English
25
Jan

Tesla and IBM Earnings, BoC Rate Decision

calendar 25/01/2023 - 08:40 UTC

Cryptos were mostly trading weaker with Bitcoin again falling below $23k, while steeper losses could be seen among other coins like Ethereum, Cardano and Dogecoin. With this the Bitcoin/Ethereum rate climbed to the highest level in more than two months. The total estimated crypto market cap remains above one trillion dollars.

U.S. market indices US 500 and US Tech 100 traded lower on Tuesday, while the US 30 index managed to closed with a moderate upside. Over in Europe markets moved overall sideways. Only small gains were seen in indices like the France 40 and Spain 35 as well as a small retracement by the morning hours on Wednesday. Asian markets including the Japan 225 Yen and China A50 meanwhile started to trade again higher during the night hours with the retracement in the morning not fully erasing those gains.

On Wednesday the Bank of Canada (BoC) is set to announce its monetary policy decision. While most expect that another 25 bp hike could be announced, there seems to be a lack of clear consensus among analysts about such a move.

EUR/USD

The EUR/USD maintained its positive sentiment despite the dollar overall stabilising against other major currencies. Though the pair could not break above 1.09 after trading only for some hours above that threshold on Monday. The euro itself continued to appreciate also against almost all other majors with the exception of the strong Australian dollar (AUD).

PMI data released on Tuesday was overall positive with the service PMI for both Germany and the eurozone moving above the critical threshold of 50, which indicates that the overall sentiment among purchase managers is rather positive than negative with the PMI at 50.4 for Germany and 50.7 for the eurozone. On the other hand the manufacturing PMI remains still below 50 with the one for Germany even deteriorating from 47.4 in the previous reading to 47.0.

On Wednesday the Ifo business conditions survey results will be published. Indicators were overall improving when the results were last time published.

EUR/USD

Gold

Gold price remain elevated on a weekly basis after reaching once again a new high since April 2022 on Tuesday. Mixed sentiment could be observed in other precious metal markets with silver making only a small recovery compared to the steep losses accumulated on Monday, while palladium completely recovered and the platinum trades up on a weekly basis.

Gold

WTI Oil

Oil prices reversed lower with WTI crude oil trading for the first time trading this week at times below $80 for a barrel, while closing the day 1.8% lower. Prices declined from the afternoon with most of the losses already accumulating before the release of the Weekly Statistical Bulletin by the American Petroleum Institute (API). The API data showed that once again stockpiles were up, this time by 13 million barrels for crude oil. At the same time gasoline stockpiles also rose by 0.6 million barrels while distillate inventories declined by 1.9 million barrels.

On Wednesday similar type of data will be published as usual by the Energy Information Administration (EIA) in its Weekly Petroleum Status Report.

WTI Oil

US 500

Major stock market indices like the US Tech 100 and US 500 closed lower on Tuesday, though on a weekly basis both indices remain still clearly in the green given the strong performance on Monday and the US 500 so far also defended the 4,000-level.

3M (-6.23%) was the single worst-performing stock included in the S&P index on Tuesday. The company’s earnings of $2.28 were clearly lower compared to the same quarter of last year and the company announced it would cut 2,500 manufacturing jobs following a slowdown in demand.

Raytheon Technologies (+3.37%) was meanwhile one of the best-performers driven by a strong growth in revenue to $19 billion as well as an increase in order backlog by 11% to $150 billion driven by increased government spending over the conflict in Ukraine.

In the extended session Microsoft initially jumped higher by around four per cent following the earnings release. While revenue and earnings were close to the expected results, the growth of the cloud segment Azure amounting to 38% was still a positive surprise for investors. Gains however reversed later on, once the company’s CFO mentioned to investors in the following conference call that sales in the current quarter will come in lower by at least one billion dollars compared to investors’ expectations.

The earnings season continued with US Bancorp, Tesla, IBM and others publishing their respective quarterly results on Wednesday.

US 500

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