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11.01.202405:54 Forex Analysis & Reviews: Stock indices on the rise: how inflation trends and cryptocurrency news shape market dynamics

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Exchange Rates 11.01.2024 analysis

US stock markets showed strong growth, which is reflected in the rise of major indices. The Dow Jones Industrial Average rose 0.45% to 37,695.73, the S&P 500 Index rose 0.57% to 4,783.45, and the Nasdaq Composite Index climbed 0.75% to 14,969.65.

These gains were supported by strong performance in the technology sector, especially Nvidia shares, which hit record highs after a successful earnings report from TSMC. Meta Platforms and Microsoft also had a significant impact on the S&P 500 index, thanks to their positive results and optimistic outlooks.

Market attention is also focused on the issue of SEC approval of bitcoin-ETF. Cryptocurrency-related stocks such as Coinbase and Riot Platforms showed a decline after the rumors of ETF approval were denied. This event highlighted the sensitivity of the cryptocurrency market to regulatory news and rumors.

Inflation data, which is expected in the coming days, is a key factor that could influence the Federal Reserve's future interest rate decisions. Overall US inflation is expected to have risen by 0.2% month-on-month and 3.2% year-on-year, which could signal the need for further action from the Fed.

In addition, the market is in anticipation of quarterly reports from major US banks such as JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. These reports may provide additional insight into the state of the economy and the banking sector.

External factors such as fluctuations in oil and gold prices also affect market sentiment. Markets in the U.S. and Europe have been showing gains in the late 2023, thanks to lower inflation and looser central bank policies, which has contributed to optimism among investors.

In the afternoon, 10-year bond yields rose 1.9 bps to 4.034%. The US 10-year bond auction showed a high yield of 4.024%, slightly above the market's forecast (around 4.19%), suggesting that investors were demanding a small premium.

By late afternoon, the dollar index was down 0.14% to 102.36.

Weak economic data in Japan this week may make it less likely that the Bank of Japan will raise rates from negative territory this month.

Oil prices fell after a surprise jump in U.S. crude inventories. U.S. West Texas Intermediate crude futures fell 87 cents, or 1.2 percent, to $71.37 a barrel. Brent crude futures fell 79 cents, or 1 percent, to settle at $76.80.

Spot gold fell 0.3% to $2024.29 an ounce.

In conclusion, market dynamics in early 2024 remain influenced by both economic data and regulatory news. Investors continue to monitor developments, particularly in the context of inflation and monetary policy, awaiting new data and reports that will determine the market's future trajectory.

Thomas Frank
Analytical expert of InstaForex
© 2007-2024

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