Market Commentary – February 8, 2022

Kevin Jock

8th February 2022

U.S. major equity indices all ended slightly lower by the end of Monday’s trading session, with Dow Jones remain completely flat. Investors are certainly adjusting expectations regarding Fed’s new movement of gradually ending its monetary support as well as the incoming rate hikes. Meanwhile, stock price of the fitness group Peloton rose dramatically by nearly 21%, followed by news of potential takeover talks between Amazon and Nike.

In contrast, European shares hiked marginally on Monday, driven by gains from the mining sector as it rose by 1.7% after positive comments from major commodity importer China, which has pushed up metal prices. FTSE 100, CAC 40 and Dax indices all rose by 0.76%, 0.83% and 0.71% respectively. ECB president highlighted that they are open to lift rates in 2022 during yesterday’s meeting.

In Asia, both the Australian ASX 200 and Japan’s Nikkei 225 indices went up by 1.21% and 0.43% respectively during today’s morning session. While HK’s Hang Seng index and mainland China’s major indices all dipped drastically. On the other hand, the U.S. Justice Department on Monday charges against China-based telecommunications company Hytera, accusing them of stealing U.S. corporation’s digital mobile technology.

Oil prices eased on Tuesday morning with WTI crude oil price currently at $91.3 per barrel. Gold price remains rather resilient and continue to rise to settle at $1820.34 yesterday. Such strength is due to investors fear about inflation levels as well as geopolitical risks in Easter Europe. Bitcoin prices continue to surge to past $44K level, to a four-week high after climbing for a second consecutive session.

image_2022_02_08T05_44_25_394Z

Figure 1 (Source: IS Prime) USD/RUB Daily : Rising geopolitical tensions spur Russian Ruble repatriation as the nations currency rallies against the US dollar.

Headliner to Review

  • Caixin China Services PMI figure announced to be 51.4, which indicates a continued expansion at the start of 2022, however, growth momentum has slowed due to the increase of virus cases and relevant measures to stop the spread of the pandemic, as such growth figure is lower compared to the previous month of 53.1.
  • Unemployment rate in Switzerland turns out to be better than forecasted figure, dropped to 2.3% compared to 2.4% from last month.

Headliner to Watch

  • U.S. crude oil inventories is due to release tomorrow, with previous week’s figure of a decrease by 1M barrels.
  • Italian industrial production figure is expected to decline by 0.8%.

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Authors:
Antony Tan
Kerry Man