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MTrading Team • 2023-01-31

Crude oil remains on the back foot on global growth concerns

Crude oil remains on the back foot on global growth concerns

Global markets remain dicey as traders braced for crucial central bank announcements. Adding strength to the cautious mood are the mixed headlines from the International Monetary Fund (IMF) and China. Above all, Monday’s statistics amplified anxiety over the hawkish rate updates and challenged the sentiment.

The same joined sluggish yields to underpin the US Dollar’s recovery for the third consecutive day, which in turn weighed on the major currencies and Antipodeans.

It’s worth noting, however, that the hopes of no major recession and upbeat China tried to defend the optimists, which in turn put a floor under the risk-barometer AUDUSD prices. Even so, disappointing Aussie Retail Sales weighed on the quote.

Elsewhere, Gold prints a four-day downtrend and so does EURUSD whereas Crude oil extends the previous day’s losses to the lowest levels in more than a week.

Alternatively, Cryptocurrencies lick their wounds, mildly bid of late, after declining the most in five weeks the previous day.

Following are the latest moves of the key assets:

  • Brent oil drops for the second consecutive day, mildly offered near $84.50.
  • Gold remains on the back foot for the fourth consecutive day, approaching $1,900 of late.
  • USD Index extends post-GDP rebound to 102.30 at the latest.
  • Wall Street closed with losses and challenged the Asia-Pacific bulls. However, equities in Europe and the UK are directionless of late.
  • BTCUSD and ETHUSD consolidate the previous day’s losses around $23,000 and $1,580 as we write.
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IMF, China PMIs fail to renew risk-on mood

Although the IMF revised its growth projections and tamed recession woes, it doesn’t refrain from showing the inflation woes and hence fails to serve the purpose. On the same line was the upbeat China PMI that jumped to the above 50 levels after multiple months but failed to bolster the market’s optimism. Additionally, the US administration’s readiness to rewind the Covid emergency and China’s hopes of an end of the virus wave also should have favored the risks but could not as fears ahead of the central bank releases are in the driver's seat.

Australia’s Retail Sales disappointed and joined the BoJ’s loan announcements, as well as signals for government intervention, to amplify the market’s fears. Furthermore, the sluggish yields and Wall Street’s downbeat closing also added strength to the risk-off mood.

Amid these plays, the US Dollar remained firmer and the Oil price dropped further but USDJPY managed to buck the trend.

Elsewhere, hopes of a clearer NFT framework contrast with the regulatory fears to probe the BTCUSD and ETHUSD buyers.

  • Strong buy: GBPUSD
  • Strong sell: ETHUSD, USDJPY
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

EU GDP, US Consumer Confidence in focus

The economic calendar gets populated as the weekdays rush towards the Fed, ECB and BOE bazooka. For today, the widely watched US CB Consumer Sentiment Index and Employment Cost Index will be observed closely for any signs of inflation peaking up while Germany’s downbeat GDP made the otherwise unimportant EU GDP a crucial for the EURUSD, of course ahead of the ECB’s verdict.

May the trading luck be with you!