The US stock market collapsed yesterday due to the publication of corporate reports for the 4th quarter of the former Facebook company Meta on Wednesday. The data showed a decline in earnings per share and other more serious customer problems. In addition, news about the ongoing conflict with Apple in IOS due to changes in the privacy policy added more pressure.
Negative news led to a sell-off in the shares of tech companies that dragged the entire US stock market down, causing global stock indices to plunge. However, these events were not the only ones of their kind. The Institute for Supply Management's (ISM) non-manufacturing business activity index released on Thursday showed a notable decline to 59.9 points against expected growth of 71.00 points in January and December value of 68.3 points.
In addition, there was a decline by 0.4% in the December volume of industrial orders from a November increase of 1.8%. Even the reported figures for the Purchasing Managers' Index in the non-manufacturing sector, which showed slightly better values in January than expected (59.9 points against the forecast of 59.5 points), but worse than in November (62.3 points), could not stop the wave of negative moods among market participants.
About the currency market, all attention was focused on the results of the monetary policy meeting of the ECB and the Bank of England. The British regulator expectedly raised its key interest rate to 0.50% from 0.25% and said it expects more increases. But all the intrigue was concentrated in anticipation of the results of the ECB meeting. As expected, the regulator left all the parameters of monetary policy unchanged but based on the previous reviews, ECB President C. Lagarde expressed concern about the strong inflation growth, which served as a signal to the market that the ECB could raise its key interest rate in the spring for the first time in many years. This noticeably led to a sharp increase in demand for the Euro currency. At the same time, the EUR/USD pair surged by more than 1.5%.
For today's important events, the focus will be on the publication of US employment data from the country's Department of Labor. It is predicted that the number of new jobs in January will be at the level of 150,000 against December's 199,000. If the figures, as well as those presented earlier from ADP, are worse than expected, then this will lead to a local drop in the US dollar rate and possibly to a new wave of sales in the stock and commodity asset markets.
Forecast of the day:
The EUR/USD pair is trading below the level of 1.1480. Negative data from the US labor market may lead to the breakdown of this resistance level and the pair's further growth to 1.1550.
The GBP/USD pair is trading below the level of 1.3600. The above scenario will stimulate the pair's further growth to 1.367.