US Indices were broadly lower to end the week, although the tech-heavy NASDAQ 100 was the sole index in the green and supported by gains in NVIDIA (+1.5%) after China informed the biggest tech firms that they can prep orders for H200 chips. However, Intel’s (-17%) plunge after weak guidance capped gains. Sectors were mixed, as Financials and Industrials lagged, while Energy was the outperformer and buoyed by strength in the crude complex, given the US’s continued punchy rhetoric surrounding Iran. In addition, the US/Russia/Ukraine have commenced their trilateral meeting, albeit concluded for the day, and Zelensky said it is still too early to draw conclusions and will see how the conversation develops tomorrow and what results it produces. Despite the above, the main story was in the FX space as the Japanese Yen saw notable strength as the USD/JPY retraced from a high of 159.226 to a low of 155.68. On Friday morning, there was a slightly hawkish vote split from the Bank of Japan where 8 voted for hold, Takata voted for a 25bps hike), and speculation over FX intervention followed. A few important events followed the decision. 1) Governor Ueda said they must pay attention to even small FX moves, 2) Finance Minister Katayama said they are watching FX moves with a high sense of urgency, and 3) A sharp bout of JPY strength in Ueda’s conference. All this combined led markets to believe intervention was possibly at play; however, desks note the size of the move and timing (amid Ueda press conference) likely diminishes it being the case. Thereafter, the Yen once again saw sharp appreciation, albeit over a couple of hours, on a lack of headline newsflow. Elsewhere in the FX space, all majors benefited against the US Dollar. Despite the moves in the Dollar, T-Notes saw slight weakness in thin parameters ahead of the FOMC next week. Precious metals (XAU, XAG) saw strength amid possible diversification away from the Dollar, and saw spot silver top USD 100/oz and spot gold edged towards USD 5000/oz. Manufacturing PMI printed 51.9 in January from 51.8, beneath the expected 52.0. Services fell short of the expected 52.8, as it was unchanged at 52.5 from December’s 52.5. This left the composite at 52.8, up from 52.7. Employment rose slightly, with the near-stalled job market reflecting concerns from companies over rising costs and softer sales growth in recent months. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, wrote that “The survey is signalling annualised GDP growth of 1.5% for both December and January, and a worryingly subdued rate of new business growth across both manufacturing and services adds further to signs that Q1 growth could disappoint”. The University of Michigan final data for January was strong and revised up across the board, highlighted by sentiment at 56.4 from 54.0, conditions at 55.4 (prev. 52.4), and forward-looking expectations lifting to 57.0 from 55.0. Inflation expectations saw the short-term 1 year ahead falling to 4.0% from 4.2%, with the longer-term 5 year inching up to 3.3% from 3.2%, but beneath the expected 3.4%. Surveys of Consumers Director Joanne Hsu remarked that while the overall improvement was small, it was broad-based, seen across the income distribution, educational attainment, older and younger consumers, and Republicans and Democrats alike. Despite saying that, Hsu adds, national sentiment remains more than 20% below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets. Elsewhere, Gold surged, ending Friday’s session with a 1.6% gain while Oil ended a volatile trading session with a 3% gain.
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For anyone following my Platinum Service it made 445 points on Friday and is now ahead by 4432 points for January having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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