The market’s movement appeared more stable at the start of the European trading session on Thursday (February 13, 2025) compared to earlier in the morning. Significant volatility was observed from last night until this morning in response to the release of inflation data (Consumer Price Index/CPI) from the United States, which indicated an increase for the month of January.
Moreover, President Donald Trump reiterated his intention to implement reciprocal policies, meaning that if other countries raise import tariffs on American goods, he will respond by increasing tariffs on their products as well. This could potentially escalate a larger trade war.
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On another front, Trump mentioned that he has spoken with Russian President Vladimir Putin to initiate negotiations aimed at ending the war in Ukraine.
These developments are likely to continue impacting market movements during tonight’s trading session, alongside several U.S. economic data releases scheduled for 20:30 WIB. Below is data from Trading Central:
- U.S. unemployment claims (February 8) at 20:30 WIB; forecast 215K vs. previous 219K
- U.S. Producer Price Index (PPI) (year-on-year/January); forecast 3.4% vs. previous 3.3%.
GOLD
The price of Gold (XAUUSD) retraced its earlier gains after reaching a high of $2,922.77 per troy ounce. The uptick followed Trump’s comments on reciprocal policies, raising concerns about the potential for a more significant trade conflict. This situation has enhanced Gold’s appeal as a safe haven investment.
With Gold’s upward momentum showing signs of stalling, there is a risk of profit-taking during tonight’s trading. This sentiment could be amplified if U.S. unemployment claims come in lower than the forecast, while PPI turns out to be higher. A higher PPI reading would strengthen expectations that the Fed will maintain elevated interest rates for a longer period, potentially creating negative sentiment around Gold.
OIL
Oil prices (CLS10) fell at the beginning of the European trading session, hitting a daily low of $70.51 per barrel. The increase in U.S. oil inventories for three consecutive weeks, particularly in substantial amounts, is exerting pressure on oil prices.
This rising stock could indicate weakened demand or increased production levels. Both scenarios contribute to a negative sentiment for oil prices, suggesting further declines may be possible. Additionally, should the conflict between Russia and Ukraine come to an end, it is likely that oil supplies from Russia will return to the market, adding to the bearish sentiment on oil.
EURUSD
EURUSD climbed during the early European trading session, reaching a daily high of 1.04401. This currency pair was buoyed by hopeful sentiments regarding a swift resolution to the Russia-Ukraine conflict.
Nevertheless, fundamentally, EURUSD remains overshadowed by negative sentiment stemming from the potential for European Central Bank (ECB) interest rate cuts in the near future. Should the U.S. economic data released tonight exceed expectations, EURUSD could face downward pressure.
GBPUSD
GBPUSD rose in early European trading, reaching a daily high of 1.25170. Compared to Wednesday’s closing numbers, GBPUSD increased by 740 points (74 pips), buoyed by the release of stronger-than-expected UK economic growth (Gross Domestic Product/GDP) data.
However, if U.S. unemployment claims are reported lower than the forecast and PPI appears higher, GBPUSD might face selling pressure tonight.
USDJPY
USDJPY dipped to 153.898 in early European trading, following a rise to 154.667 earlier. Yesterday, USDJPY surged more than 190 pips in response to the release of higher-than-anticipated U.S. CPI data.
Given this context, if tonight’s PPI data exceeds expectations, USDJPY may receive additional positive sentiment.
Nasdaq
The Nasdaq experienced volatility within the range of 21,752 – 21,926 leading into the early European trading session. On Wednesday, the Nasdaq exhibited extreme volatility, initially dropping sharply in reaction to U.S. CPI data before rallying on hopes that the Russia-Ukraine conflict might soon end.
In the absence of updates on the Russia-Ukraine negotiations, the Nasdaq could experience negative sentiment if U.S. PPI data is reported higher than expected. This would bolster expectations that the Fed is likely to maintain high interest rates for an extended period.
