Morning wrap (23.01.2023)

• Indices from Asia-Pacific traded higher today with Nikkei gaining 1.4%, S&P/ASX moving 0.1% higher and Nifty 50 adding 0.6%. Overall, liquidity conditions were thin as traders from China, South Korea and Singapore were off for holidays

• DAX futures point to a higher opening of the European cash session today

• US index futures trade slightly above Friday's closing prices

• Wall Street Journal reports that Fed is likely to deliver a 25 basis point rate hike when it announces its next decision on February 1, 2023 rather than go with a 50 basis point rate hike

• ECB's Knot said that 50 basis point rate hikes are base case scenario for February and March meeting and more rates hikes will follow later

• ECB's Rehn said that he sees case for significant rates hikes this winter and spring

• According to Bank of Japan minutes, one BoJ member said the decision to widen the tolerance band around target yield from 0.25 to 0.50% is inappropriate. However, the decision was ultimately unanimous

• JPMorgan said that risk of US recession has fallen sharply and the Bank said that its model now show less than 50% chance of a recession

• Cryptocurrencies trade hgiher, benefiting from an overall improvement in moods. Bitcoin gains 0.4%, Ethereum adds 0.5% and Dogecoin jumps 2.4%. Moonbeam adds 3.8%

• Oil trades around 0.4% lower on the day while US natural gas prices jump 4.5%

• Precious metals are trading lower at the beginning of a new week - gold and platinum drop 0.3% while silver trades 0.4% lower

• EUR and CHF are the best performing major currencies while JPY, USD and NZD lag the most

Nasdaq-100 (US100) is trading little changed at the beginning of a new week. Index rallied at the end of the previous week but has failed to extend gains today, even as WSJ reported that Fed may slow the pace of rate hikes. US100 is testing resistance zone marked with 61.8% retracement of the downward move started in mid-December 2022. Source: xStation5