Calmer quotations on Thursday
09 March 2023
The calendar on Thursday is unusually empty, but I guess we got enough attractions on Tuesday and Wednesday and we will certainly get attractions tomorrow, with all the NFP on the schedule. For those who didn’t pay attention to the market, let me inform you that Jerome Powell, while testifying before Congress, was surprisingly hawkish, anticipating more rate rises in the future. The market reacted in a typical manner – the Dollar strengthened and indices dropped. While the new bullish trend on the Dollar seems rock solid, the future move on indices seems rather unpredictable. Yesterday, we saw a correction on most of them, which allowed to create a hammer candle. This shows that stock traders are pretty resilient to what happened in FED.
Thursday starts red on indices but the drop is pretty mild and controlled. What’s more, a low opening can be a good base for a further rise - let’s see how European traders play this out. On the currency market, we have a small correction of the recent moves. The Australian Dollar, hit in the previous days by the dovish RBA, is currently rising. The American Dollar is on the back foot but, again, this no reason to worry and we will most probably see it shine again soon. Interestingly enough, the Swiss Franc remains strong. On Monday, we found out the inflation in Switzerland came higher than expected and, since then, the CHF is on the way up almost without a stop.
It seems like commodity buyers gave up after Powell’s testimony. Gold remains close to the yearly lows and oil abandoned the buy signal from the end of the previous week. Brent oil came back below the down-trendline, which usually is a bad omen.
We do not expect any bigger moves on the market and traders will rather position themselves ahead of Friday’s busy calendar. Not only are we expecting the job data from the US and Canada, but also the GDP from the UK and the latest assessment from the BoJ, so Friday will certainly be fun.