DIFX Buzz: Here’s a weekly market recap for you to start your Monday with the top news of the week.
Let’s see what happened in markets this week:
Forex
❖ The BoJ seems to have selected their next Governor in the form of Kazuo Ueda, leaving many asking where he stands on the dovish-hawkish scale. He has recently stated his support for ultra dovish monetary policy which has incited bearish moves in Yen.
❖ GBP/USD seems to have broken the upward trend last week and is starting to look more bearish coming into this week. Traders will be wary of CPI data as this may pull the pair lower.
❖ The markets are reacting to news that the revised CPI data shows that it rose 0.1% in December as opposed to the initial release saying it fell 0.1% by turning bullish on the Dollar.
❖ US CPI (YoY) is forecasted at 6.2% and any reading higher than that will lift the Dollar to higher levels against all other assets.
Equities
❖ ChatGPT has sprung Chinese companies to work on competitive solutions for the AI chatbot. The tool has made it clear to the Chinese just how far behind they are from the US in terms of AI development as they rush to develop a contesting product.
❖ Meta is delaying budget plans as Facebook plans a new round of layoffs in the company. Meta has already let go of 11,000 employees at the end of last year.
❖Google’s head of Google Search has warned against “hallucinating” AI in chatbots. This is when the chatbot produces a convincing but completely made-up answer.
❖ Salcomp, an Apple supplier, has planned to double its workforce in India to 25,000 and set its target annual revenue to $2-3bn by 2025.
Crypto
❖ Binance USD which is issued by Paxos may be sued by the SEC for violating investor protection laws. The stablecoin has been reported as an unregistered security and has 30 days to provide factual information reflecting otherwise.
❖ Last year, the regulator published guidance to stable coin issuers which stated that these assets need to be fully backed by government-backed securities such as US Treasuries and Reverse Repos collateralized by Treasury notes or bills.
❖ The SEC is also targeting staking services in the US. Kraken, a well-known cryptocurrency exchange, just settled with the agency for $30 million and agreed to shut down its staking services in the US. A move that has put more downward pressure on the crypto market.
Commodities
❖ Oil is declining at the start of the week as investors predict a high inflation report which could force the Fed to tighten more aggressively. This will further weaken demand for Crude.
❖ Gold has opened the week lower. If there is any evidence that inflation is not slowing down at the rate previously priced-in, Gold positions will begin to see more downside moves.
❖ Copper has weakened for a 3rd straight week as Chinese demand is still low. Copper had hit a high of $9,550 in January but the market seemed to have acted prematurely as data has shown demand is still low.
❖ PetroChina has completed drilling Asia’s deepest vertical oil well. The well is located in the southwest of China and is 9,026 meters deep.
