MARKET UPDATE

Dollar wobbles near eight-month low ahead of central bank meetings

The dollar held close to an eight-month low against its peers on Thursday, as a gloomy U.S. corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week.

The U.S. dollar index, which measures the greenback against a basket of currencies, inched 0.1% higher to 101.65, after falling as low as 101.52 earlier in the session, testing last week’s eight-month trough of 101.51.

Downbeat earnings and guidance from U.S. companies and a string of tech sector layoffs have deepened fears of a sharp economic downturn in the United States, leading investors to pare back expectations on how much longer the Federal Reserve will need to aggressively raise interest rates.

 

Oil steady as market awaits more supply clarity

Oil prices were steady on Thursday after U.S. crude stocks climbed less than expected, while investors awaited further clarity on supply drivers, including an OPEC+ meeting and the looming EU ban on Russian refined products.

Brent crude futures rose 16 cents, or 0.2%, to $86.28 per barrel by 0745 GMT. U.S. West Texas Intermediate (WTI) crude futures climbed 31 cents, or 0.4%, to $80.46.

“The market awaits to get more clarity on the upcoming EU embargo on Russian refined products and the subsequent reshuffle of trade flows, while OPEC+ delegates head into their next meeting,” Citi analysts said in a note Thursday.

“The upcoming EU embargo on Russian refined products remains a major source of concern for the market, with widespread dislocations expected to materialize,” the Citi analysts said.

Oil prices were also little changed after data showed a build in U.S. crude inventories that was less than expected.

Crude inventories edged higher by 533,000 barrels to 448.5 million barrels in the week ending Jan. 20, the Energy Information Administration (EIA) said.

That was substantially short of forecasts for a 1 million barrel rise, though according to the EIA crude stocks are at their highest since June 2021.

 

SAP to cut 3,000 jobs in efficiency move, explores Qualtrics stake sale

SAP on Thursday said it plans to cut 3,000 jobs, or 2.5% of its global staff, and to explore a sale of its remaining stake in Qualtrics to focus on strategic growth areas and operate more efficiently.

With the planned job cuts, SAP joins other big tech companies including Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) in turning to layoffs to cut costs.

SAP reported a 30% revenue increase in its cloud business in the fourth quarter, helped by strong demand for its HANA software.

Analysts are worried that the lucrative cloud segment for big tech companies could be hit hard as customers look to cut spending.

SAP’s operating profit grew 17% in the three months through December to 1.71 billion euros ($1.87 billion) on group revenue of 8.44 billion euros, it said.

 

 

 

 

 

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