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On November 20th, Nvidia (NVDA.O) released its Q3 fiscal quarter results. Sales of its chips, a core component of the artificial intelligence (AI) boom, exceeded Wall Street expectations, and the company provided a strong revenue forecast for the quarter, leading investors to believe the AI investment frenzy will continue. The Q3 report showed revenue of $57 billion, a 62% year-over-year increase. Data center revenue reached $51.2 billion, higher than the expected $49 billion. Furthermore, its Q4 revenue outlook was approximately $65 billion, significantly higher than the average analyst estimate of $61.6 billion. Following the earnings release, Nvidias (NVDA.O) after-hours stock price rose more than 4%. Nvidia CEO Jensen Huang stated, "Blackwell sales are phenomenal, and cloud GPUs are completely sold out." Previously, Huang had downplayed concerns about an AI bubble.On November 20th, Ukrainian President Volodymyr Zelenskyy visited Turkey and met with President Recep Tayyip Erdoğan to seek the resumption of peace talks with Russia. Following the meeting, Zelenskyy posted a statement suggesting that only the United States and President Trump possess the capability to end the Russia-Ukraine conflict. Two sources familiar with the matter stated that the United States has presented Ukraine with a series of proposals to end the war, requiring Ukraine to accept a ceasefire framework proposed by the US, including the relinquishment of some territory and a reduction in the size of its armed forces. However, a Ukrainian source indicated that although Ukraine has received the US proposals, it does not intend to participate.Nvidias (NVDA.O) surge boosted after-hours trading in US chip stocks, with AMD (AMD.O), TSMC (TSM.N), and Micron Technology (MU.O) all rising by around 3%.According to AXIOS: A U.S. official said regarding a potential Russia-Ukraine peace plan that, despite being under Russian control, the Donbas region after the withdrawal of Ukrainian troops would still be considered a demilitarized zone, and Russia would not be allowed to deploy troops there.Nvidia (NVDA.O): H20 product sales were negligible in the third quarter.

USD/CHF Continues Fed-Induced Declines Toward 0.9020 Support; Central Banks and US NFP in Focus

Daniel Rogers

Feb 02, 2023 16:13

During Thursday's Asian session, USD/CHF remained depressed at the lowest levels since August 2021 as bears enjoy a three-day slump near 0.9065. The Swiss Franc (CHF) pair extends its losses triggered by the US Federal Reserve as market participants expect the main central bank decision and January employment statistics.

 

The USD/CHF retested a multi-day low the day before in response to dismal US data and the Fed's dovish rate hike.

 

Despite the fact that the Fed matched market expectations by raising the benchmark rate by 0.25 percentage points, the statement that inflation "has eased but remains high" impacted on the U.S. currency.

 

Fed Chair Jerome Powell's statement that "We may pronounce that a deflationary process has begun" contributed to the depreciation of the US usd. In addition, the policymaker acknowledges the need for a rate cut by the end of 2023 if inflation decreases much faster than projected. Powell of the Federal Reserve stated that a couple more rate hikes are still required to achieve this.

 

Elsewhere, the US ISM Manufacturing PMI dropped to its lowest level since June 2020, reaching 47.4 in January compared to the forecasted 48.0 and the prior reading of 48. In addition, the ADP Employment Change dropped to a one-year low with 106K, compared to the 178K market forecast and the upwardly revised previous figure of 253K. In contrast, the number of JOLTS Job Openings grew to 11.01 million in December, exceeding both the average estimate of 10.25 million and the previous figure of 10.44 million.

 

Wall Street soared against this backdrop as 10-year US Treasury yields fell the most in two weeks. Note that benchmark interest rates are licking their wounds near 3.41 percent, while S&P 500 Futures are showing slight increases as of press time.

 

Prior to the monetary policy meetings of the European Central Bank (ECB) and the Bank of England, USD/CHF traders should pay attention to market movements affected by these central banks (BoE). However, significant attention should be paid to Friday's US Employment report. Nonfarm Payrolls (NFP), which is expected to decline to 185K from 223K earlier, will be an important indicator to track.