- Indices attempt to move higher
- Strong US data help the dollar
- Silver prices tumble
Tuesday was very lively on the markets – indices were shaky in the morning but attempted a recovery during the US session. Investors relied on strong soft data from the US: consumer confidence moved to the highest level since August and Richmond Fed business activity indicator soared to 20 points (with the consensus at -3) – the highest level since September 2018! Furthermore, investors are looking forward to the series of quarterly reports. Today’s highlight is the report from Apple (AAPL.US) and with the situation in China likely to remain unresolved for many days, reports from tech giants could decide if this bull market could continue going forward. Investors are hoping for a solid report as Apple shares are gaining over 2% today. Names like Facebook, Tesla, Microsoft and Amazon will also report this week.
An improved sentiment helped drive CHF lower as safe-haven flows abated but the EURUSD failed to rebound from 1.10 due to strong US data. The British pound struggled against the greenback as CBI sales indicator failed to recover in January. There are many technical levels to be decided (1.10 on EURUSD, 1.30 on GBPUSD) and the FOMC meeting tomorrow could be the key here.
Oil prices staged a modest recovery as the mood improved and precious metals reversed. While a move lower on gold was moderate, silver prices literally tumbled to see the lowest level since 24 December! The sheer scale of the move with only a modest improvement in global sentiment suggests that some big trades hit the market and triggered stop losses. $17.75 support has been broken as a result and bulls need to see if there is a retest if $17.13 support zone. A lack of similar move on platinum seems to confirm that it was more a “fat finger” impact than a regular exodus of investors.
Silver prices crashed on Tuesday. Support zone can be spotted at $17.13. Source: xStation5
With the Apple report in the pipeline we are just entering the crucial stage of the week with reports from big US companies, the FOMC meeting, the Bank of England decision and crucial economic data (US and EMU GDP, German inflation, US PCE inflation). However, investors will need to split their attention as the virus scare is not going away until the number of infections keeps rising at a recent pace.
