empty
07.02.2022 10:50 AM
Good US employment data will slightly calm the markets

Positive mood prevailed last Friday after the disappointment on Wednesday, which was caused by the negative ADP report on the number of new jobs in the US in January and the collapse of Meta (Facebook) shares amid negative corporate reporting for the 4th quarter. However, optimism is not seen in all markets and not for all.

Let's start with the results of the ECB meeting. The European regulator expectedly left all the parameters of monetary policy unchanged, and so, all the attention of investors was drawn to the speech of the bank's chairman C. Lagarde. She was expected to comment on the Eurozone's inflation growth to the level of 5.1% and what the Central Bank would do in this regard. The ECB President did not specifically say in her speech that rising inflation would lead to a mandatory increase in interest rates, but the tone and high concern about rising inflation was perceived by the market as a signal for an early rate hike.

On this wave, the euro received the strongest support and increased in pair with the US dollar to a local high of 1.1480 on January 14. At the same time, the local stock market was under pressure, which caused the European stock indices to fall. The actual change in mood may put some pressure on European stocks shortly, but not on everything. First of all, the shares of companies in the financial and banking sectors will receive support. The expectation of an increase in the cost of borrowing by the ECB will stimulate demand for these securities, since an increase in rates will lead to an increase in interest on deposits and similar things, generally increasing the incomes of these companies.

The next news is the publication of several new jobs in the US from the Department of Labor. The data turned out to be noticeably higher than the forecast, showing an increase in January by 467,000 against the forecast of 150,000. In addition, the upward revision of December values to 510,000 should be considered positively. And although the unemployment rate rose to 4.0% from 3.9%, it did not have a significant negative impact on the markets.

The US stock market received strong support amid employment figures, which led to a halt in sales and the growth of stock indices. Apparently, these positive sentiments will continue today. This is indicated by the dynamics of futures on the main US stock indices, which are confidently trading in the "green" zone.

Today, important economic data are not expected to be published. But among the events, we can single out the expected speech of the ECB Chairman, C. Lagarde.

Analyzing the current situation, we believe that investors will focus again on the coming corporate reports of companies, and if it is generally positive, it may push up the demand for risky assets and lead to the recovery of stock indices that declined last week. If the situation develops in this way, it will be possible to assume a recovery in demand for commodity assets following the shares of companies, as well as a slight correction in the currency market towards the strengthening of the US dollar. The main reason for this may be the publication of new US inflation data, which may rise again.

Forecast of the day:

The EUR/USD pair is trading below the level of 1.1480 and never got above it. This week's US data on rising inflation may push the pair below this level and lead to a correction to the level of 1.1380.

This image is no longer relevant

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Whole World is a Stage, and Countries Are Its Actors... (A Limited Decline in Gold and a Rise in Bitcoin Are Possible)

Iran responded to the U.S. with a strike on an American military base in Qatar, thereby demonstrating its resolve for retaliation and confrontation. Markets reacted in a rather peculiar

Pati Gani 09:25 2025-06-24 UTC+2

The Market Has Moved On From the War

Does Iran want war? Judging by the symbolic attack on American bases in Qatar, Tehran does not appear eager to enter into an armed conflict with Washington — which

Marek Petkovich 07:19 2025-06-24 UTC+2

What to Pay Attention to on June 24? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Tuesday, and none are of significant importance. Essentially, the only one worth mentioning is the German Business Climate Index —

Paolo Greco 07:19 2025-06-24 UTC+2

GBP/USD Overview – June 24: No Confirmation of Destruction

The GBP/USD currency pair also traded relatively calmly on Monday. While there were some price "swings," many traders and analysts had expected a much more significant move. The dollar strengthened

Paolo Greco 03:45 2025-06-24 UTC+2

EUR/USD Overview – June 24: Iran Exits Talks and Launches a Retaliatory Strike

The EUR/USD currency pair traded extremely calmly on Monday, considering the intense fundamental backdrop that developed over the weekend. Recall that over the weekend, Donald Trump once again "changed

Paolo Greco 03:45 2025-06-24 UTC+2

Trump Keeps Hitting a Wall

There's a saying: "An irresistible force meets an immovable object." It describes an irreconcilable standoff where neither side is willing to compromise. In my view, Trump's "scythe," with which

Chin Zhao 00:12 2025-06-24 UTC+2

Should We Expect De-escalation in the Middle East?

The market has absorbed the news of U.S. strikes on Iran's nuclear facilities quite resiliently. Why did this happen, and why was the reaction relatively muted? These questions are unlikely

Chin Zhao 00:12 2025-06-24 UTC+2

What Will Powell Say?

Starting June 24, Fed Chair Jerome Powell will address Congress over two days, delivering the semiannual monetary policy report. On Tuesday, he will speak before the Senate Banking Committee

Irina Manzenko 00:12 2025-06-24 UTC+2

The Euro Gets a Knife in the Back

Trouble never comes alone. European industry is beginning to lose steam after rapid growth driven by a front-loaded surge in U.S. imports. The euro area is a net oil importer

Marek Petkovich 00:11 2025-06-24 UTC+2

XAU/USD. Analysis and Forecast

Today, gold is attracting new sellers. Amid a sharp escalation in the conflict between Iran and Israel, the United States conducted airstrikes on three Iranian nuclear facilities in Fordow, Natanz

Irina Yanina 17:59 2025-06-23 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.