Home » Today’s Stock Exchanges, February 6th. Fears for the Fed and US-China tensions stun the markets

Today’s Stock Exchanges, February 6th. Fears for the Fed and US-China tensions stun the markets

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Today’s Stock Exchanges, February 6th.  Fears for the Fed and US-China tensions stun the markets

MILANO – Western markets are uncertain at the starting blocks of the week. Friday’s US jobs report – well beyond expectations but, it must be said, in a month usually marked by statistical revisions – nonetheless fueled concerns that the Fed still needs to act vigorously on rates to slow the US engine, turn off the race of wages and therefore of inflation in general. The value of the dollar against a basket of rival currencies rose 1% on Friday and is continuing to appreciate, while Asian stocks traded lower. Also exacerbating market sentiment is the US-China tension around the alleged surveillance balloon that was shot down on Biden’s orders. As analyst Willer Chen told Bloomberg, “the episode risks coming as a serious surprise to investors, given that markets previously expected an improvement in relations” between the two superpowers in light of “Blinken’s visit” now cancelled. Tokyo made history in its own right, closing up 0.67%: press rumors see Masayoshi Amamiya, the deputy of number one Haruhiko Kuroda, as the next BoJ summit. For the markets, it would be a sign of continuity of the accommodative policy.

Key points

  • Start in red for the EU stock exchanges
  • Weak Asian stocks. Tokyo rises on BoJ rumors

Down gas in Amsterdam

Lower opening for natural gas on the TTF square in Amsterdam. Futures contracts for the month of March drop 1.53% to 57.01 euros per MWh.

Start in red for the EU stock exchanges

The European stock markets start the week in the red, held back by fears that the expected ‘pivot’, i.e. the change of course of the Fed’s monetary policy, will still be far away. Data above expectations on the number of jobs created in January in the United States , have rekindled worries of further rate hikes. Investors await the words of the Fed chairman Jerome Powell, who will speak tomorrow at the Economic Club of Washington, to understand whether or not he will confirm the shift towards a less aggressive approach. The Paris Cac index dropped 0.87% to 7,170.78 points, Frankfurt’s Dax 30 fell 0.74% to 15,362.03 points and London’s FTSE 100 lost 0.56% to 7,857. 70 points. In Piazza Affari, the Ftse Mib leaves 0.55% on the ground.

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Future in calo per Wall Street

Futures indices fell on Wall Street after closing in the red last Friday caused by disappointing quarterly reports and above-expected data on the number of jobs created in January, which rekindled fears of further rate hikes. Investors await the words of Fed Chairman Jerome Powell, who will speak tomorrow at the Economic Club of Washington, to understand whether or not he will confirm the shift towards a less aggressive monetary policy. Dow Jones futures fell 0.29%, Nasdaq futures fell 0.44% and S&P 500 futures fell 0.40%.

Currencies, the dollar advances after the report on US jobs

The euro opens slightly against the dollar below 1.08. The greenback advanced after a better-than-expected US labor market report rekindled fears that the Federal Reserve could remain hawkish for longer. The single currency changed hands at 1.0789 dollars and at 142.30 yen. The Japanese currency was hit by the news, later denied by the government, according to which the executive had offered the post of governor of the central bank to Masayoshi Amamiya, the deputy of number one, Haruhiko Kuroda, whose mandate was about to expire. This leak prompted investors to speculate that the BoJ’s easing policy could continue longer than expected. The yen retreated to 131.90 to the dollar, after hitting a three-week low of 132.60 at the start of the session.

Oil up in Asia

Oil prices edged higher in Asian markets after last week’s 8% drop. Yesterday the embargo on Russian refined petroleum products was triggered, following the European ban on the import of Moscow crude oil, which came into force on 5 December as a sanction for the attack on Ukraine. The risk is that this ‘stop’ could push fuel prices up again. Fears that slowing growth in major economies could limit fuel consumption have outpaced signs of a recovery in demand in China, the world‘s largest oil importer. Futures on WTI rose by 0.30% to 73.58 dollars a barrel while those on Brent rose by 0.10% to 80 dollars a barrel.

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Weak Asian stocks. Tokyo rises on BoJ rumors

Asian stock exchanges are all down, except Tokyo, in the wake of Wall Street which closed the last session of last week in the red due to the disappointing quarterly results and after the above-expected data on the number of jobs created in January, which have rekindled fears of further rate hikes. Chinese markets are down. China on Friday announced it will fully reopen its borders with Hong Kong and Macau starting today after a long lockdown due to the pandemic, ending day traveler quotas and mandatory Covid testing. In Hong Kong, the Hang Seng index falls almost 2%, in Shanghai, the composite index falls by 0.79% while Shenzhen loses 1.79%. The Kospi of Seoul marks a 1.18%.

Bucking Tokyo which ended trading up 0.67% to 27,693.95 points on the news, later denied by the government, according to which the executive offered the post of governor of the central bank to Masayoshi Amamiya, the deputy of number one, Haruhiko Kuroda, mandate expiring. This leak prompted investors to speculate that the BoJ’s easing policy could continue longer than expected.

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