Fri, Jan 22, 2021 @ 21:19 GMT
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Week Ahead – Fed Meeting, Barrage of Data, and Tech Earnings

With President Biden now in office, markets will be on alert for any remarks from US Senators about whether they’d support the massive stimulus bill he proposed. A tough negotiating battle could see the final proposal being watered down. The Federal Reserve will meet as well. No policy changes...

Weekly Focus – Momentum Setback

The strong start in markets from early January experienced some setback this week on rising infections, as countries are hit by a second wave of COVID-19 despite vaccinations gathering pace as well as bond markets falling back (in yields). With President Biden taking office and the significant fiscal expansion...

Sunset Market Commentary

Markets January PMI’s confirmed the gut feeling of an economic setback caused by fresh and extended lockdown measures to fight Covid-19 (mutants). The EMU composite PMI declined from 49.1 to 47.5, broadly in line with consensus. The underlying divide between strength in the export-oriented manufacturing sector (54.7 from 55.2) and...

Dollar Rebounds Broadly as Risk Appetite Recedes

Dollar rebounds broadly today following receding risk appetite. Investors are apparently paring their gains in stocks. Swiss Franc and Euro are the next strongest, followed by Yen. On the other hand, Australian Dollar and Sterling are the worst performing. In particular, the Pound was weighed down by sharp deterioration...

Germany PMI manufacturing dropped to 57.0, services down to 46.8

Germany PMI Manufacturing dropped to 57.0 in December, down from 58.3, missed expectation of 58.0. PMI services dropped to 46.8, down from 47.0, above expectation of 46.8. PMI Composite dropped to 50.8, down form 52.0, hitting a 7-month low. Phil Smith, Associate Director at IHS Markit said: "There were few...

Risk Sentiment Lifts DAX For Renewed Probe Through 14000 Barrier

Dax index extends gains on Thursday as hopes of a large stimulus plan under new President boost risk sentiment, but traders focus the European Central Bank’s meeting today for more information about the eurozone’s economic health. Fresh strength pressures psychological 14000 barrier after the index briefly broke above in past...

The Dollar’s Corrective Rebound Is Petering Out

Markets EMU and US equities parted ways yesterday. A constructive Asian session and a better-than-expected German ZEW kept European indices in the green for most of the day but fell prey to gravity in the final trading hours. Wall Street finished with nice (tech) gains of more than 1.5% (Nasdaq)....

Sunset Market Commentary

Markets European traders put comfort from this morning’s constructive Asian sentiment though mood was a little less ebullient. German ZEW investor sentiment beat consensus with the expectations component jumping from 55 to 61.8 in January. The current conditions subseries remains deep in negative territory but surprised on the upside after...

Euro Rises While Dollar and Yen Stay Pressured

Yen and Dollar remain the worst performing ones for today with markets generally in risk-on mode. Investors are awaiting US Treasury nominee Janet Yellen's Senate hearing for more information on the her stance on fiscal stimulus and Dollar exchange rate. Though, buying focuses turned from commodity currencies to Euro...

German ZEW rose to 61.8, despite uncertainty about further course of lockdown

German ZEW economic sentiment rose to 61.8 in January, up from 55.0, above expectation of 60.0. Current situation index edged up to -66.4, from -66.5, above expectation of -68.0. Eurozone economic sentiment rose to 58.3, up from 54.4, above expectation of 45.5. Eurozone current situation dropped -3.2 pts to...

Political Uncertainty In Italy As Well As Supply Of Long – Dated Bonds Driving The European Market

Market movers today Another quiet day in terms of economic data releases with German ZEW survey data for January at 11:00 CET being the highlight of the day. Italian PM Conte won the first vote of confidence yesterday in the Italian parliament's lower house. Today, he is facing a...

Commodity Currencies Stay Generally Weak While Euro Could Stabilize Temporarily

Commodity currencies remain generally weak today on mixed market sentiments. On the other hand, Yen, Swiss Franc and Dollar are the strongest. Euro remains soft too, but recovery in crosses, in particular against Sterling, is limiting its downside for the moment. Gold also stabilizes back in prior range after...

Bundebanks: Restrictions won’t set the economy recovery too far back

German's Bundesbank said in the monthly report that data up to November suggested there was "no significant setback" in the economy in Q4 despite pandemic restrictions. Business confidence also "brightened" strongly in December. The "encouraging signals give reason to hope that the restrictions that were extended and tightened at the...

The Dollar Could Retain The Benefit Of The Doubt Today

Markets Markets finished the week with a cautious risk bias last Friday with Biden's $1900 billion stimulus plan lifting spirits only temporarily. Its announcement was the market's cue for some profit-taking while pondering the way forward. The narrowest Senate majority possible won't make it easy for the plan to be...

Weekly Focus – Biden Inauguration Next Week amid Fed Repricing

President-Elect Joe Biden is due to be inaugurated on Wednesday. While the event is normally a pure formality, tensions are high in the US, with concerns about another riot. We expect the Biden administration to be more stimuli-friendly near-term, as Biden told us when he presented his economic plan...

The Stock Market Is Declining In Anticipation Of Friction From The Adoption Of The Additional Stimulus Package In The US

On Thursday, the market was awaiting details of Joe Biden's plan for economic aid. The emergence of detailed information has not yet been able to inspire investors to buy risky assets. The plan includes a new wave of household spending by increasing direct payments. It also provides for an...

Biden’s $1.9 Trillion Stimulus Plan Sparks Profit-Taking

Stock markets drift lower as Biden's relief plan raises execution questions Dollar undecided, caught between mild risk aversion and dovish Powell Euro starts pricing in the risks, sterling smiles as UK vaccinations accelerate Today: US retail sales, big bank earnings, and German leadership contest Markets worry Biden's proposal will...

Markets Will Continued To Ponder The Impact Of The Biden Plan

Markets Global trading was driven by mixed, often divergent factors, leaving a rather inconsistent picture yesterday. US yields jumped higher in Asia as a report signaled Biden would announce a $2000 bln stimulus package, but there was no clear directional follow-through price action. US jobless claims unexpectedly jumped from 787k...

Biden Reveals Near–Term Economic Plan To Support The Economy

Market movers today On today's calendar we have the US retail sales for December. We will monitor to see whether another decline from October/November was recorded. We also get the UK GDP figure for November, which we expect to print in negative territory on the back of the lockdowns...

Sunset Market Commentary

Markets Today’s main trading event already occurred during Asian dealings, when a CNN report revealed soon-to-be US Biden could announce a new stimulus plan totaling $2000 billion. The news propelled US bond yields several basis points higher, thus ending the bull flattening of the yield curve after this week’s supply...

Sunset Market Commentary

Markets Sterling trading draws most attention in an otherwise relatively calm trading session. The US House session including a vote on Donald Trump’s impeachment draws most media attention. EUR/GBP since the start of the year slipped in line with EUR/USD, but the pair started to disconnect yesterday with sterling taking...

Euro Ignores Merkel’s Warning Of Prolonged German Lockdown

Dollar retreats after Fed officials play down prospect of QE tapering Euro capitalizes on dollar's woes, even as Merkel warns of extended lockdown Stock markets quiet, but crude oil continues impressive bull run US inflation data and Fed speakers today could set the tone Dollar retreats as Fed's George...

Sterling Rises on BoE Comments, Dollar Lost Momentum

Sterling surges broadly today after BoE Governor criticized that negative interest rates have a lot of issues. Commodity currencies are currently the next strongest, reversing some of this week's pull back. On the other hand, Dollar is now the weakest one for the day, as the near term recovery...

Germany BDI expects Joe Biden and China to boost industrial sector export this year

Germany's BDI industry association expects the country's GDP to grow 4.4% this year. The export-oriental industrial sector would drive recovery with 6% growth. BDI President Siegfried Russwurm said, "the election of Joe Biden as U.S. President facilitates the path for multilateral solutions and joint initiatives for fair competition on the...

Sunset Market Commentary

Markets Coming-of-age Day (Japanese holiday) confined overnight Asian trading. European investors kept their cards close to their chests as well, but things are changing as US investors enter the fray. The outcome is a combination we don’t witness every day, but which could become a more permanent feature: stocks and...

Dollar Relatively Resilient in Strong Risk-on Market, Setting the Base for a Rebound?

Global investors were all in risk seeking mode in the first full week of 2021. That came despite all the headlines of surges in coronavirus infection and death, return to strict lockdowns, chaos in Washington and Joe Biden's certification as US President-Elect. Dollar didn't perform too well but there...

Weekly Focus – Democratic Clean Sweep

With victory in the two special Senate runoffs the US Democratic Party has achieved a clean sweep and will control the presidency and both chambers of Congress. While it is a narrow victory, as Vice President-elect Kamala Harris will cast tiebreaking votes in the 50-50 Senate and the Democratic...

Sunset Market Commentary

Markets This morning in Europe, trading still mainly followed the same themes that dominated activity the previous days. The reflation story/hope kept European equities well supported, even as the pace of the rally slowed a bit. German production and foreign trade data for November were reasonably OK and suggest that...

The US Dollar Bounce Away From Sell-Off Lows

Markets European markets more or less took a breather yesterday following a vibrant start to the new year. Price action intensified once US traders joined the party. US Treasuries extended losses while main equity indices gained up to 2.5% (Nasdaq). The narrative that the Democratic blue sweep would hurt (big)...

Sunset Market Commentary

Markets The Capitol Hill riot caused quite some upheaval in media, but didn’t worry markets. Joe Biden’s presidential ceremony is rounded with a small delay, with US President Trump promising a peaceful power transition. Today’s European trading session was probably the most numbed since the start of the fresh year....