Morning Recap Friday 4 February 2022
Global Markets Update
U.S. MARKETS
Equity markets closed lower overnight, with the S&P 500 down -2.4%. NASDAQ down -3.7% and Dow Jones declining -1.5%. After data revealed growth in U.S. services sector pulled back in January to the slowest pace in nearly a year. As a surge in Covid-19 cases and lingering supply constraints weighed on business activity. Applications for U.S. state unemployment insurance fell for a second week in the week ended January 29, with initial unemployment claims decreasing by 23,000 to 238,000.
Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 1.202% and the 10-Yr yield at 1.836%.
EUROPEAN MARKETS
European equity markets closed lower overnight, with Stoxx Europe 600 down -1.8%, after ECB kept deposit rate unchanged at -0.5%, however, President Christine Lagarde no longer ruled out an interest-rate hike in 2022, with policy makers agreeing that it’s sensible no longer to exclude a rate move in 2022 and a shift in policy guidance should materialize as soon as next month with bond buying expected to end in 3Q22. The U.K. FTSE 100 declined -0.7%, after BOE raised its key interest rate by +25bps to 0.5% andand signaled it would start running down bond holdings, in a bid to contain the fastest inflation in three decades, predicting inflation will peak at 7.25% in April vs prior forecast of 6%, more than triple the BOE’s 2% target, with Chancellor of the Exchequer Rishi Sunak also announcing a 9bn pound program to help consumers shoulder rising energy bills. German DAX declined -1.6%.
ASIAN MARKETS
Asian equity markets closed mixed overnight, with Nikkei 225 down -1.1%. KOSPI up +1.7% and both the Hang Seng and Shanghai Composite remaining closed for a holiday.
WTI oil is trading at US$90.11 a barrel. Iron ore price is at US$127.33 per ton. Spot gold is trading at US$1,805 per oz.
