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Over in the US today, stocks closed higher as investors digested Fed Chair Jerome Powell’s speech to gain insight into just how long the Fed will continue raising interest rates to tackle inflation in the US. Jay Powell once again made dovish comments in his speech, reassuring markets that the disinflationary pressures have begun, particularly in the goods sector, while also saying that the Fed has the strategy in place to bring down inflation to its target 2%. At the same time, Jay Powell acknowledged the robust January jobs report but mostly shrugged it off.
Stocks recovered from an early sell-off after Powell’s speech, with the Dow Jones closing Tuesday’s session up 0.8%, the S&P500 adding 1.29% and the tech-heavy Nasdaq jumped 1.9%.
US trade balance data for December was also released yesterday showing the US trade deficit widened to US$67.4bn in December, the lowest level since September 2020, and down from US$61bn in November. Exports in the region fell 0.9% for the month while imports rose 1.3%.
In Europe, markets closed mostly lower as investors look to the latest slew of economic data and interest rate outlook. The euro zone PMI index showing business activity in a single currency returned to growth in January for the first time in 6-months, while the US jobs report last Friday came in much stronger than expected. Germany’s DAX fell 0.16%, the French CAC fell 0.07% and, in the UK, the FTSE100 rose 0.36%.
On the commodities front, oil is trading 3.5% HIGHER at US$76.71/barrel, gold is down 0.51% at US$1877.39/ounce and iron ore is down 0.8% at US$125.50/tonne.
What to watch today: