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Forex Market Analysis: Key Asset Trends Amid Rate Shifts 8 January 2024

January 8, 2024

FX Daily Analysis: 8 January 2024

CURRENCIES:

  • Market Q1 Outlook: Gold, Stocks, EUR/USD, GBP/USD & USD/JPY monitoring Fed and US Yields
  • Gold and U.S. equities experienced moderate losses in the first trading week of 2024
  • Pressured by a significant rally in Treasury yields and a rise in the U.S. dollar
  • Strong December U.S. jobs report bolstered the U.S. dollar
  • Traders in late 2023 priced in deep rate cuts for the coming year
  • U.S. central bank signaled potential borrowing cost cuts, but economic resilience may delay the easing cycle
  • This sets markers for a potential deeper reversal in the coming weeks
  • If mean reversion of returns unfolds, gold and risk assets could face challenges
  • Euro, British pound, and Japanese yen may weaken against the U.S. dollar
  • Different and complex market dynamics expected in early 2024
  • Attractive trade opportunities and setups anticipated for key assets

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STOCK MARKET:

  • Corporate Earnings and Inflation Focus This Week
  • Bank of America, Wells Fargo, JPMorgan, BlackRock, and Citi to Report Q4 Earnings
  • Consumer Price Index (CPI) for December to be Released Thursday
  • Producer Price Index (PPI) for December Out on Friday
  • S&P 500 Enters Q4 Reporting Period After a Negative Start in 2024
  • Tech-Heavy Nasdaq Down Nearly 4% Over the Last Five Trading Sessions
  • December Jobs Report Shows Solid US Labor Market, Adding 216,000 Jobs
  • Unemployment Rate Holds Steady at Historically Low Level of 3.7%
  • Average Hourly Earnings Increase 0.4% Monthly and 4.1% Annually
  • Market Debate on Federal Reserve Interest Rate Cuts Continues
  • Goldman Sachs Expects First Cut in March, Markets Pricing in a 66% Chance
  • December CPI Print Expected to Show Annual Inflation at 3.2%
  • Core CPI Forecasted to Rise 3.8% YoY, Monthly Core Price Increase of 0.3%
  • Corporate Earnings Season Kicks Off with Delta Air Lines, JPMorgan, Citi, Wells Fargo, Bank of America, and BlackRock Reporting
  • Investors Anticipate Updates on Consumer Spending and Financials Amid Higher Rate Environment
  • Market Pessimism on Q4 Earnings with S&P 500 Estimates Falling 6.8% Since September 30
  • Deutsche Bank Chief US Equity Strategist Expects a Robust Quarter for Earnings but Notes Potential Market Temperance Due to Previous Rally.

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