Silver Longs Getting Impatient

Indices: Early Red Start

- U.S. equity index futures are in retreat as market participants are set to return from the holiday

- Japan’s Nikkei 225 (-1%) falls back suffering its fourth consecutive session of losses and erasing a chunk of last week’s gains, with tech and defense sectors both in retreat

Stocks: Assault on Dassault

- U.S. stock market was closed

- Dassault Systemes shares suffer another plunge, this time by 10% and taking its losses to 60% over the past year as investor fears over AI impact on the software sector fail to subside; AlphaValue cuts its rating to ‘reduce’ from ‘buy’

Commodities: Noting Geopolitical Updates With a Lack of Buyers Due to the Holiday

- Gold slips back below the $5K handle amid thin holiday liquidity including the Lunar New Year holiday in China that might mean an absence of Asia buyers, and a second straight session of contained losses as markets await upcoming FOMC minutes tomorrow and economic data later this week, with silver comparatively subdued and unable to mirror gold’s prior momentum and keeping the gold/silver ratio around 65

- Oil prices (WTI) climb back above $63 as traders weigh renewed U.S.–Iran nuclear talks expected today with President Trump saying he’ll be involved indirectly, while broader geopolitical negotiations involving Russia and Ukraine also expected today remain a background factor; Iran says no links with three vessels seized by India

FX/Central Banks/Crypto:

- Bitcoin continues to oscillate below $70K only briefly reaching the level intraday while Ethereum had more than one attempt to get back above $2K as it hovers near it

- US Dollar Index climbs into the upper 96 handle regaining a bit of momentum ahead of key U.S. economic releases including GDP and PCE later this week

- Federal Reserve’s Bowman spoke regarding revitalizing bank mortgage lending

- European Central Bank’s Nagel in favor of euro stablecoins for digital payments

- Minutes from the latest Reserve Bank of Australia meeting where they raised rates showed the Board judged that risks to inflation and employment “shifted materially” and that inflation would likely stay above target for too long without a policy response

- Bank of Japan’s Governor Ueda doesn’t comment on details of talks with PM Takaichi but says she didn’t have a specific policy request

Capital.com Client Sentiment:

- Indices: Small change in price results in little changes on the sentiment front with traders still heavy buy in all four key U.S. equity indices; elsewhere long bias reaches heavy buy territory in the Nikkei (68% from 63% yesterday) following the pullback

- Commodities: Moves back into extreme buy territory in gold (79% from 76% yesterday) due to the partial pullback while the bias is trimmed a couple notches in silver (85% from 87%); WTI’s gains sees fresh longs close out taking the bias out of extreme buy (from 79% yesterday to 73% this morning)

- FX: Shifts in EUR/USD (from a slight sell 52% to a slight buy 52%), on the verge of shifting in AUD/USD (slight buy 52% from 54% yesterday), and stuck in the middle in GBP/USD

Data:

- EZ industrial production in December contracts by 1.4% m/m, slightly better than the -1.5% forecast though y/y 1.2% a slight miss

Today:

- U.S. Empire’s manufacturing (5:30 pm Dubai time), NAHB’s housing market index (7 pm), FOMC members speak

o   Earnings from Palo Alto and others

o   U.S.-Iran talks and U.S.-led negotiations between Russia and Ukraine expected today

- In Europe, UK labour data (11 am), German ZEW (2 pm)

- Canadian CPI (5:30 pm)