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SOUTH KOREA INFLATION STEADY AT 5.0%

South Korea's consumer price inflation remained unchanged in December, figures from Statistics Korea showed on Friday.

Consumer prices rose 5.0 percent year-on-year in December, same as seen in November. This was in line with economists' expectations.

Excluding food and energy, core consumer prices rose 4.1 percent annually in December, after a 4.3 percent increase in the previous month.

On a monthly basis, consumer prices increased 0.2 percent in December, following a 0.1 percent drop in November.

Compared to the previous month, the core CPI remained unchanged at 0.3 percent in December.

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USD/JPY: the dollar has lost control

At the beginning of the new year, the USD/JPY pair is still in a bearish trend. Every day the quote is going deeper to the south, hitting one after another multi-month lows. However, analysts believe it is still far from the bottom. This morning, the dollar-yen asset showed another resounding drop. The major lost about 160 points in just a couple of hours, bringing it to its lowest level since June at 129.79. The sharp drop to the 6-month low was due to growing expectations regarding the possible pivot of the Bank of Japan.

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Another surge of speculation on the subject came after Japan's Nikkei reported Saturday that the BOJ might revise its inflation forecast upward in January.

If the BOJ does indeed raise its consumer price growth forecast for 2023, it would further bolster traders' view that the central bank may soon be on a hawkish track.

Recall that the BOJ is the only major central bank in the world that still maintains an ultra-loose policy and keeps interest rates ultra-low.

In contrast to the BOJ, last year the US Federal Reserve took a sharp course towards tightening. This led to strong monetary divergence between the central banks, which weighed heavily on the JPY.

In October 2022, the JPY fell against the dollar to a 32-year low of 151.95. However, since then the Japanese currency has strengthened against its U.S. counterpart by more than 16%.

In November, USD/JPY was down 8.5% as traders had concerns about the slowdown in interest rate hikes in the US.

Last month, the yen gained more than 5% against the dollar. The main driver of its growth was the BOJ's surprise tweak to its bond yield control.

The BOJ's decision to allow 10-year bond yields to fluctuate by plus or minus 0.5 percentage points of its 0% target level was acknowledged by the market as the central bank's first step towards its monetary-policy normalization.

As we can see, now the fundamental picture, which favored the dollar's growth in 2022, is starting to change gradually in favor of the yen.

The Fed has already slowed the pace of its tightening, when it delivered a smaller rate hike of just 50 bps in December following four straight 75 bps hikes. At this stage, most traders tend to further reduce the degree of aggressiveness.

Meanwhile, the market is expecting hawkish actions from the BOJ. Many investors believe that BOJ will abandon its soft course in the second quarter of the year, after the current head of the central bank Haruhiko Kuroda will leave his post in April.

"I would expect an end to negative rates by April. This further removes obstacles for the yen to strengthen more," said Rajeev De Mello, a global macro portfolio manager at GAMA Asset Management.

According to the expert, at the moment the Japanese currency is significantly undervalued compared to its fair levels, which indicates its high growth potential.

Recall that recently former Japanese Vice-Minister of Finance Eisuke Sakakibara, known as "Mr. Yen", said in an interview last month that the yen may appreciate to 120 per dollar this year.

Generali Investments and Jupiter Investment Management have also flagged the same level as the next potential bearish target.

As for the near-term outlook, this week the quote is likely to keep its downtrend, unless, of course, the dollar bulls get some super-powerful trigger.

One of the catalysts for the pair may be tomorrow's release of the minutes of the Fed's December meeting. Traders hope the FOMC minutes will shed light on the future trajectory of interest rates in the US.

If the market views the Fed's rhetoric as hawkish, it will help the dollar recover its recent losses against the yen. Otherwise, the USD/JPY pair risks to collapse even more.

Also, this week investors will focus on the US jobs report, which will be released on Friday.

Positive data might push up the dollar in all directions, including the USD/JPY pair, whereas negative data will push the greenback even higher, which will raise the demand for the yen.

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OIL FUTURES SETTLE SHARPLY LOWER ON RECESSION FEARS

Oil prices fell on Wednesday, extending recent losses, as worries about energy demand amid rising fears of a global recession continued to weigh on the commodity.

West Texas Intermediate Crude oil futures for February ended down $4.09 or about 5.3% at $72.84 a barrel, the lowest settlement in more than three weeks.

Brent crude futures were down $4.10 or almost 5% at $78.00 a barrel a little while ago.

China's decision to increase export of refined oil products has fueled concerns of weaker demand in the country.

Meanwhile, Japan has announced that it would tighten borders controls for travelers from China, in response to a surge in Covid cases among visitors.

Traders also took note of comments from former New York Federal Reserve President William Dudley, who said a recession in the U.S. is likely because of what the Fed has to do.

Traders are looking ahead to weekly inventory reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API's report is due later today, while EIA's inventory data will be out Thursday morning.

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CHINA SERVICES ACTIVITY LOGS FOURTH CONSECUTIVE CONTRACTION

China's service sector shrank for the fourth consecutive month in December as the ongoing measures to contain the Covid-19 disrupted operations and hampered demand.

At 48.0, the Caixin services Purchasing Managers' Index rose from a six-month low of 46.7 in November, survey results from S&P Global showed Thursday. But a reading below 50.0 suggests the sector remains in the contraction zone.

The Covid-19 containment measures, including temporary business closures dampened production.

Further, due to pandemic related restrictions, outstanding business increased for the fifth consecutive month as firms were unable to work through backlogs of work.

Cost reduction policies together with voluntary leavers drove another fall in service sector employment. The pace of job shedding was quicker than seen on average in 2022.

On the price front, the survey showed that input cost inflation slowed to a six-month low. Consequently, firms raised their own charges at the softest pace since August. Another reason for the easing in output price inflation was stiff competition.

Optimism among service providers was the strongest since July 2021. Companies that foresee higher output expect the pandemic situation to improve, restrictions to ease, and operations and demand to recover.

The overall private sector that combines manufacturing and services shrank for the fourth straight month in December. But the rate of contraction eased with softer falls in output across manufacturing and services.

The composite output index picked up to 48.3 in December from 47.0 in November.

Infections are expected to explode in the short run, which will disrupt production and everyday life, Wang Zhe, a senior economist at Caixin Insight Group said. "How to effectively coordinate Covid controls with economic and social development has once again become a crucial question."

In order to prop up domestic consumption, various policies are needed that work in tandem with stabilizing the job market and effectively increasing the disposable incomes of residents, said Zhe.

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EUROPEAN ECONOMIC NEWS PREVIEW: GERMANY FACTORY ORDERS, RETAIL SALES DATA DUE

Factory orders and retail sales from Germany and flash consumer prices, retail sales and economic confidence from the euro area are the top economic news due on Friday, headlining a busy day for the European economic news.

At 2.00 am ET, Destatis is slated to release Germany's manufacturing orders and retail sales figures for November. Economists forecast factory orders to fall 0.5 percent on month, reversing a 0.8 percent rise in October. Similarly, retail sales are seen rising 1.0 percent after falling 2.8 percent a month ago. In the meantime, UK Halifax house price data is due for December. Also, industrial output data is due from Statistics Norway.

At 2.45 am ET, France's Insee publishes consumer spending data for November. Economists forecast consumer spending to grow 1.0 percent month-on-month, in contrast to the 2.8 percent fall in October. At 3.00 am ET, the Czech Statistical Office is set to issue industrial and construction output and foreign trade reports.

At 4.30 am ET, UK S&P/CIPS construction Purchasing Managers' survey results are due. The construction index is expected to fall to 49.6 in December from 50.4 in the prior month.

At 5.00 am ET, Eurozone flash inflation, retail sales and economic confidence are due. Inflation is seen easing to 9.7 percent in December from 10.1 percent in November. Economists expect retail sales to grow 0.5 percent on month, reversing a 1.8 percent fall in October.

The euro area economic confidence index is seen at 94.7 in December versus 93.7 a month ago.

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EUROPEAN ECONOMICS PREVIEW: GERMANY INDUSTRIAL OUTPUT DATA DUE

Industrial production from Germany and unemployment from the euro area are the top economic news due on Monday.

At 1.45 am ET, the State Secretariat for Economic Affairs is scheduled to issue Swiss unemployment data for December. The jobless rate is forecast to rise to 2.1 percent from 2.0 percent in November.

At 2.00 am ET, Destatis is set to publish Germany industrial production for November. Economists forecast industrial output to grow marginally by 0.1 percent from October, when output was down 0.1 percent.

At 2.45 am ET, foreign trade and current account figures are due. The trade deficit is seen narrowing to EUR 11.3 billion in November from EUR 12.2 billion in October.

At 4.00 am ET, Italy's Istat publishes unemployment data for November. Economists expect the jobless rate to remain unchanged at 7.8 percent.

Half an hour later, Eurozone Sentix investor confidence survey results are due. The investor sentiment index is forecast to rise to -18.0 in January from -21.0 in December.

At 5.00 am ET, Eurostat is scheduled to issue euro area unemployment for November. The jobless rate is seen unchanged at 6.5 percent.

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US stock market closed mixed, Dow Jones down 0.34%

On Thursday this week, investors will be waiting for the publication of data on consumer prices in the US. Analysts believe that annual inflation in the country slowed down to 6.5% in December from 7.1% per annum recorded in November.

The statistics may give traders a hint as to what to do next with the US Federal Reserve, whose next two-day meeting will take place on January 31 and February 1. About 77% of analysts expect the regulator's discount rate to increase by 25 basis points to 4.5-4.75%.

In addition, as early as this Friday, the largest US banks will report on their financial results for the previous year.

At the close on the New York Stock Exchange, the Dow Jones fell 0.34%, the S&P 500 index fell 0.08%, the NASDAQ Composite index rose 0.63%.

The leading performer among the Dow Jones index components today was Salesforce Inc, which gained 6.59 points or 4.69% to close at 147.10. Quotes of Intel Corporation rose by 0.58 points (2.02%), closing trading at 29.31. Goldman Sachs Group Inc rose 4.92 points or 1.41% to close at 353.00.

The least gainers were Merck & Company Inc, which shed 4.46 points or 3.88% to end the session at 110.38. Johnson & Johnson rose 2.59% or 4.67 points to close at 175.58 while The Travelers Companies Inc shed 2.45% or 4.75 points to close at 189.12.

Leading gainers among the components of the S&P 500 in today's trading were Tesla Inc, which rose 5.93% to 119.77, Norwegian Cruise Line Holdings Ltd, which gained 5.90% to close at 13.81. as well as shares of NVIDIA Corporation, which rose 5.18% to close the session at 156.28.

The least gainers were Baxter International Inc, which shed 7.74% to close at 44.70. Shares of Regeneron Pharmaceuticals Inc shed 7.69% to end the session at 680.49. Quotes of Northrop Grumman Corporation decreased in price by 4.99% to 495.41.

The leading gainers among the components of the NASDAQ Composite in today's trading were CinCor Pharma Inc, which rose 143.97% to 28.74, Amryt Pharma Holdings Ltd, which gained 107.29% to close at 14.51. as well as Albireo Pharma Inc, which rose 92.16% to end the session at 43.85.

The least gainers were shares of Calithera Biosciences Inc, which shed 81.77% to close at 0.66. Shares of Peak Bio Inc shed 27.27% to end the session at 2.56. Quotes of Cerus Corporation decreased in price by 28.04% to 2.72.

On the New York Stock Exchange, the number of securities that rose in price (1868) exceeded the number of those that closed in the red (1202), while quotes of 102 shares remained practically unchanged. On the NASDAQ stock exchange, 2192 companies rose in price, 1561 fell, and 172 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.98% to 21.97.

Gold futures for February delivery added 0.33%, or 6.10, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for February delivery rose 1.42%, or 1.05, to $74.82 a barrel. Futures for Brent crude for March delivery rose 1.46%, or 1.15, to $79.72 a barrel.

Meanwhile, in the Forex market, EUR/USD rose 0.82% to 1.07, while USD/JPY shed 0.19% to hit 131.82.

Futures on the USD index fell 0.68% to 102.94.

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JAPAN LEADING INDEX AT 23-MONTH LOW

Japan's leading index decreased in November to the lowest level in nearly two years, preliminary figures of a survey by the Cabinet Office showed on Wednesday.

The leading index, which measures future economic activity, dropped to 97.6 in November from 98.6 in the previous month.

Further, this was the lowest score since December 2020, when it was 96.5.

The coincident index, which measures the current economic situation, also weakened to a 6-month low of 99.1 in November from 99.6 in the previous month.

At the same time, the lagging index improved to 100.9 in November from 99.2 in the preceding month.

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CHINA CONSUMER PRICES UNCHANGED IN DECEMBER

Consumer prices in China were flat on month in December, the National Bureau of Statistics said on Thursday.

That beat expectations for a decline of 0.1 percent following the 0.2 percent drop in November.

On a yearly basis, inflation rose 1.8 percent - in line with expectations and up from 1.6 percent in the previous month.

The bureau also said that producer prices sank 0.7 percent on year versus expectations for a fall 0.1 percent after slipping 1.3 percent a month earlier.

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US stocks closed higher, Dow Jones up 0.64%

At the close on the New York Stock Exchange, the Dow Jones rose 0.64% to hit a monthly high, the S&P 500 index rose 0.34%, the NASDAQ Composite index rose 0.64%.

The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 3.48 points or 3.61% to close at 99.81. Salesforce Inc rose 4.70 points or 3.24% to close at 149.60. Boeing Co rose 6.29 points or 3.02% to close at 214.32.

Shares of Coca-Cola Co were the leaders of the fall, the price of which fell by 0.80 points (1.29%), ending the session at 61.21. Walgreens Boots Alliance Inc was up 1.24% or 0.46 points to close at 36.66, while Walmart Inc was down 0.90% or 1.32 points to close at 144. .81.

The top gainers among the S&P 500 index components in today's trading were American Airlines Group, which gained 9.71% to 16.83, United Airlines Holdings Inc, which gained 7.52% to close at 51.30, and Cognizant Technology Solutions Corp Class A shares, which gained 5.85% to close the session at 65.10.

The least gainers were Charles River Laboratories, which shed 5.95% to close at 232.25. Bio-Techne Corp lost 5.14% to end the session at 82.17. Quotes of Illumina Inc decreased in price by 5.05% to 193.75.

Leading gainers among the components of the NASDAQ Composite in today's trading were Arrival Vault USA Inc, which rose 100.00% to hit 0.54, Akerna Corp, which gained 66.67% to close at 1.65, and also shares of Moxian Inc, which rose by 73.32%, ending the session at around 1.04.

The leading gainers were Oramed Pharmaceuticals Inc, which shed 76.46% to close at 2.54. Atlis Motor Vehicles Inc lost 35.32% to end the session at 6.52. Quotes of Universe Pharmaceuticals Inc decreased in price by 25.30% to 0.90.

On the New York Stock Exchange, the number of securities that rose in price (2353) exceeded the number of those that closed in the red (733), while quotes of 91 shares remained virtually unchanged. On the NASDAQ stock exchange, 2633 companies rose in price, 1063 fell, and 181 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 10.72% to 18.83, hitting a new 6-month low.

Gold futures for February delivery added 1.17%, or 22.05, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 1.20%, or 0.93, to $78.34 a barrel. Futures for Brent crude for March delivery rose 1.50%, or 1.24, to $83.91 a barrel.

Meanwhile, in the Forex market, EUR/USD rose 0.91% to 1.09, while USD/JPY shed 2.43% to hit 129.24.

Futures on the USD index fell 0.94% to 101.96.

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US stocks closed higher, Dow Jones up 0.33%

Also on Friday, the largest US banks published their financial results for the fourth quarter and all of last year. The net profit of all four banking giants decreased in 2022. In this regard, shares of Wells Fargo are depreciating by 3.8%, Bank of America - by 2.8%, JP Morgan - by 1.3%, Citigroup - by 0.8%.

At the close in the New York Stock Exchange, the Dow Jones rose 0.33% to hit a monthly high, the S&P 500 index rose 0.40%, the NASDAQ Composite index rose 0.71%.

The leading performer among the components of the Dow Jones index today was JPMorgan Chase & Co, which gained 3.52 points or 2.52% to close at 143.01. Quotes of Caterpillar Inc rose by 3.39 points (1.33%), closing the session at 258.46. Apple Inc rose 1.33 points or 1.00% to close at 134.74.

The least gainers were UnitedHealth Group Incorporated (NYSE:UNH), which shed 6.10 points or 1.23% to end the session at 489.57. Shares of Intel Corporation rose 0.18 points (0.59%) to close at 30.11, while Walt Disney Company shed 0.41 points (0.41%) to close at 99. 40.

Leading gainers among the components of the S&P 500 in today's trading were Illumina Inc, which rose 3.80% to 201.11, Wells Fargo & Company, which gained 3.25% to close at 44.22, and also shares of Stanley Black & Decker Inc, which rose 3.06% to end the session at 88.91.

The least gainers were Northrop Grumman Corporation, which shed 5.44% to close at 461.43. Shares of Ford Motor Company lost 5.29% to end the session at 12.72. Quotes of General Motors Company decreased in price by 4.75% to 36.51.

Leading gainers among the components of the NASDAQ Composite in today's trading were iPower Inc, which rose 50.42% to hit 0.77, Moxian Inc, which gained 45.21% to close at 1.51, and shares SmileDirectClub Inc, which rose 46.77% to end the session at 0.70.

The least gainers were Catalyst Biosciences Inc, which shed 32.69% to close at 0.26. Shares of Bed Bath & Beyond Inc shed 30.15% to end the session at 3.66. Quotes of AGBA Acquisition Ltd decreased in price by 21.52% to 4.12.

On the New York Stock Exchange, the number of securities that rose in price (1848) exceeded the number of those that closed in the red (1178), while quotes of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2343 companies rose in price, 1320 fell, and 185 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.55% to 18.35, hitting a new 52-week low.

Gold futures for February delivery added 1.25%, or 23.75, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 2.03%, or 1.59, to $79.98 a barrel. Futures for Brent crude for March delivery rose 1.64%, or 1.38, to $85.41 a barrel.

Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.12% to 1.08, while USD/JPY fell 1.06% to hit 127.85.

Futures on the USD index fell 0.10% to 101.89.

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EUROPEAN ECONOMIC NEWS PREVIEW: UK LABOR MARKET DATA DUE

Labor market statistics from the UK and economic sentiment from Germany are the top economic news due on Tuesday, headlining a busy day for the European economic news.

At 2.00 am ET, the Office for National Statistics releases UK unemployment data. The jobless rate is seen unchanged at 3.7 percent in three months to November.

In the meantime, Destatis publishes Germany's final consumer and harmonized prices for December. The flash estimates showed that consumer price inflation eased to 8.6 percent from 10.0 percent in November.

At 4.00 am ET, Italy's Istat is scheduled to issue consumer and harmonized prices for December. Inflation is seen at 11.6 percent, unchanged from the flash estimate and down from 11.8 percent in November.

At 5.00 am ET, Germany ZEW economic confidence survey results are due. Economists forecast the economic sentiment index to improve to -15 in January from -23.3 in December.

At 6.00 am ET, consumer prices data from Ireland and producer prices from Portugal are due.

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BANK OF JAPAN KEEPS RATE, YIELD CURVE CONTROL UNCHANGED

The Bank of Japan kept its interest rates as well as yield curve control unchanged and modified some of its lending programs.

The Policy Board of the BoJ unanimously decided to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will also continue to purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

After unexpectedly expanding the tolerance band of 10-year JGB yields in December, the bank today maintained the stance that it will allow yields to fluctuate in the range of plus and minus 0.5 percentage points from the target level.

The board also decided to extend by one year the deadline for loan disbursement under the Fund-Provisioning Measure to Stimulate Bank Lending and to expand the range of eligible counterparties for the Funds-Supplying Operations to Support Financing for Climate Change Responses.

In the latest Outlook for Economic Activity and Prices, released Wednesday, the central bank raised its inflation outlook for the fiscal 2022 to 3.0 percent from 2.9 percent and maintained the forecast for the fiscal 2023 at 1.6 percent.

For the fiscal 2024, inflation is seen at 1.8 percent, up from 1.6 percent estimated in October.

The bank lowered its fiscal 2022 growth outlook to 1.9 percent from 2.0 percent. Similarly, the growth projection for the fiscal 2023 was trimmed to 1.7 percent from 1.9 percent.

In the fiscal 2024, real growth is forecast to slow to 1.1 percent, which was down from the previous outlook of 1.5 percent.

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The pound is experiencing its finest hour. The main thing is not to let the fervor of the GBP die down

By the end of this week, the British currency was in high spirits, confidently moving to the next highs. This time the pound was a winner, although experts warn against excessive euphoria, as they fear further downward movement in the short term.

On Wednesday, January 19, the British currency edged up against the US dollar, as data showed British consumer price inflation dropped to a 3-month low of 10.5% in December but remains near 40-year highs. Analysts observed that prices for basic services rose to 6.8% from the previous 6.4%.

The current macro data may force the Bank of England to reconsider its monetary strategy and vote in February to raise its key rate by 50 bps. Against this backdrop, the pound continues to rise against the euro and the dollar. At the same time, the markets believe that the unexpected core inflation will force the Boe to hike the rate (by 50 basis points). According to analysts, the fate of the rate hike will be decided at the central bank's next meeting in February.

Current British inflation data was within consensus forecasts. This gave a small respite to both the BoE and households, which are now experiencing a cost of living crisis. The recent rise in the pound was recorded after impressive data on the UK labor market. Note that the country's wage indicator hit a record level, which is consistent with long-term inflationary pressures. According to economists, if there are no signs of a decline in service sector inflation in the near future, the BoE will remain aggressive.

According to the UK Office for National Statistics (ONS), the Consumer Price Index (CPI) dipped to 10.5% y/y in December from 10.7% in November. The CPI continues to retreat from its impressive peaks of December 1981, according to observers. As for the monthly UK Consumer Price Index, it was 0.4%. According to the ONS, core inflation (excluding food and energy) rose 6.3% in December, falling short of projections of 6.6%.

According to analysts, growing market expectations concerning the peak of the key rate will provide ample support to the pound. The current macro data from Great Britain is of no small importance in this matter.
According to economists, the December inflation reports showed a slowdown in price growth. However, current data suggests that core inflation remains at a high level, which is far from the target 2%.

According to currency strategists at Pantheon Macroeconomics, inflation in the UK will fall to 9% in March this year, while core inflation will return to the 2% target by the end of 2023. The implementation of this scenario will allow the BoE to cut rates at the beginning of 2024, experts believe.

In this situation the pound was rising steadily, taking advantage of a short-term weakness of the dollar and the macro data. On Wednesday, January 18, GBP/USD remained above 1.2300 as a reaction to the release of the British CPI data. Over the previous day, the pair gained 0.15% and remained in an uptrend. On Thursday, January 19, GBP/USD was trading at 1.2343, continuing its upward spiral.

However, some currency strategists are pessimistic about sterling's medium-term prospects. Many analysts expect it to fall to 1.1000 in the long term. The reason is the imbalance in the UK economy caused by the negative effects of the mini-budget. Most of these problems are still unresolved, experts emphasize.

The pound, which approached 6-month highs, was also supported by US macro data. According to analysts, the current economic situation in the US shows that a recession is coming. Against this backdrop, the exchange rate of GBP against the dollar reached its peak since June 2022. Note that the current macro data from the US demonstrated the deterioration of the national economy and opened the way for further easing of inflationary pressures. Disappointing macro data suggest that the Federal Reserve's efforts to get inflation back to the 2% target are paying off. However, a sharp decline in inflation could trigger a prolonged recession, economists warn.

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Dollar weakens as US debt rises. Interest rates could go higher than 5%

Growing uncertainty has caused US equities to fall, with all three major indices down a full percentage point. Meanwhile, gold rose strongly and almost gained as much as 1.5%.

The move came after reports emerged that the US already reached the debt ceiling set by the Congress. According to the data, it now exceeds $ 31 trillion, which is likely to force Treasury Secretary Janet Yellen to take "extraordinary measures", such as not paying all of the country's bills. It will also prompt Yellen to send a letter to the Congressional leadership, following the one she already sent last January 13, when she urged the Congress to act immediately in order to protect the full faith and credit of the United States.

Despite this, Fed officials continue to highlight the need for further rate hikes as it is a key tool to address and lower the current rate of inflation. The bank has announced its plan to raise the benchmark rate above 5% even though recent data indicates that inflationary pressures may have peaked.

Markets are becoming increasingly concerned because previously, the political administration has been slow to act, either postponing a solution or only proposing to raise the debt ceiling. Persistently high inflation can only make the problem worse.

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The Fed representatives disagree on how to proceed with their positions

The US stock market is committed to maintaining its highs from this year. There are those, including the governor of the Federal Reserve System, Christopher Waller, who advocate raising the interest rate by only a quarter of a percentage point at the next meeting in February of this year, despite the pessimistic tone of some Federal Reserve System representatives, including its head, Jerome Powell. Waller believes there is no purpose in quickly hiking interest rates higher and pushing the economy into recession while he awaits more evidence that inflation is dropping and going in the correct direction.

He compared the monetary policy to an aircraft that quickly took off and is now prepared for a steady drop, but he also stressed that it is not yet time to declare victory over inflation. In light of this reasoning and the evidence at hand, Waller stated, "I am now in favor of a 25 basis point rate hike at the next FOMC meeting at the end of this month." There appears to be some volatility ahead. He did not say how high he expected the rates to be.

Other officials, like Philadelphia Fed President Patrick Harker, favored a rate increase of merely 0.25 percentage points at the meeting on January 31–February 1, as I said above. The value of the US stock market will rise as Fed officials' statements become more subdued.

Premarket

A semiconductor manufacturer, AMD, saw its shares rise about 3% in premarket trading after Barclays upgraded them from "hold" to "buy," noting that it expects growth potential owing to generative AI.

After JPMorgan upgraded its rating of online retailer Wayfair from "sell" to "buy," the company's shares increased by more than 12%. The Wall Street business claimed better managerial awareness of cost control and improved trends in acquiring market share.

On hearing that activist investor Elliott Management had purchased a multibillion-dollar investment in the leading cloud computing company, Salesforce shares increased more than 5% in premarket trade.

Shopify. The stock of the e-commerce company Shopify increased by over 5% after Deutsche Bank raised its rating from "hold" to "buy," noting that more and more businesses are expressing interest in Shopify.

After the Wall Street Journal reported that major banks are collaborating to develop their digital wallets, PayPal shares dropped more than 1% in premarket trade. The wallet will take on PayPal and Apple Pay as competitors.

Following the disclosure that negotiations to merge Western Digital and Kioxia Holdings are still ongoing, shares of Western Digital increased by 4%.

Regarding the S&P 500's technical picture, the scenario is still favorable to buyers. The index may continue to rise, but to do so, the support level of 3,961 must be maintained. Returning $3,983 under control will be the bulls' equally important responsibility. Only after that can we anticipate a more assured upward move on the assumption that the trading instrument will strengthen by $4,010. A little higher is the level of $4,038; it will be challenging to surpass it. Buyers are only required to declare themselves in the vicinity of $3,923 in the event of a downward movement and a lack of support at $3,960. Its breakdown will cause the trading instrument to drop to $3,891 rapidly.

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US stocks closed higher, Dow Jones up 0.76%

At the close of the New York Stock Exchange, the Dow Jones rose 0.76%, the S&P 500 rose 1.19%, and the NASDAQ Composite rose 2.01%.

Shares of Intel Corporation led the way among the components of the Dow Jones index today, up 1.05 points or 3.59% to close at 30.27. Salesforce Inc rose 4.62 points or 3.05% to close at 155.87. Apple Inc rose 2.35% or 3.24 points to close at 141.11.

The least gainers were Procter & Gamble Company, which shed 1.92 points or 1.34% to end the session at 141.05. Verizon Communications Inc was up 0.93% or 0.37 points to close at 39.63 while Amgen Inc was down 0.86% or 2.27 points to close at 260. 97.

Leading gainers among the components of the S&P 500 in today's trading were Advanced Micro Devices Inc, which rose 9.22% to hit 76.53, Western Digital Corporation, which gained 8.66% to close at 41.79. as well as shares of Tesla Inc, which rose 7.74% to end the session at 143.75.

The least gainers were Xylem Inc, which shed 7.95% to close at 101.42. Shares of SBA Communications Corp shed 3.55% to end the session at 286.27. Schlumberger NV fell 2.60% to 55.86.

Leading gainers among the components of the NASDAQ Composite in today's trading were Gbs, which rose 293.13% to hit 1.03, Helbiz Inc, which gained 109.13% to close at 0.43, and VERB TECHNOLOGY COMPANY INC, which rose 69.65% to end the session at 0.39.

The least gainers were Catalyst Pharmaceuticals Inc, which shed 29.04% to close at 14.76. Shares of Atlis Motor Vehicles Inc shed 25.11% to end the session at 3.40. Quotes of Ontrak Inc decreased in price by 21.23% to 0.83.

On the New York Stock Exchange, the number of securities that rose in price (2196) exceeded the number of those that closed in the red (841), while quotes of 122 shares remained virtually unchanged. On the NASDAQ stock exchange, 2362 companies rose in price, 1346 fell, and 201 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.20% to 19.81.

Gold futures for February delivery added 0.23%, or 4.35, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 0.01%, or 0.01, to $81.65 a barrel. Futures for Brent crude for March delivery rose 0.57%, or 0.50, to $88.13 a barrel.

Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.15% to 1.09, while USD/JPY rose 0.84% to hit 130.65.

Futures on the USD index rose by 0.01% to 101.79.

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EUROPEAN ECONOMIC NEWS PREVIEW: GERMANY IFO BUSINESS CONFIDENCE DUE

Business sentiment from Germany and producer prices from the UK are the top economic news due on Wednesday, headlining a light day for the European economic news.

At 2.00 am ET, the Office for National Statistics is scheduled to issue UK producer prices for December. Output price inflation is forecast to rise to 16.4 percent from 14.8 percent in November. Input price inflation is seen at 18.0 percent versus 19.2 percent in the previous month.

At 3.00 am ET, Spain producer price figures are due. In the meantime, Italy's Istat publishes non-EU foreign trade data.

At 4.00 am ET, Germany's ifo Institute publishes monthly business confidence survey results for January. The business sentiment index is seen at 90.2, up from 88.6 in December.

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Forex Analysis & Reviews: Technical Analysis of Intraday Price Movement of Silver Commodity Asset, Thursday January 26, 2023

On the 4-hour chart of the Silver commodity asset, it appears that a hidden deviation has emerged between the price movement of Silver which is in a bearish channel and the Awesome Oscillator indicator which confirms that in the near future Silver has the potential to fall down to the 23,598-area level. 23,413 as the main target and level 23,165 as the next target to be tested but if on the way to the targets of these levels suddenly Silver is corrected upwards significantly breaking above level 24,105 then all the setups previously described will become invalid and automatically cancel by itself.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided by InstaForex

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UK CAR PRODUCTION FALLS 9.8% IN 2022, ELECTRIC VEHICLE OUTPUT AT RECORD

Car production in the United Kingdom declined sharply in the year 2022, as global chip shortages and structural changes hampered output along with weaker exports, while electric vehicle production hit a record high, data from the Society of Motor Manufacturers and Traders, or SMMT, showed on Thursday.

Total car production fell 9.8 percent on an annual basis. There were 775,014 units produced in 2022, down from 859,575 in 2021.

Demand from the domestic market increased 9.4 percent, while that from the foreign market plunged 14.0 percent in 2022.

Despite facing global challenges, UK factories produced a record number of electrical vehicles in 2022, totalling 234,066 units. This shows a 4.5 percent rise annually to represent almost a third of all car production.

In December, UK car production slumped 17

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