23/01/2025 - 08:43 UTCThe US dollar posted a mild recovery against most major currencies on Wednesday, with the dollar index (USDX) up by 0.26%, amidst rising US Treasury yields, and a delay in tariff announcements which is fuelling some tentative optimism.
The yen edged lower against the dollar on Wednesday, on concerns over new U.S. tariffs under Donald Trump’s administration, while attention shifted to the Bank of Japan’s policy meeting set to begin later in the day. The Bank of Japan (BoJ) is anticipated to increase interest rates at the conclusion of its two-day policy meeting on Friday. This expectation stems from recent economic data, including inflation and wage figures.
Wall street sentiment appears improved, with the main U.S. stock indices posting a series of daily gains in the past week. Strong support was provided by Netflix, as the stock soared nearly 10% following the company's announcement of a record-breaking 19 million new subscribers in the fourth quarter of 2024, significantly exceeding Wall Street's forecasts. In addition, several AI related stocks helped boost sentiment, after President Trump, Softbank, OpenAI and Oracle unveiled a $500 billion joint venture, named Stargate. This collaboration among tech giants involves an initial investment of $100 billion, with plans to allocate up to $500 billion over the next four years.
On the cryptos front, Bitcoin experienced a decline on Thursday following a brief surge fueled by anticipation of more favorable cryptocurrency regulations with Trump as President. This optimism stemmed partly from the Securities and Exchange Commission's announcement of a task force to guide crypto regulation under its new leadership. However, the market's enthusiasm waned as no executive orders specifically addressing crypto were issued in Trump’s first few days in office.
For Thursday markets will most likely be focusing on Canada’s Retail Sales numbers, U.S. Jobless Claims, and a speech by President Trump at the World Economic Forum Annual Meetings. For the week ahead markets attention could turn to the U.S. Flash Manufacturing and Flash Services PMIs, the University of Michigan revised consumer sentiment survey and existing home sales.
The EUR/USD currency pair ended the session on Wednesday almost unchanged as markets navigated a period of low activity between pivotal economic data releases. U.S. President Donald Trump has taken a temporary pause from his usual trade war commentary and tariff threats, leaving investors with little fresh impetus for market movement.
Thursday's economic calendar is similarly light, with no major data releases, and the U.S. Federal Reserve has entered its customary blackout period ahead of its upcoming rate decision next week. Meanwhile, the European Central Bank (ECB) has little new to offer in terms of market-shifting commentary. ECB President Christine Lagarde made a public appearance on Wednesday, but her remarks largely failed to garner market attention.
Gold prices advanced over 0.40% on Wednesday driven by heightened geopolitical uncertainty. U.S. President Donald Trump has escalated his trade rhetoric, expanding his focus from Mexico, Canada, and China to the Eurozone. This has fueled concerns among investors, prompting increased demand for the non-yielding safe-haven asset.
Geopolitical developments have also added to market uncertainty. In a post on Truth Social, President Trump signaled his desire to see an end to the Russia-Ukraine conflict, urging Russian President Vladimir Putin to pursue peace. Trump also warned of potential tariffs, taxes, and sanctions on Russian imports if the war continues.
Oil prices declined to a fresh one-week low on Wednesday as markets assessed the potential impact of U.S. President Donald Trump’s proposed tariffs on global economic growth and energy demand.
President Trump announced plans to impose a 10% tariff on Chinese imports starting February 1, alongside a proposed 25% levy on goods from Mexico and Canada. He also hinted at potential tariffs on European imports and warned of additional sanctions on Russia if it fails to broker a peace deal in the Ukraine conflict.
Market analysts project a 1.6 million-barrel drop in U.S. crude stockpiles for the week, based on data expected from the American Petroleum Institute (API) and the EIA. If accurate, this would mark the ninth consecutive weekly drawdown, the longest streak since January 2018.
U.S. stock index futures ended the session with gains on Wednesday buoyed by Netflix's robust earnings and optimism surrounding President Donald Trump’s ambitious AI investment initiative.
Netflix Inc. shares soared nearly 10% on Wednesday after the streaming giant reported a remarkable 19 million new subscriber additions in Q4 2024, surpassing Wall Street's expectations. Revenue rose to $9.5 billion, an 8% increase year-over-year, while net income grew 12% to $915 million.
AI-related stocks saw strong gains after President Trump unveiled a $500 billion public-private partnership named "Stargate."
Investors are now focused on corporate earnings and bracing for potential market volatility driven by Trump’s forthcoming policy announcements.
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