Morning wrap (01.02.2022)

• US indices booked another session of solid gains. S&P 500 gained 1.89%, Dow Jones moved 1.17% higher, Nasdaq surged 3.41% and Russell 2000 jumped 3.05%

• Stocks in Asia followed into footsteps of US peers, although the scale of gains was much smaller. Nikkei gained 0.3% while S&P/ASX 200 added 0.5%. Liquidity was limited due to Chinese Lunar New Year

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

• The Reserve Bank of Australia left interest rates unchanged and decided to terminate the QE programme on February 10. Decision was in-line with expectations. RBA repeated that there is no need to raise rates in the near future. AUD weakened

• Australian retail sales dropped 4.4% MoM in December (exp. +3.9% MoM)

• Japanese manufacturing PMI jumped from 54.3 to 55.4 pts in January (exp. 54.6)

• Cryptocurrencies are trading slightly higher today. Bitcoin climbed above $38,000 while Ethereum trades above $2,700

• Precious metals gain with gold climbing back above $1,800 per ounce

• Oil trades slightly higher while agricultural commodities trade flat

• EUR and NZD are the best performing major currencies while AUD and USD lag the most

AUD took a hit after RBA announced end of QE and signalled no eagerness to hike rates quickly. AUDJPY dropped below the short-term support zone at 81.07 following the decision but has managed to recover quickly afterwards (orange circle). Source: xStation5