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Market Update – February 13 – Stocks Cautious & USD Up


The consistency of the hawkish message, that rates are going higher and will remain in restrictive territory, is finally hitting home and yields rose in sync and weighed heavily on stocks and bonds this year.

  • Nikkei loses 1%, US500 futures 0.4%, US Dollar extends gains before US CPI & retail data. Asian shares fell ahead of the data but also due to the weak earnings that weighed on the sentiment.
        • Lyft, Tokyo Electron (-4.39%), SoftBank (-1.12%), Advantest (-1.57%), Shiseido (-3.97%), Olympus (-2.25%).

In case you missed it, the Morgan Stanley Market Sentiment Indicator (MSI) has turned risk negative & the GS program trading desk writes: “Inflecting CTA flow could translate to an approx. 20% sell off in US equities over a month in a down tape scenario”.

  • FXUSDIndex UP – saw a high of 103.70 before correcting to currently 103.44. Reuters: “Risks could be to the upside given a re-analysis of seasonal factors released last week saw upward revisions to CPI in December and November. That lifted core inflation on a 3-month annualised basis to 4.3%, from 3.1%.”
  • EUR & GBP – extend losses against USD – 1.0680 & 1.2057 respectively.
  • JPY – held above 132 area on reports that Japan’s government is likely to appoint academic Kazuo Ueda as the- next BOJ governor, a surprise choice that could see the country finally align with other major economies in raising interest rates.
        • USDJPY – if 132.80 is broken, next R: 134.80.

  • Commodities – USOil – steady at 79 after +2% spike. If higher inflation then concerns could increase that the move would slow economic activity and demand for oil. Russia to cut oil output by 500,000 bpd in March.
        •  – “Oil may resume its rally in 2023 as Chinese demand recovers after COVID curbs were scrapped and lack of investment limits growth in supply, OPEC country officials told Reuters, with a growing number seeing a possible return to $100 a barrel.”
  • Gold – sideways at $1856-1867.
  • Cryptocurrencies  – BTC – Tested $21.3k lows, currently at $21.8k.

Today We have heavy release schedule through mid-February. We expect  Fed policy, US January retail sales, inflation indexes, housing starts, permits and Philly Fed indexes.

Biggest FX Mover @ (07:30 GMT) NZDJPY (+0.84%). Extends above 20 DMA. MAs remain aligned higher, MACD histogram & signal line turned positive, RSI 72, H1 ATR 0.15, Daily ATR 0.861.

Click here to access our Economic Calendar

Andria Pichidi

Market Analysis

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in Actuarial Science from the University of Leicester.

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