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Positive Market Sentiment Dominates Tuesday’s Session

INVESTINGPositive Market Sentiment Dominates Tuesday’s Session

Today’s session is largely defined by positive investor sentiment. This optimism is evident in stock markets, while emerging market (EM) currencies are also making gains—though the Polish zloty (PLN) is an exception. However, PLN is coming off a strong Monday, providing room for some corrections. Meanwhile, European inflation appears to be under control in some economies but remains a challenge across the eurozone as a whole.


European Inflation Update

Early January marks the season of preliminary inflation readings for December, with several reports released today from across Europe. Starting with Switzerland, the country faces the opposite challenge to nations like Poland: sluggish price growth. The year-over-year Consumer Price Index (CPI) came in at 0.6%, aligning with forecasts and signaling stabilization near this level. On a monthly basis, however, deflation persists, with a -0.1% result marking the fourth consecutive negative reading. This data likely contributed to the weakening of the Swiss franc (CHF) during today’s session, reinforcing expectations of continued interest rate cuts in Switzerland. The CHF exchange rate dropped to around PLN 4.51, nearing December lows.

Stabilized inflation is also evident in France, where the annual CPI remained unchanged from the previous month at 1.3%, falling short of the 1.5% forecast. A similar scenario played out in Italy, where the year-over-year CPI also held steady at 1.3%, missing expectations of 1.5%. This trend could suggest growing synchronization among the EU’s largest economies.

For the eurozone as a whole, inflation data showed an annual increase to 2.4%, the highest since July. Although this figure aligns with market expectations, it raises concerns. On a positive note, core inflation (excluding energy and food prices) remained at 2.7% for the fourth consecutive month. These numbers leave the European Central Bank’s (ECB) monetary easing path unclear ahead of its next meeting on January 30. Nonetheless, they supported the euro’s recent gains, with EUR/USD trading at around $1.04 Tuesday afternoon.


A Green Tuesday

Tuesday’s session has been characterized by a positive sentiment, boosting most assets. In Asian markets, Tokyo’s Nikkei had an impressive session, rising nearly 2%, while Hong Kong stood out negatively with a 1.2% drop. In Europe, most major indices are posting gains of 0.4%–0.6%, with the exception of London’s FTSE 100, which is down 0.3% due to weak performance in the financial and healthcare sectors.

Warsaw’s WIG20 is outperforming its European peers, climbing 1.5%. However, the Polish zloty is not following suit, gaining only against the weak Swiss franc. The PLN is giving back some of the strength it accumulated during the past few trading sessions. As a result, the euro is approaching PLN 4.26, the dollar is hovering around PLN 4.10, and the pound is nearing PLN 5.14 due to GBP’s strong performance in broader markets.


Gold and Oil on the Rise

Gold continues its upward trajectory, with the price of an ounce testing $2,660 for the second time this year. Oil prices are also rebounding, with Brent crude trading at $77 per barrel. Investors are keeping an eye on U.S. labor market data, specifically the JOLTS report, which could bring further volatility to the markets.


By Adam Fuchs, Currency Analyst at Walutomat.pl
Source: Manager Plus

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