Indices still within historical records

The Wall Street stock market started the week with little volatility. Although SP500 fell by 0,4 percent, Dow Jones by 0,2 percent. and Nasdaq Composite by 0,1%. but the indexes are still close to historical records.

In Europe, Dax ended the day unchanged and WIG20 lost approximately 0,5%. A large upward move took place in Bitcoin. The main cryptocurrency gained almost 5,8%. and this morning the increases continue. The EUR/USD rate gained, rising from 1,0815 to 1,086. Investors are waiting for Thursday's report on Americans' spending.

Will the Bank of Japan tighten its monetary policy?

Today's macro calendar, like yesterday's, will not be full of key macro data. The Bank of Hungary will decide on the level of interest rates. The ongoing process of disinflation is illustrated by the reduction in inflation in January to 3,8%. y/y indicates that a downward move of 100 bp is realistic. For the USA, we will learn about orders for durable goods (the forecast indicates a decline), as well as real estate prices in December and the Conference Board consumer sentiment index (the forecast indicates a similar value to the month before, i.e. 114,9 points).

Last night we learned inflation data from Japan. The core rate fell to 2% in January. y/y 2,3 percent (forecast 1,8%). The basic indicator decreased and reached the level of 2,2 percent, previously in December it was 2,6 percent. To some extent, the market still assumes that the Bank of Japan will tighten its monetary policy soon. Data for February will most likely indicate another increase, which will result from the fact that the anti-inflation shields implemented by the government last year are no longer effective. USD/JPY quotes they reached the technical resistance at 150,80 and are currently falling slightly. The upward trend line is being violated this morning.

Bitcoin in an upward trend

On Monday, we learned the opinions of several decision-makers European Central Bank. The Governor of the Bank of Greece (Y. Stournaras) indicated that June should be the moment to start easing monetary conditions in the euro zone. In turn, Lagarde (head of the ECB) again drew attention to the dynamics of wage growth. She stated that data for the first quarter may be crucial when it comes to the decision on rates.

Yesterday, the EUR/USD rate gained and reached a level close to 1,0860. Growth is arduous, the nearest technical resistance is the area 1,0885 – 1,09. This zone results from the peaks and troughs from the previous dozen or so weeks. The GBP/USD rate is still within the upper limit of the falling channel, which has been in place since the beginning of the year.

Price Bitcoin has grown significantly again. Yesterday the increases reached 5,8 percent, today the cryptocurrency is gaining over 2 percent again. There is an obvious upward trend, and the pennant formation formed in the second half of February effectively predicted the continuation of increases. The quotations are at their highest level since November 28, 2023 and are at USD 56.

Source: Łukasz Zembik, OANDA TMS Brokers