US labor market data from ADP to be released today - 2.2.2022

On Tuesday, the US dollar index continued to decline for the 2nd day in a row. The main reason for this was investor doubts that the U.S. Federal Reserve at a meeting on March 16 will raise the rate (0.25%) immediately by 0.5%. St. Louis Fed President James Bullard said the rate should go up in March, May and June. At the same time, he did not rule out that in March an increase of 0.25% would be enough. Philadelphia Fed President Patrick Harker also expressed doubts about the need for a 0.5% rate hike in March. An additional negative for the US dollar was the decline in business activity indicators in the industry (Markit Manufacturing PMI and ISM Manufacturing PMI) in January compared to December, as well as construction spending in December (Construction Spending). Today in New Zealand, data on the labor market for the 4th quarter of 2021 was released. Unemployment fell to a historic low of 3.2%. This contributed to the strengthening of the New Zealand dollar. Today there will be a speech by the head of the Reserve Bank of Australia, as well as important data on inflation in the Eurozone for January.

Bitcoin corrected upwards due to the statement of the Russian authorities about the possibility of maintaining mining and operations with cryptocurrencies in Russia. According to Bloomberg, Russians own $214 billion worth of cryptocurrencies, which exceeds 12% of the global crypto market capitalization. Another positive was the unexpected refusal of the Latin American country El Salvador to comply with the demand of the International Monetary Fund (IMF) to cancel the use of bitcoin as a domestic means of payment.

Yesterday, US stock indices rose for the 3rd day in a row. Several factors contributed to this. The corporate reporting season is going quite well. Refinitiv raised its forecast for S&P 500 4Q21 combined earnings growth to +25.2%. Alphabet's (Google's) financial performance was positive and its shares rose 10% on the exchange and OTC markets. Quotes of Meta Platforms Inc rose by 5.5%, Amazon - by 3%. Shares of oil companies have risen in price against the background of growing oil and good reporting Exxon Mobil (+6%). Political risks between NATO, Ukraine and Russia eased slightly after the US provided a written response to Russian proposals to resolve the conflict. The Fed may not start raising rates as aggressively as expected. This could be another positive for the stock market. Today in the US there will be important data on the labor market from the independent agency ADP for January. They will help refine the forecast for the official Non Farm Payrolls, which will be published on Friday, February 4th. In the meantime, US unemployment is expected to rise in January. This could reinforce the Fed's view that there is no need to rush to raise rates just yet. Today will be released quarterly reports from Meta Platforms, Qualcomm and other US corporations.

Today, oil is slightly corrected down. The political risks around NATO, Ukraine and Russia eased slightly after the US and Russia began a written discussion of the current situation. Recall that Russia ranks second in the world in terms of oil exports. Saudi Arabia is in 1st place, and Iraq is in 3rd place. The next OPEC+ meeting will take place today. Some investors do not exclude that the increase in production may be more than the planned volume of +400 thousand barrels per day. This may be facilitated by the record level of oil prices. Brent is now trading near a 7 and a half year high. Oil quotes are supported by data from the American Petroleum Institute on the reduction of US stocks for the week by 1.6 million barrels.