- European equities closed higher
- Wall Street erased early losses after Powell comments
- Powell predicts a “long road to normal” in monetary policy.
Major indices from the Old-continent finished today's session higher after three days of losses. Technology sector rebounded and investors welcomed upbeat corporate updates from Delivery Hero and HelloFresh which announced a share buyback program of up to €250 million. Elsewhere, ECB chief economist Philip Lane said he does not see prices above the 2% target in the medium term, while new Bundesbank President Joachim Nagel expressed concerns about the spike in inflation, challenging the central bank's narrative that the current price pressure is temporary. DAX 30 rose more than 1.0%, while other European bourses gained between 0.6% and 1%.
US indices managed to erase early losses following the Powell hearing. Fed’s chairman said that there will be a long road to normal and that the balance sheet should runoff later this year, while the impacts of the covid-19 on the labor market may be short-lived. Still, inflation worries remain and the Fed will keep adopting the necessary measures to tame the sharp increase in prices. The US core CPI which is due for release on Wednesday is expected to have risen by 5.4% in December, its highest in decades, and up from 4.9% in the previous month. The 10-year Treasury yield stabilized around 1.75%, which is the highest since January of 2020.
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Create account Try a demo Download mobile app Download mobile appUpbeat moods prevail today in most commodity markets. Precious metals prices are appreciating, helped by Powell remarks and weak dollar. Gold is testing $1,820.00 level while silver jumped to $ 22.75 level. WTI oil surged over 3% and tested $81.00 level while Brent broke above $83.50 after falling in the previous two sessions as investors await inventory reports from the API later in the day.
Slightly better moods can also be spotted on the cryptocurrency market today. Bitcoin price bounced of $41 500 support and is currently trading around $42 600, while Ethereum is testing $3250 level.
Gold strengthened today thanks to a weaker dollar. Looking at the M30 chart, the buyers used the $ 1,802 zone as a support and managed to break above the upper limit of the ascending channel, which could open the way towards the $ 1,830 resistance zone. Source: xStation5
