Macro-News round-up:

US: Yesterday’s FOMC minutes in the US reflect what we have been repeating for days. there is a fear on the part of Fed officials of cutting rates too soon: “most participants noted the risks of moving too quickly to ease the stance of policy and emphasised the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent”.

On February 29th, a solid January core PCE release is expected. That means that until then, we will see a dollar that is likely to strengthen, and that, if a higher PCE comes out, will definitely confirm as bullish.

The chart patterns we have shared on ATFX networks show a possible DXY target level of 106.50 – 107.

Europe: Today’s macroeconomic data from Europe focus on the PMIs.  This time, PMIs have improved relatively better than expected, with the exception of the manufacturing PMIs, which remains extremely weak.  In any case both PMIs, services and manufacturing, for both the euro zone and Germany, remain below the 50 threshold, indicating economic contraction.

UK: The preliminary February PMI, which covers service companies, increased to 53.3 from 52.9 in January, the best level in nine months, adding to indications that Britain’s mild recession of last year is probably going to be short-lived. However, manufacturing PMIs remain weak, below 50, weaker than expected and in clear contraction.

Chris Williamson, S&P Global Market Intelligence’s Chief Business Economist, said to Reuters that demand for financial services was driving the recovery despite manufacturing output continuing to decline and consumer-facing services companies still suffering pressure from rising costs of living. This was due to predictions of impending rate reduction.

Nvidia Results: In after-hours trading on Wednesday, Nvidia’s shares surged 6.4% after the semiconductor behemoth revealed quarterly results and outlook that above Wall Street’s projections.

Nvidia projects sales of $24 billion for the first quarter of fiscal 2025, give or take 2%. Analysts projected $21.9 billion in sales for the business run by Jensen Huang.

Our pre-results analysis, published by ATFX yesterday, gave a positive review on NVIDIA, with low leverage, and strong solvency based on fundamental data. Also included in the report is a graphical analysis.

Japan: The Nikkei share average in Japan reached a record high on Thursday, surpassing the top of the 1989 bubble. Gains across the board were led by equities related to chips, as the forecast of U.S. chipmaker Nvidia exceeded market expectations. The Nikkei closed up 2.19% at 39,098.68.

The Nikkei had its largest boost from Tokyo Electron, which increased 6%, and Advantest, a manufacturer of chip-testing equipment, which increased 7.5%. Screen Holdings, another chip-related stock, surged over 10%.

Geopolitics: Yesterday, during a speech to campaign donors in San Francisco, Joe Biden referred to Russian President Vladimir Putin as a “crazy son of a bitch”. Then He clarifies, This is the last existential threat. It is climate. We have a crazy SOB like that guy Putin and others and we always have to worry about nuclear conflict, but the existential threat to humanity is climate” The Kremlin responded by saying that Biden is making a fool of himself. The Munich conference on European defence at the weekend maintains that it is the end of peacetime.  In a strange phenomenon, we have heard over the last few days, in synchronised fashion, the leaders of the various countries of Europe warning their citizens that a war with Russia is approaching. Is this a real threat, or simply the United States starting its campaign to sell new weaponry to Europe?