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Forex Market Analysis: NFP Report and Tech Giants’ Earnings Influence 2 Jan 2024

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Daily Forex Analysis: 2 Jan 2024

CURRENCIES:

Key Points:

• U.S. nonfarm payrolls report is the focal point for Friday.
• Weak jobs report expected to be positive for gold prices; strong data could negatively affect gold.
• The article analyzes the short-term technical outlook for gold.
• Federal Reserve maintains policy settings but abandons tightening bias.
• Rate cut possibility in March remains uncertain, depending on incoming data.
• January U.S. employment report of high significance with expectations of 180,000 added workers.
• Lackluster nonfarm payrolls could bring back March rate cut talks, benefiting gold.
• Strong NFP figures could reduce dovish sentiments on Fed’s policy, leading to potential pressure on gold in February.

STOCK MARKET:

• Market Recovery: Stocks experienced a rebound on Thursday, recovering from the previous day’s significant losses, in anticipation of major tech companies’ earnings reports.
• S&P 500, Dow Jones, and Nasdaq Performance: The S&P 500 increased by 1.2%, the Dow Jones Industrial Average by nearly 1%, and the Nasdaq Composite led the gains with a 1.3% rise.
• Federal Reserve’s Influence: The Federal Reserve’s potential rate changes were a central focus, with Fed Chair Jerome Powell indicating a less likely rate cut in the March meeting, against earlier investor expectations.
• Tech Giants’ Earnings Spotlight: Post-market earnings announcements from Apple, Amazon, and Meta (part of the “Magnificent Seven”) significantly influenced market sentiments.
• Meta’s Surge: Meta’s shares surged over 12% after it exceeded earnings expectations, announced a $50 billion share buyback, and declared a $0.50 cash dividend.
• Amazon’s Positive Outcome: Amazon’s stock also saw gains, rising more than 4% after reporting better-than-expected fourth-quarter earnings and providing an optimistic future outlook.
• Apple’s Mixed Results: Apple’s revenue beat expectations, but concerns about slowing sales growth in China affected its stock performance ahead of the earnings call.
• Contrast with Earlier Tech Earnings: This positive shift contrasted with disappointing earnings from Microsoft and Alphabet earlier in the week, which had negatively impacted their stock prices.
• Upcoming Economic Data: Investors are also looking forward to January’s job market data, with the nonfarm payrolls report due on Friday.

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