xbox Game Pass and PC Game Pass, which just reached 25 million subscribers, and might provide the much needed boost in player base. Furthermore, a more direct input in general operations decisions could aim to rectify decisional issues and bring a more united direction for the company moving forward. Investors already reacted to this news favourably with Activision Blizzard stock price gaining over 30% on Tuesday while Sony stock actually fell as shareholders consider the risks associated with this acquisition.  

Recent news surrounding tChinese data paints optimistic picture The latest Chinese economic data came in mostly above expectation with GDP increasisgn compared to the expected as it continued to highlight the strong pace of the post pandemic economic recovery. Meanwhile, retail sales increased 1.7% YoY in December (exp. 3.7% YoY), industrial production was 4.3% YoY higher (exp. 3.6% YoY) while urban investments were 4.9% YoY higher (exp. 4.8% YoY). Furthermore, the PBOC announcend it intends to lower 1-year medium term lending facility and 7-day reverse repo rate by 10 bps in order to provide additional assistance. While this data could be promising, signs of rising infections in China just 3 weeks before the winter Olympics could lead to widespread economic uncertainty, particularly if the situation is not handled effectively in the short term. Oil retreats at the start of the weekWhile Oil prices managed to have a positive performance towards the end of last week, with WTI breaking above the $83 resistance area, this week started with a slight pullback for both Brent and WTI. Rising demand uncertainty and the potential increase in global supply continue to pressure oil prices as they manage to remain in the upper limit of the recent trading range. While OPEC is expected to decide on potential production increases soon, markets remain focused on the delicate balance between supply and demand which has appeared to impact price fluctuations quite significantly throughout most of the post pandemic economic recovery. he PM Boris Johnson has led to some additional uncertainty in markets as they try to evaluate the potential impact of such revelations. While a major change in parliament remains unlikely, any serious concern for the stability of the government could have far reaching effects on the economy since it could potentially bring many policy changes. However, it is important to note that the major objectives of the government and the Bank of England are to contain inflation while facilitating the post pandemic recovery, and recent developments are unlikely to shift focus from those tasks in a major way despite them potentially leading to a short term increase in volatility. Furthermore, while in the long term this volatility may be mitigated, it could lead to significant risk aversion by investors in the short term as they try to assess the circumstances and predict potential outcomes. Tesco continues to show strong performance with Q3 updateTesco's Q3 and Christmas Trading Statement continues to show strong momentum from the company, with further growth even after the excellent performance seen last year and with the highest share in 4 years thanks to a positive performance both in stores and online. While this has allowed the company to forecast a retail operating profit slightly above the top-end of the previous guidance range, there are several encouraging signs across the economy that could benefit Tesco and which could help justify this optimism if it is able to continue implementing its strategy.

Recent news surrounding the PM Boris Johnson has led to some additional uncertainty in markets as they try to evaluate the potential impact of such revelations. While a major change in parliament remains unlikely, any serious concern for the stability of the government could have far reaching effects on the economy since it could potentially bring many policy changes. However, it is important to note that the major objectives of the government and the Bank of England are to contain inflation while facilitating the post pandemic recovery, and recent developments are unlikely to shift focus from those tasks in a major way despite them potentially leading to a short term increase in volatility. Furthermore, while in the long term this volatility may be mitigated, it could lead to significant risk aversion by investors in the short term as they try to assess the circumstances and predict potential outcomes. Tesco continues to show strong performance with Q3 update Tesco's Q3 and Christmas Trading Statement continues to show strong momentum from the company, with further growth even after the excellent performance seen last year and with the highest share in 4 years thanks to a positive performance both in stores and online. While this has allowed the company to forecast a retail operating profit slightly above the top-end of the previous guidance range, there are several encouraging signs across the economy that could benefit Tesco and which could help justify this optimism if it is able to continue implementing its strategy.

Oil prices are managing to extend the upward move and have recovered most of the losses from the November drop as Brent broke above the $84 level today after gaining over 4% this week and as WTI continues to hover around $81. While oil has been increasingly volatile lately, some concerns regarding production capacities and an improving pandemic situation are adding pressure as traders await today’s department of energy inventory report from the US. If the DOE report confirms yesterday’s API data, which showed a slight drop, it could lead to renewed price pressure and potential supply issues as general inflation remains a key topic of concern. On the other hand, an increase in inventories could alleviate some of this pressure and potentially bring some more fluctuations in the short term. JD trading update shows strong performance While JD’s trading update showed that total revenue for the twenty-two week period to 1 January 2022 increased more than 10% compared to the same period in 2020, the company continued to feel the impact of the COVID-19 pandemic, including the disruption of the supply chain operations. JD managed to mostly offset this thanks to sustained positive nature of consumer demand through the second half to date. This has given management confidence that the group headline profit before tax for the year to January 2022 will be ahead of current market expectations. Despite this seemingly positive report, it will be important to see if the company will manage to continue this positive performance and will be able to to deal with any unforeseen factors potentially brought by further restrictions or a change in central bank policies.  

After what appeared to be a mixed Asian session, European indices started Monday's trading session attempting to regain some ground after significant fluctuations seen last week. While there is a lack of major data releases today, this week could be very important for investors as the US earning season begins and as we await Powell’s testimony related to his renomination as FED chair which has proven to be quite positive for markets this far. In addition, news regarding the ongoing spread of the Omicron variant could continue to significantly impact both stocks and commodities, which as of late have been increasingly uncertain assets. Oil traders focus on OPEC production as prices fluctuate As mentioned previously, oil prices have been increasingly volatile as uncertainty grows regarding the balance between supply and demand with OPEC on one side determining the production and rate of increase, while we’ve seen a situation of significant fluctuation in demand in the short term as news continues to noticeably impact prospects for oil. On the other hand, traders await reassurance from oil producing countries as some doubts have emerged regarding their ability to maintain an adequate supply as demand continues to rebound as a result of the post pandemic recovery. While there is also the possibility that the Iran nuclear talks could bring an increase of oil supply to the market, most traders are focusing on whether or not there could be actual shortages which could cause significant increases in price volatility and ultimately lead to a domino effect across various sectors.

Many investors believe that the record or near record asset valuations we have seen are in a large part a result of unprecedented monetary policy and by central banks response to the Covid-19 pandemic, which included zero or negative interest rates and massive money printing. However, a lot has changed since early 2020, especially in the US since the economy recovered quickly and became overheated as a result of record stimulus. The majority of the data appears to be inflationary – demand is strong, business confidence is at the highest level in 2 decades, inflation in nearly 4 decades and unemployment claims lowest on record. All these factors combined have raised expectations for a significant change from the US central bank which is also due to discuss it's forward outlook and projections and could have a significant impact on market sentiment as well as other central bank decisions. A below expected QE reduction and no mention of a rate cut could potentially boost riskier assets as investors may continue to benefit from the ongoing central bank support. On the other hand, if the FED were to be more hawkish, we could see a readjusting of the market as capital flows are managed and investments are reassessed.  

Major cryptocurrencies and Alt coins have been under increasing pressure as of late as economic conditions worsen. While the sell-off continued yesterday, pushing Bitcoin 7% lower and Ethereum down 8%, investors continued to lower their exposure to risky assets ahead of this week's Fed meeting as it is set to be a major event. The Fed is expected to finally accelerate the pace of its QE tapering, which could reduce part of excess liquidity in the markets and is generally viewed as a negative for high-risk asset prices, like equities and cryptos. Meanwhile, it was reported yesterday that inflows into digital asset investment funds dropped below $100 million in the previous week, showing the second straight week of lower inflows indicating lower interest from investors during the ongoing correction. However, as we have seen several times in the past, corrections in the crypto market seem to have an impact on general sentiment but can also be reversed quite rapidly if investors were to receive an unexpected surprise. Purple bricks down 20% after lettings error Purple bricks stock price has dropped over 20% as the company recently announced it will set aside up to £9m to cover lettings errors . This delayed the release of the earnings report and could prove to be a hard to overcome hurdle as economic conditions continue to worsen and as the company contends with several more issues, including rising costs. While it remains to be seen if Purple bricks will manage to recover in the near future, the situation could continue to worsen until the ongoing matter is resolved.

Today’s session sees EU Indices start with gains despite elevated inflation levels and as last week’s preliminary Michigan consumer sentiment data coming in above expectations. The CPI data reading was in line with analysts' expectation but the most important thing for the markets remains central bank decisions on interest rates and the potential impact of the new Omicron variant. Despite focus today being on the Bank of Canada’s announcement, it will be followed during the week by many other major banks which could lead to an increase in volatility across markets as they receive the news and evaluate the possible ramifications of such decisions. While many central banks are expected to leave rates unchanged, the prospect of fiscal and monetary policy changes continues to add pressure to riskier assets and a sign of continued support to the markets could provide some relief to concerned investors. Oil prices pullback after attempted recovery While many markets have struggled in recent weeks as a result of the new variant and persisting inflationary pressures, oil has been one of the most affected assets. Prices have pulled back significantly and have been increasingly volatile as supply and demand remain uncertain factors and as producers adjust prices to cope with changing circumstances. The situation today doesn't seem that different with oil prices rising in the first part of the session but pulling back over 2% after starting the day with an upward gap and are currently trading below Friday's closing prices. Despite no major news causing today’s moves, the situation remains very uncertain as any major disruption resulting from economic slowdowns or further restrictions could cause significant impacts on demand and subsequently prices of oil.  

While stock markets started the day trading lower, with several indices down between 1-2%, many traders will be awaiting today’s key data releases from the US which include preliminary university of michigan consumer confidence as well as CPI inflation. Both these reports could have a noticeable impact on stocks, particularly in the US, as fears of rising inflation have pushed the FED to announce it’s tapering recently and could lead to further action taken by the US central bank while consumer sentiment has been on a steady decline for several months. A better than expected outcome from today’s data could reassure markets that despite growing fears related to the new variant the economy continues to recover which in turn could encourage the FED to change its approach in the near term. On the other hand, worse than expected reports could further incentivize the central bank to take action, something which may be closely followed by its peers around the world. UK GDP report leaves investors concerned Today’s GDP report showed an estimated growth of 0.1% in October 2021 and a return to 0.5% below its pre-pandemic levels. Services seem to be outperforming with an increase of 0.4% and a return to pre-covid levels while production output decreased by 0.6% in October 2021 and construction contracted output dropped by 1.8%, the largest fall since April 2020, partly due to rising costs and supply concerns. Overall today’s report could be considered positive by some, while on the other hand it may raise some concerns regarding the state of the economic recovery as we await the upcoming Bank of England decision.

Oil prices are attempting to extend the recent upward move after dropping to multi month lows following news of the most recent covid variant. The market was initially shaken by this as it brought the potential for further travel restrictions, which along with several other factors, could have had a disastrous effect on the demand for oil as we already saw during previous lockdowns. Recent optimism has helped drive oil higher but as the price has now found itself in a short term consolidation range, today’s DoE inventory reports could shed some light on the ongoing supply and demand situation within the world's largest economy. If the report were to point to an unexpected increase, we could be seeing some pressure ease off while a bigger than expected drop in stocks could once again lead to supply concerns and influence sentiment in the short term. TUI report shows sustained growth despite global uncertainty Today’s TUI report showed encouraging results as the company was able to significantly improve its financial performance while it also attempted to recover from the impact of the pandemic. Investors could also be reassured by the company’s plans moving forward and by it’s mid to long term vision in which it will prioritize cash management, drive operating effectiveness and reduce debt to improve its balance sheet. While it remains to be seen if the company will manage to execute its plan fully, some steps taken this far could inspire optimism in some as general sentiment continues to improve.

While the cryptocurrency market is known for its volatility and potential price spikes, the correction experienced this weekend appeared to shake confidence in the market as a whole. Prices were under increasing pressure following news of the new Omicron variant and the reaction seen in stock markets as many of them retreated below previous support levels, and over the weekend we saw a 20-30% drop in most major coins, including Bitcoin. Today the situation appears quite uncertain as BTC trades around $47,000 and as investors focus on headlines to ascertain the severity of the matter. One thing to note is that although prices dropped across the board, a look at the ETH/BTC chart indicates that a significant part of the money flowed into Ethereum rather than into the main crypto and we actually saw BTC dominance drop to the lowest level in several months. While this could point to the beginning of a new cycle in the crypto market, it remains unclear how investors will react to future price swings in this already puzzling environment. UK Construction PMI and Car sales point to improving conditions Today's IHS construction data showed the fastest increase in construction output for four months, driven partly by robust and accelerated rise in commercial work along with a drop in the number of firms reporting supplier delays and as input cost inflation dips to seven-month low. While these are all positive signs for the economy, pressure remains on the BoE to keep monetary and fiscal policy under control and to facilitate the continuation of the post pandemic recovery despite potential unexpected events. Today’s car registration figures paint a slightly different picture of the current situation in the UK economy with figures showing an increase of around 1.7% on a monthly basis and a return to the level seen last november. However, as inflation pressures continue and as uncertainty related to the new variant increases, we could be seeing an impact on multiple sectors of the economy, including car sales and registrations as consumers worry about rising costs.    

While markets have experienced a significant increase in volatility in recent weeks, we noticed an attempted recovery following the drop from the end of November which saw the German Dax break below 16000 points. However the situation has changed as investors await today’s main event which is the release of the NFP employment report from the US at 13:30 GMT. This report not only could give a comprehensive insight into the state of the job market in the world's largest economy, but it could also have a noticeable effect on the upcoming FED decision which will be carefully observed by market participants. A better than expected report could almost certainly pressure the central bank to speed up it’s QE tapering while a disappointment in the figures may see chairman Powell address those concerns in the upcoming meeting. While the new covid variant is a major factor of concern, markets are still unsure on how to react to the ongoing situation and any major obstacles to economic recovery could have impacts on monetary and fiscal policy in the near future. New business growth hits 5 month high despite rising inflation Today’s inflation figures continue to highlight the ongoing trend of rising prices and growing pressures on businesses and consumers as many costs continue to be transferred onto them. Despite this, new business growth has managed to hit a five-month high which could be considered an encouraging sign as we head into the end of 2021. Today’s figures also showed input costs and prices charged rising at record rates in November, a factor that could force the Bank of England to reconsider its approach if the situation were to escalate and start to cause significant issues in the economy.  

From an investor's perspective, volatility in the financial markets has never been so high. On the other hand, from the consumer point of view, prices did not change so dramatically in such a short time before. Where do the paths of investors and consumers cross? This usually takes place on the commodity market, and the most important raw material is, of course, crude oil and its processed products. From negative prices to nearly $ 100 a barrel The arrival of COVID-19 has led to unprecedented anomalies in the oil market. At one point, the price of a barrel of oil dropped significantly below zero. Due to restrictions around the world, many people have stopped traveling, flying or even going to shops. At one point, crude oil demand fell by as much as 1/3, or roughly 30 million barrels a day. Due to the huge disproportion between supply and demand, the organization of oil-exporting countries, i.e. OPEC, together with other important countries, decided to jointly limit production in order to restore the normal price situation on the market. Production restrictions by the OPEC cartel and other producers such as Russia continue to this day. In the meantime, however, measures have been taken to stimulate the economy after the coronavirus stagnation. Tons of cash poured from central banks and governments, leading to a significant recovery. There was a fear that oil might be running out, which is why OPEC + decided to moderately restore production. However, this process turned out to be too slow to meet market expectations, resulting in a 100% increase in prices. There was even speculation that the price would rise to $ 100 a barrel, which was a problem for consumers in the past. Too high prices could have curtailed demand. The coronavirus continues to haunt markets In recent months, we witnessed several coronavirus waves and limited restrictions. They did not have any real impact on the market, besides production expectations. Usually, the sell-off of riskier assets, such as oil, lasted about 2 weeks. In view of the next expected wave of Covid-19, OPEC + decided not to increase production. It turned out that the group was right. The Omicron variant suddenly impacted ordinary people and investors. Black Friday brought a huge discount not only in stores, but also in the financial markets. Crude oil fell by 15% in one session. The risk of imposing further restrictions, similar to those from the first lockdown, hit investors' moods. If you look at Austria, where another lockdown was introduced, the mobility dropped well below levels which we observed a few weeks ago, or even before the first wave of the pandemic. If current vaccines prove to be ineffective against Omicron, travel will be reduced, flights will be suspended, people will remain at home and the demand for oil will decrease. The vast majority of the population would prefer much cheaper oil, but not OPEC +. If the group already sees a clear oversupply of oil in Q1 2022, then with an additional decline in demand due to Omicron, further OPEC + actions are possible. Will we pay less at gas stations? Probably yes. However, it must be remembered that the price of gasoline depends not only on the price of crude oil. The price components are in most cases: Crude oil Refining margin Distribution and Marketing Taxes In the United States, the share of crude oil in the cost of fuel is as high as 50%. On the other hand, in non-oil producing countries, distribution costs and taxes account for a much larger share. Therefore, even if prices are now 25% lower compared to the high of the current bull market, it will lower fuel prices by just a few percent. That is why some countries decide to take other steps, such as reducing VAT or excise duty. What's next for oil? The world was very scared of expensive oil, but the seasonality still points to limited demand at the beginning of the new year. In such a case, the growth dynamics would be slowed down anyway. That is why we should not expect major efforts from OPEC +. On the other hand, the group would like to keep prices around $ 70-80 per barrel, which allows long-term planning of further mining projects. Therefore, in the future, we should expect further action from OPEC +, which will be aimed at keeping the price in this range.

While investors were waiting for several data releases yesterday, many were surprised by FED chairman Powell's comments relating to inflation, quantitative easing and the ongoing concerns tied to the new omicron variant. The central banker has decided to change his tone on inflation and now said that it is time to stop using the term transitory, a term he and many other central bankers have used to calm markets, when referring to the ongoing rise in prices. No surprises are expected in today's testimony but with the current risk moods, any further indications of a change in monetary policy moving forward could add pressure to the markets as they contend with growing uncertainty and mixed data. Nationwide HPI continues to rise Today’s Nationwide HPI showed a slight increase in house prices with annual house price growth increasing in November to 10.0% after a 0.9% MoM increase while also showing a 30% drop in housing transactions. The index continues to highlight rising inflation along with its impact on different sectors of the economy and while focus in recent days has been on the new variant, today’s HPI could add pressure to the Bank of England to potentially take action in the near future by adjusting it’s policy to control the extent of the impact.

Investors received contrasting views relating to the new variant of the coronavirus which caused a significant pullback at the end of last week and was followed by an attempted recovery during Monday's session. However, the situation has changed again today with the majority of stock indices pulling back from yesterday’s close and dropping to new lows as moods worsened following comments from Moderna’s CEO stating that the new variant could be more resistant to currently available vaccines. While most consider widespread total lockdown an unlikely scenario, any major disruption to the post pandemic recovery caused by restrictions or supply chain issues could have disastrous consequences on markets and could potentially lead to central bank interventions once again. Easyjet upbeat yearly results unable to boost share price While today's yearly results may provide some reassurance thanks to better than expected figures, showing a headline loss before tax of £1,136 million and a commitment to continue the company's cost saving policy as well as expanding it in the future, they were unable to boost share price with the stock continuing to trade below yesterday's close and despite a brief attempt to recover, reaching the lowest level since the beginning of November. Investors will be closely following the ongoing pandemic situation as any major lockdowns or restrictions could have far reaching effects for the company and airline industry as a whole heading towards the end of 2021

Oil prices experienced a significant shock towards the end of last week with WTI dropping almost 14% after news emerged of the new Omicron covid variant which threatened to impact several major aspects of the economy in the near future. While details surrounding the situation remain unclear, fears related to potential lockdowns or restrictions have impacted many assets with a particular focus on oil as the commodity has experienced significant volatility in recent months. Part of the problem is also the unclear situation related to supply, as OPEC decided to delay it’s technical meeting from Monday and Tuesday to Wednesday and Thursday as the group awaits further details from the WHO on the severity of the variant. In the meantime, we can see a significant rebound in oil prices today with WTI hovering around $71.60 and Brent trading at $75 while investors pay close attention to any news regarding the developing circumstances and as governments deliberate on potential measures to contain the spread. UK consumer credit data disappoints Today’s slightly below expectations mortgage lending continues to show the reluctance of UK consumers as they contend with increasingly high property prices, rising inflation and uncertainty regarding the covid-19 situation. Furthermore,a cause of concern could be that net lending to individuals was significantly below expectations, coming in at £2.3B compared to the expected £9.7B, this could lead to a slower than expected economic rebound as we head into the holiday season which could be exacerbated by other factors such as potential lockdowns or restrictions.

While US markets remain closed today as traders celebrate thanksgiving holiday, we are seeing a positive performance from European indices across the board as they attempt to return to their recent highs. The German Dax is hovering in the 15880 points area after several major companies in the index reacted favourably to the plans announced by the new coalition and are driving general sentiment higher. Despite the lack of events from the US and limited trading hours, traders will be keeping an eye on ECB meeting minutes as there are expectations that it will announce the winding down of the PEPP programme in March 2022 along with clarifying the central bank's outlook moving forward and hint to any upcoming fiscal and monetary policy changes as inflation continues to be a significant issue economies contend with. Gold attempts to rebound after tumbling below $1800 Despite a solid performance seen from gold for about a week, the precious metal experienced some increased volatility and dropped significantly after the nomination of Jerome Powell as head of the Federal reserve for a second term by president Biden. While gold continues to be considered a hedge against inflation by many, some have opted to look for alternatives which has also increased pressure on the price as it hovers in a key reaction area of $1790 after dropping around 5% from recent highs. A key thing to keep in mind is that while central banks have played a large role in the performance of this asset, stock markets have experienced a somewhat significant correction and a change in the current trend could have a noticeable effect on precious metal prices.  

Oil prices hold steady despite Biden announcement Oil prices have returned to their recent range despite the announcement from president Biden that the United States would be releasing some of its strategic petroleum reserves, a move which was meant to cool oil prices after many expressed concerns for the serious effects they are having on consumers and ultimately, the post pandemic economic recovery. While OPEC maintains its narrative and continues to expect a fall in demand towards the end of the year, the US along with a group of other countries are attempting to ease the pressure by tapping into their strategic reserves. As stated in the past, this move was unlikely to have a long term effect on prices since it would not be able to make a significant impact on total demand, and after a brief pullback which saw prices drop by around 4,5%, the move was reversed. Furthermore, we are seeing a faster than expected recovery in oil prices as Brent is trading above $80 once again and WTI hovers in the $78 range, this may worry markets once again as governments begin to run out of options to control the ongoing situation on the oil market. VirginMoney annual report paints optimistic picture Annual results from Virgin money continued to offer investors reassurance as they outlined the growing strength of the company which managed to increase its market share while reducing costs and ensuring expansion of the brand. The report also highlighted the ongoing effort to continue investing in different sectors of the business while also aiming to return to a sustainable dividend in the medium term and keeping up with technological advances. Despite some questions relating to the logistics and practical implementation of strategies, today’s report could be seen as an overall positive and may reaffirm confidence in the board as it managed to deliver on many of its promises and could continue to do so moving forward.  

Oil attempts to recover amid rising demand concerns Despite oil prices making significant gains recently, with WTI reaching a multi year high of $85.42 before pulling back, we have seen an increase in volatility as different viewpoints appear to be facing off. On one hand, we have OPEC and Russia who have advised against an increase in oil production as they foresee a fall in demand towards the end of the year despite the ongoing pressure, which has been caused by a faster than expected post pandemic economic recovery. On the other hand, we have the US and Japan who have been pushing for an increase in production and even announced they may be tapping into strategic reserves in order to cool off energy prices which have further contributed to the ongoing inflation concerns. At the moment, the market is in a difficult position as current supply concerns and price increases are being downplayed by a potential future deficit while it seems that traders are starting to agree with the latter viewpoint as we see the introduction of stricter measures to combat a rise in covid-19 cases keeping oil prices at the lowest level in over a month.  European stock markets start the week slightly higher After pulling back from the recent all time high at the end of last week, the DAX started the week trading slightly higher and is currently hovering around last week's close of 16160 points. While this will be a shorter week for US stock markets due to the Thanksgiving holiday on Thursday, traders will be keeping an eye out for the new FED chair announcement from president Biden along with the ongoing lockdown situation which appears to be escalating across Europe and could lead to further uncertainty along with potentially causing market major corrections if it were to worsen. Download our Mobile Trading App:   Google Play   App Store  

Crypto pullback continues as market cap nears $2.5 Trillion once again While the Crypto market continues to experience increased volatility in recent days, with Bitcoin still unable to interrupt a 10 day series of losses, we are seeing investor confidence being shaken with the total market capitalization dropping once again to the $2.5 Trillion range after nearing $3 Trillion just days ago. Despite no major fundamental news causing a reaction, Bitcoin dropped around 20% from the high reached on November 10th and is hovering near $56,000 while the majority of Alt-coins have experienced drops of 10-20%. This further emphasises the volatile nature of these assets which have experienced significant price fluctuations despite a lack of major drivers but also reaffirms the potential for them to rebound substantially as we have seen several times in the past. All in all, the situation is quite complex and while some may be expecting the downward move to continue, it is important to look at the other side of the matter where one can see that even on red days, there are several cryptos that are trading higher.  Investors await potential Biden Fed chairman decision Many investors are going to be paying close attention to today’s potential announcement from the United States as president Biden is set to decide on his nomination for head of the Federal reserve to possibly replace Jerome Powell. The Fed has played a key role in supporting the markets during the post-pandemic recovery with its extensive quantitative easing program and record low interest rates, but today’s decision may cause some nervousness as replacing the chairman of the US central bank could add to the unpredictability the markets are facing nowadays. While president Biden may wait till after market close to make his announcement, in an attempt to not shake up markets before the weekend, the fact remains that such a significant change at high levels of leadership could have far reaching implications for monetary and fiscal policy moving forward. Download our Mobile Trading App:   Google Play   App Store  

Stock markets uncertain ahead of US unemployment figures European stock markets started today's session mixed after a mostly negative asian trading session which saw Nikkei, Kospi and Chinese indices trade lower. Sentiment was also impacted in Europe after new data showed a 29% YoY drop in European new car registrations in October, to 798,693 vehicles, a record low reading for the month. Sales of Volkswagen (VOW1.DE) dropped almost 42% YoY, sales of BMW (BMW.DE) dropped 22% YoY while sales of Daimler (DAI.DE) were 34% YoY lower. Furthermore, rising inflation continues to be a key topic of discussion and investors await more information from central bank members who have mostly downplayed the matter as "transitory" despite data showing a sustained increase. Finally, today's US unemployment figures could be significant since the Fed has stressed the importance of the job market and said it would predominantly use it as a measure of when to potentially implement monetary and fiscal policy changes.  Jet2 mixed results highlight struggles of travel sector Jet2 posted mixed results today, highlighting the somewhat improving conditions of the travel sector after what has been a very challenging time due to lockdowns, restrictions and overall economic instability. While the company managed to increase its liquidity, the group's operating loss also increased and despite some reassurance from the board, rising fuel prices and the competitive pricing environment continue to be worrying factors for the company and industry as a whole heading into the final part of 2021. Download our Mobile Trading App:   Google Play   App Store  

Gold holds steady ahead of FED speeches Precious metals have experienced some significant volatility in recent times with the price of gold hovering in a $30 range over the last week and after gaining around 5% since the start of November. This comes despite the significant gains made by the US Dollar which traditionally tends to have an inverse correlation with the price of gold and which has recently reached the highest level since July 2020 as the USD index hovers around 95.946 after reaching a high of 96.255. On the other hand, rising inflation expectations, which have been downplayed extensively by the Federal reserve, continue to drive demand for gold as investors attempt to find covers against it and as markets remain uncertain about upcoming monetary policy decisions. Furthermore, the recent pullback seen in cryptocurrencies has also boosted demand for the precious metals as some seek more traditionally stable opportunities to invest, especially given the fact that gold has had a tendency to perform well heading into the end of the year. Today's Fed speeches could shed some light on what the US central bank is likely to do in the upcoming meeting and what it's outlook for the economy is as inflation continues to reach record levels and as investors seek refuge from rising inflation and excess volatility. Oil deepens decline despite lower than expected API report Whil oil prices have been the topic of discussion for weeks, we are now beginning to see a reversal as both Brent and WTI started the day with a downard gap and with the latter trading at the lowest level since the beginning of November. Traders await today's EIA inventory report for confirmation of yesterday's API report which showed a lower than expected increase in US crude inventories, as demand rises and supply issues remain a topic of discussion. Furthermore, several OPEC representatives and members have reiterated their view to not increase production levels as they foresee a potential market surplus heading into the end of the year due to a projected drop in demand. On the other hand, fuel prices have continued to rise which has led to many businesses transferring those costs onto consumers and ultimately impacting the post pandemic economic recovery. Download our Mobile Trading App:   Google Play   App Store

UK Unemployment figures improve ahead of BoE decision Today's positive unemployment figures continue the recent trend which has seen unemployment fall for several months in a row and reach the lowest level in 2021. This paints a slightly brighter picture for the economy as many businesses contend with rising prices, labour shortages and supply chain issues and could be used by the Bank of England to justify adjusting monetary policy after unexpectedly leaving it unchanged in its most recent meeting.  Crypto market in the red after US infrastructure bill passes  After several days of gains, which saw Bitcoin hover near it's all time high as many other altcoins managed to reach new highs, we are seeing a significant pullback in the crypto market today with most tokens down over 10% and BTC trading around $60,000. This comes after news that China will be intensifying the repression of crypto currency mining by imposing punitive electricity prices on households that mine crypto. Furthermore, US president Biden signed the $550 Billion infrastructure deal which includes some major tax implications for most retail crypto investors as it would require them to report their holdings. While these factors may frighten some investors and newcomers to the market, some experienced traders will have seen similar sized corrections in the past and could potentially be eyeing opportunities as mainstream adoption of cryptocurrencies and NFT's continues to move further. On the other hand, the extreme volatility that the market is prone to could lead to a potential domino effect if more negative news were to emerge and take prices to new lows. Download our Mobile Trading App:   Google Play   App Store  

 Oil holds steady as Biden considers releasing SPR While oil prices have become exceedingly volatile in recent times after rising supply concerns and various production issues, prices have managed to stabilise with WTI hovering in the $80 range after retreating from a high of almost $85 reached last week. Meanwhile, calls on president Biden to release the country's strategic petroleum reserves (SPR) have mounted, as concerns for the rising price of gasoline has led many US politicians, including senate majority leader Schumer to pressure the president. This comes after OPEC decided once again to leave the rate of increase in production unchanged, despite oil prices having a significant impact on consumer activity and playing a significant part in the recent inflation discussions. While there is a lack of major data releases today, traders will be looking for any news relating to the supply of oil as an announcement by the US president could cause a short term immediate reaction for prices, while it's long term impact could ultimately be less significant.  Stock markets on edge after mixed Chinese data European indices have managed to start the day almost unchanged after a mostly positive Asian session, which saw the majority of stocks in the region gain slightly despite the mixed Chinese data. While Chinese industrial production increased 3.5% YoY in October (exp. 3.0% YoY) and retail sales were 4.9% YoY higher (exp. 3.5% YoY), urban investments increased only by 6.1% YoY (exp. 6.3% YoY) and showed the lowest daily steel output since December 2017 along with an alarming 17% drop in cement output, which is an important indicator for construction activity in the world's second largest economy. Investors could be more cautious heading into this week as several central bankers are expected to share their outlook on economic growth and as Wall Street earnings season nears its conclusion. Download our Mobile Trading App:   Google Play   App Store  

Labour issues persist as UK struggles with vacancies The labour market in the UK continues to struggle with the post-pandemic recovery after today's REC figures showed active job postings reaching 2.68 million in the first week of November and indicated the fourth highest weekly increase since the start of 2020 despite rising costs of living. This highlights the ongoing labour market issues which many businesses are being impacted by and which has forced a number of companies to relocate in order to adapt. While there are several factors which have led to this situation, it remains a key issue in need of resolution as it will undoubtedly impact growth prospects moving forward since it is showing no sign of slowing down. Despite the fact that the situation in the UK was exacerbated by Brexit, this issue has not been excluse to the UK, as many other countries also contend with similar circumstances and as governments and central banks attempt to maintain the pace of the economic recovery.  Astrazeneca guidance unchanged after positive Q3 results Astrazeneca's Q3 results managed to exceed expectations with a growth in revenue in the third quarter of 50%. The company has benefited from the increase in sales seen during the pandemic but managed to further increase its performance by achieving eight positive phase three trials and acquiring Alexion. While operating expenses in the third quarter showed a significant increase, investors will be reassured by the company leaving its earnings guidance for the full year unchanged and by the prospects of new innovations moving forward. Download our Mobile Trading App:   Google Play   App Store  

GBP tries to recover after disappointing UK GDP figures The Pound is attempting to recover after today's disappointing preliminary UK GDP report provided another worrying sign for the post-pandemic recovery, showing a growth of 1.3% compared to the expected 1.5%. Furthermore, as the economy contends with rising inflation, supply shortages and labour issues, pressure remains on the Bank of England to adjust monetary policy after it chose to remain on hold in the latest meeting. Consumer spending rebounds despite supply issues and rising costs  While UK GDP figures came in below expectations, consumer spending managed to rebound significantly in October with an increase of 14,2% as a rise in demand for takeaways and digital entertainment boosted spending. Despite ongoing inflation concerns and rising household bills, consumer spending increased in several sectors but fell slightly when it came to retail spending as interest in goods such as clothing decreased while the travel sector had it's best month since before the pandemic with spending on international travel recovering noticeably. These figures provide an encouraging sign for the economy as it heads into the festive season but as supply shortages,rising inflation and labour issues persist, it will be essential to see how the government and BoE adapt to the situation moving forward. Download our Mobile Trading App:   Google Play   App Store  

US indices retreat as Tesla drags market Wall Street interrupted a winning series with the S&P 500 index closing lower for the first time in 9 days and with the Nasdaq being the worst performing index after it was pressured significantly by the plunge of Tesla shares, caused partly by comments made by the CEO Elon Musk in which he indicated the possibility of selling a portion of his shares if a twitter poll were to decide accordingly.  Today, investors await US CPI inflation data which is expected to show an increase of 5.8% y/y and which could potentially influence the FED to further adjust it's QE tapering after it's announcement in the most recent central bank meeting. Furthermore, earnings reports from Disney and Beyond Meat could also be worth keeping an eye on after this earnings season has proved to be surprisingly positive for the majority of companies.  Marks and Spencer posts strong Q3 results  M&S H1 results indicated a significant rebound in sales and a performance recovery which could be attributed to underlying improvements in all main businesses along with a reduction of net debt as the company has managed to effectively adapt to changing conditions. Better than expected financial results, along with a clear plan to continue expanding thanks to more partnerships and store openings, continue to provide reassurance to investors who may be finally looking past the noticeable impact the pandemic has had on the business in recent times.

Bitcoin reaches new all time high as Crypto market cap surpasses $3Trillion The main cryptocurrency has managed to break through its previous all time high and is currently hovering around $67,500 as the entire market appears to be gaining momentum today with other majors like Cardano and Litecoin up over 10%. After a brief period of consolidation, the rally was supported by some upbeat fundamental news like Mastercard launching crypto-linked payments cards in Asia which after recent news of a Bitcoin ETF approval in the US, continues to further the narrative that cryptocurrencies are becoming more widely accepted which in turn furthers mass adoption. While the price of BTC has pulled back slightly, it still remains unclear if it will be able to extend the upward move as it could be increasingly susceptible to news and the general sentiment. Either way, as we have seen in the past, any signiant move by the main cryptocurrency could lead to a domino effect across the market as traders and investors attempt to capitalize.

US tech stocks under pressure ahead of FED speeches While US stock markets continued to reach new all time highs and after the FED announced it would be starting its QE tapering in last week's meeting, we are seeing some increased selling pressure at the start of the week with US futures slightly down. This comes after Elon Musk announced over the weekend that he would be selling 10% of his Tesla shares (worth around $21 billion) depending on the results of a poll he held on Twitter, this in turn worried some investors who noted that selling such a significant stake could create significant downward pressure on the share price. On the other hand, it is worth noting that due to the elevated trading volume that Tesla shares experience, any potential impact could be significantly mitigated if the CEO were to spread that sale across several weeks. Finally, today's FED speeches could shed some light on the central bank's outlook heading into the final part of the year and could further elaborate on last week's decision to begin tapering and how that may impact stocks in the near future as the central bank attempts to not worry investors.  Bitcoin approaches all time high as cryptos climb higher After some time spent consolidating in the $60,000 range, Bitcoin has managed to break through the upper limit of the trading range and resume the upward move with the main crypto currency approaching it's recently reached all time high as it trades around $66,000. This positive sentiment is echoed across the majority of other coins with the total market cap once again nearing the $3 trillion mark and with Ethereum once again reaching a new high. While we have seen Bitcoin impact other crypto currencies in the past, a break past the previous all time high could lead to a significant increase in volatility and a potential domino effect as more investors enter the market or reallocate their funds. Download our Mobile Trading App:   Google Play   App Store  

The highly anticipated US NFP report came in slightly above expectations at 531K vs 455K and showed Average Hourly Earnings m/m change of 0,4% confirming the ADP report which indicated an increase of over 500K earlier this week. Stock indices in Europe and US futures were trading higher ahead of the US jobs data release and have managed to maintain their gains as they hover around all time highs. Furthermore, the US dollar continues to be one of the best performing currencies with GPBUSD pair reaching the lowest level in over a month after the BoE decided to leave rates unchanged in its most recent meeting. The report comes after the FED's announcement of QE tapering which also did not have a significant impact on stocks, as it was mostly priced in. On the other hand, today's NFP could highlight the importance of macro data for the central bank and may lead to discussions related to rate hikes in the near future, as Powell stressed the significance of wage data on potential future changes in policy. In either case, the FED will be under increasing pressure to reassure markets against the risks of what it has maintained is "transitory" inflation as other central banks begin to take steps to adjust fiscal and monetary policy. Download our Mobile Trading App:   Google Play   App Store

The Bank of England has decided to leave rates unchanged at 0.1% and to maintain the amount of quantitative easing at £895billion. The British pound retreated after the announcement while FTSE100 stocks have managed to recover in part. While today's decision may have come as unexpected to some, it almost certainly will ensure a rate hike in December as rising inflation continues to be an issue impacting economic recovery. Download our Mobile Trading App:   Google Play   App Store

Investors await Bank of England decision Markets await today's highly anticipated Bank of England decision as expectations are mixed for today's meeting after yesterday's FED decision to start the QE tapering process. While some analysts think the central bank will raise interest rates by 15 points, others believe the bank will follow in the Fed's footsteps and leave rates unchanged while adjusting government asset purchasing. The uncertainty surrounding today's decision could lead to some added volatility once it is announced as many believe that rising inflation must be addressed by the Bank since it is having a significant impact on the economy as a whole. Whatever the BoE decides to do, it is clear that the global situation is beginning to shift as more central banks start to take steps towards normalising monetary and fiscal policy after nearly two years of emergency measures.  OPEC meeting remains in focus as Oil prices rebound Oil prices continued to trade higher in recent times, reaching new multi year highs and benefitting from the last OPEC decision to not increase monthly output further. While that decision caught markets slightly by surprise as many were expecting an increase in order to cope with rising demand and several supply issues, today's decision could be equally as important as it could set the tone for the final part of the year. OPEC is expected to leave the production increase at the previously agreed upon 400K, but any major surprises could potentially impact the prices of oil either by pushing them higher once again or by pressuring them back down if the group were to decide to unexpectedly increase levels. Download our Mobile Trading App:   Google Play   App Store

Markets await Fed decision and potential QE taper The highly anticipated Federal reserve meeting is due to take place today as US central bankers are set to announce the beginning of QE tapering after much deliberation. The decision has been a key subject for markets since it could have significant effects on stocks, commodities and the US dollar as "transitory" inflation continues to rise in the US, threatening the post pandemic economic recovery. While the taper announcement is no longer a game changer for investors, it would indicate the beginning of the process of normalisation for the Federal reserve and could precede several rate hikes in the coming year. These in turn could have significant effects on prices of tech stocks, which have benefited greatly from the excess liquidity seen in markets as a result of the Fed's dovish policy.    Nationwide HPI shows ongoing rise in prices Today's Nationwide HPI report continued to highlight the steady increase in property prices in the UK with the price of a typical UK home topping a quarter of million pounds for the first time with prices up 0.7% month-on-month. While demand for homes has remained strong despite the expiry of the stamp duty holiday at the end of September, the situation remains unclear as pressure mounts on the BoE to potentially act in the near future by raising interest rates as the current situation could hinder the economic recovery moving forward. Download our Mobile Trading App:   Google Play   App Store

Ethereum reaches new all time high Moods in cryptocurrency markets have improved after positive news emerged from Asia and following the solid performance of Bitcoin, which closed October with the highest monthly gain in 2021, further boosting investor confidence. The second biggest cryptocurrency by market cap has now also managed to reach a new all time high with Ethereum breaking above the previous high and reaching a new one after gaining over 3% as the majority of coins appear to be rising. While it is unclear whether this move will continue, today's achievement could further boost confidence in the current market as it comes after an updated prediction of Ethereum by Goldman Sachs which projected the coin reaching $8000 before the end of the year. Furthermore, prospects for a potential Ethereum ETF after the approval and launch of Bitcoin ETFs appears to be a possibility in the near future, which in turn continues to point towards increased adoption of the new blockchain technologies along with a wider appeal of this type of asset as more investors shift towards the space.   BP announce positive quarter and boost share buyback BP announced another quarter of positive results, indicating rising commodity prices and improving conditions as main drivers for the company's continued growth. The company also announced an expansion of its ongoing share buyback program by adding a further $1.25billion which will be adding to the $1.4billion already executed in the first half of the year. While net debt remains a key area of concern, totalling around $32billion, investors may look favourably on today's report as it highlights the companies resilience and adaptability along with it's prioritization of cash flow to strengthen its financial position as future prospects of rising oil prices driven by increased demand and limited supply could also potentially improve the outlook, particularly for the next quarter. Download our Mobile Trading App:   Google Play   App Store

European markets start week higher after Wall street records Markets started Monday's session higher after last week's excellent performance from US indices, which managed to reach new all time highs despite disappointing earning reports from the highly anticipated mega-caps (Apple, Amazon). The German Dax opened with an upward gap and after rising 0,8% is now trading at the highest level since early September as investors await this week's central bank decisions and key macroeconomic data along with more earnings reports. Focus remains on policy, data and monitoring the ongoing economic recovery, which is being potentially hindered by rising inflation, supply chain issues and labour shortages and any significant shift in approach could lead to larger than expected effects across markets.  Oil nears recent highs ahead of OPEC+ meeting  Oil prices have been attempting to recover from the recent pullback which saw WTI drop over 5% and reach a low of $80,65 before rebounding slightly. Prices are once again heading higher and after breaking above the $84 level, are closing in on the multi-year highs reached last week while traders follow news of potential supply constraints indicated by OPEC. The Oil producing group is expected to meet this week and could give a further indication of the situation in the highly volatile energy market along with their near term projections, while addressing current supply concerns and the ongoing issue of rising oil prices. This is an important week for oil prices as both the OPEC meeting and inventory reports could potentially push prices past recent highs or alternatively, cause another pullback in the event of an unexpected production increase. Download our Mobile Trading App:   Google Play   App Store

Amazon and Apple disappoint investors as supply issues persist Yesterday's aftermarket announcement from the two mega cap giants surprised investors as both Apple and Amazon showed lower than expected results and disappointing figures. Both companies missed their revenue expectations and indicated supply chain issues as key issues facing their business, while highlighting the need to be cautious as the situation is resolved moving forward. Both stocks dropped over 3% in aftermarket trading and impacted US futures, which shortly before that managed to reach new all time highs, boosted in part by the positive performance seen from other mega caps throughout the week. While US indices hover around key levels, It will be important to see how they react to today's earnings from major oil companies (Exxon, Chevron) as further disappointment could lead to an even larger correction heading into the weekend.  Euro holds steady after mixed European GDP data  Today's GDP data from Europe proved to be mixed, with the French reading surprising to the upside while Spanish figures missed expectations. Data from Germany and Italy also was mixed as the Italian economy, just like the French one, grew much faster than expected in the July-September period while the German economy grew slower than expected. This comes after yesterday's disappointing US GDP figures which showed a below expected growth of 2% and highlighted the ongoing issues facing the economy in this stage of the post pandemic recovery. These GDP reports, along with inflation data continue to become increasingly noteworthy as central banks across the world are using these measures to potentially determine whether or not there is an immediate need for intervention as well as influencing future policy. Download our Mobile Trading App:   Google Play   App Store

ECB decision in focus as US earnings season continues While central bank decisions and events have become increasingly relevant and followed, today's announcement could hold even more importance as it will precede next week's FED announcement where the US central bank is expected to announce the long awaited QE tapering. The ECB is unlikely to change it's rates at the moment but we could see further indications of what the central bank is planning and what it's economic outlook is heading into Q4 2021, particularly in Lagardes press conference shortly after the decision. The announcement will follow German CPI data and will precede the release of earnings report from two US mega caps (Apple and Amazon).   US GDP for Q3 expected to show significant slowdown Today's US GDP report for Q3 could be particularly impactful as it is expected to show a significant slowdown, another indication that rising costs, supply chain issues and restrictions are continuing to have a noticeable impact on the economy as a whole while affecting certain sectors more noticeably. It is possible that today's data could influence the FEDs upcoming decision where it is expected the US central bank will announce its QE tapering as the issue has been delayed several times. While annualized GDP growth is expected at 2.7%, down from 6.7% in the previous quarter, a significantly better than expected report could seal the deal on the upcoming QE decision.

During today's budget announcement Chancellor Sunak indicated he was optimistic on unemployment and stated that GDP growth has been revised positively by the OBR from 4% to 6.5% while warning that inflation could persist at a rate of over 4%. In addition, he stressed the importance of preparing for the possibility of a future crisis and the potential need to act to tackle inflation in the short term as it could continue to be an issue for several months. Furthermore, the chancellor said that day-to-day spending would be funded from taxation and not from borrowing, highlighting that underlying public debt as a percentage of gross domestic product must fall. Today's budget announcement could play a key part in reassuring investors and consumers about a wide variety of issues but could also lead to some doubts regarding the feasibility of implementing it. Download our Mobile Trading App:   Google Play   App Store

After an overall positive performance from cryptocurrencies over the last few weeks, boosted in part by bitcoin reaching a new all time high along with the launch of the first ETF on bitcoin futures, we are seeing a significant pullback across the board. Bitcoin has dropped below the key $60,000 level reaching the lowest level in two weeks and has dragged the rest of the market down with it, leaving few exceptions as the crypto market cap fell back under $2,5 Trillion. While altcoins have had even larger reactions with many falling between 10-15%, this appears to be a somewhat expected correction as the market was in an extended upward move despite bitcoin trading sideways in the last few days. The situation remains uncertain, but it seems that Bitcoins performance continues to be crucial for the overall market and any significant moves for the main cryptocurrency will be amplified for the rest of them.  FTSE100 encounters resistance ahead of UK budget announcement While the overall performance of the FTSE100 has echoed that of its European counterparts, the UK index has encountered resistance around the 7250 handle after rising over 1% in the last week. Investors await today's key budget announcement from chancellor Rishi Sunak where he will be outlining the post covid economy budget which is aimed at assisting in the economic recovery after the pandemic. The impact of such an announcement could vary depending on the scale of the measures implemented but it will be essential to reassure investors and consumers about the ongoing rise in inflation, supply chain issues as well as how the government plans to deal with unemployment.  Download our Mobile Trading App:   Google Play   App Store