Fri, Jan 22, 2021 @ 21:57 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...

Cliff Notes: Gauging Economic Strength at the Turn of the Year

Key insights from the week that was. This week saw a number of key data updates globally, most notably consumer sentiment and the labour force survey in Australia and GDP for China. In Washington DC, Joe Biden was also sworn in as the 46th US President. Beginning with Australian Westpac-MI consumer...

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...

A Tough End to the Week

Stock markets are ending the week on a negative note after a period of consolidation so far this month. It’s been a strange start to the year following a bumper two months, with vaccine optimism keeping sentiment upbeat despite the growing near-term Covid risks. The political distraction in the US...

US Dollar Retreats On Stimulus Hopes

The dollar wilts before the stimulus trade The US dollar index retreated overnight as markets continued to rotate out of US dollars and into global recovery facing commodity and Asian currencies. The dollar index fell 0.40% to 90.04, leaving it squarely in the middle of its 89.00 to 91.00 two-month...

Equity Markets Retreat In Asia

Asian markets lower as caution is the word Wall Street was marked by a mixed session overnight. The S&P 500 was almost unchanged, while the Nasdaq got an Apple VR boost, rising 0.55%. The Dow Jones suffered big-oil executive order fatigue, finishing 0.04% lower. The bickering between the Senate leaders...

Stay Safe Friday

Wall Street positive but Asia cautious Wall Street had another positive session overnight, but a few swirling doubts have crept into Asian markets, with equities across the region indicating that regional investors prefer caution as the week closes. Hong Kong has announced a complete lockdown of part of Kowloon this...

USD Continues Its Slide Lower

The USD seems to be heading for the worst week in the month today as the markets seem to be characterized by a positive mood, probably spurred also by the change of government and its big spending plans. Against EUR, the greenback is in the back foot as the...

Stocks Retreat, Dollar Edges Up As Virus Concerns Creep In Again

Equity rally loses steam after strong weekly gains amid renewed virus jitters Talk of Biden tax increases also undermines risk appetite, lifting the dollar Poor data pull down pound and aussie but euro fares better after ECB stays put Virus outbreaks, recession fears cap risk rally The stimulus-led stock market...

Stocks Cool Off From Record Highs

US futures in the red. Major events next week could dictate risk sentiment. Bullish case for equities still valid. Oil benchmarks pare weekly advance. The rally in global stocks is taking a breather before the weekend, having posted a new record high on Thursday. Most Asian benchmark indices are...

ECB On Hold And Hoping To Stay There

As expected, no policy change delivered or signalled. ECB emphasises mixed signs in current oulook. Obstacles to early policy changes look immense. Preserving ‘favourable financing conditions' the key current focus for ECB. But guidance lacking on what ‘favourable conditions' might mean in practice. Markets may explore ECB's tolerance...

Crude Oil Price Points Lower Ahead Of EIA Inventories

The New Zealand dollar declined in early trading even after relatively strong inflation numbers from the country. According to the statistics bureau, consumer prices rose by 0.5% in the fourth quarter. This was better than the expected increase of 0.1%. The prices increased by 1.4% on an annualised basis....

Ineffective Vaccines A Key Tail Risk For Global Recovery

Market movers today Today's focus is on preliminary PMIs for the euro area (including Germany and France), the UK and the US. Most PMIs are likely to show that we are still in the middle of a manufacturing boom, while the service sector is struggling due to restrictions. This...

US: Housing Starts End the Year on Strong Footing 

U.S. housing starts rose by 5.8% to 1.67 million units (annualized) in December from an upwardly revised 1.59 million units in November. The December outturn beat market expectations for a much more staid increase to 1.56 million units. Last month's strong performance was once again powered by single-family...

Sunset Market Commentary

Markets The ECB left key policy parameters unchanged. The deposit rate remains at a negative -0.5%. APP runs at a €20bn pace/month. Net bond buying under PEPP will continue until March 2022 while maturing securities will be rolled-over at least until end 2023. The ECB has repeatedly said they could...

US: Initial Jobless Claims Fall, but Still Point to Fragile Labor Market

The larger-than-expected decline in initial jobless claims last week is a welcome development, but at 900K, new filings remain elevated. Another negative print for payrolls in January remains within the realm of possibility. Down, but Perhaps Not Enough to Escape Another Negative Payroll Print After leaping over the first full week...

Euro Recovers as ECB Sees Less Pronounced Downside Risk, Dollar Softens after Jobless Claims

Euro recovers mildly in early US session, after ECB said downside risks to the economic outlook are less pronounced. Though, it remains one of the worst performing for the week, together with Dollar, Yen and Swiss Franc. The greenback is clearly still under pressure for now, after worst than...

US initial jobless claims dropped to 900k, continuing claims down to 5.05m

US initial jobless claims dropped -26k to 900k in the week ending January 16, higher than expectation of 860k. Four-week moving average of initial claims rose 23.5k to 848k. Continuing claims dropped -127k to 5054k in the week ending January 9. Four-week moving average of continuing claims dropped -67k to...

Asia Markets Rise As Biden Takes Over

Asian equity markets join in presidential honeymoon The FOMO buy everything trade was back in force overnight, with President Biden’s swearing-in unleashing another round of stimulus-powered buying. Morgan Stanley’s impressive earnings data and a huge by Netflix on their zero borrowing/buyback news added to the jovial mood on Wall Street....

Wall Street At Fresh Record As Biden Sworn In, Euro Up Ahead Of ECB

Hopes of more stimulus and relief over Biden's peaceful transition lift sentiment US stocks close at new record highs as strong earnings add extra fuel Dollar skids again, euro bounces off lows ahead ECB decision Optimism high as Biden enters White House After four tumultuous years, Trump's presidency came to...

US Stimulus Weighs On US Dollar

The dollar wilts before the US stimulus trade The dollar index remained almost unchanged at 90.45 overnight, with much of the dollar’s retreat seen amongst the commodity-bloc currencies as opposed to the euro and sterling. The Australian, New Zealand and Canadian dollars all posting gains of around 0.70% with the...

Honeymoon In DC

For all the noise about the Biden USD1.9 trillion stimulus package that we are writing about ad nauseum, and the follow-on remake America spending the new President also wishes to enact, one critical risk remains and is being totally ignored by financial markets everywhere. That is the inclination of...

Markets Celebrate The Peaceful Presidential Transition With New Record Highs

Global stocks hit an all-time high early Thursday on optimism that the new US administration will take bold steps in reviving growth and speed up vaccine distribution. All three major US indices climbed to new records on President Biden's swearing in, with the S&P 500 posting its best Inauguration Day...

Keep A Very Close Eye At Sterling

Markets The British pound unexpectedly took center stage yesterday. EUR/GBP declined sharply at the very start of the European open, temporarily breaking below key support at the 0.886 area. UK December inflation topped expectations but failed to explain the move from a timing-perspective. Moreover, with inflation still well below the...

Equity Markets Celebrate The Inauguration Of Biden

Market movers today The most important event of the day is the ECB meeting (announcement 13:45 CET, press conference 14:30 CET). That said, we expect it to be a fairly boring one with the ECB taking stock after the big package launched at the last meeting in December. For...

Elliottwave View: SPX Upside Move Has Resumed

Short Term Elliott Wave view in S&P 500 (SPX) suggests the Index ended wave 1 at 3726.70 and pullback in wave 2 ended at 3636.48. Internal of wave 2 unfolded as a zigzag. Wave ((a)) ended at 3685.84, wave ((b)) ended at 3716.65, and wave ((c)) ended at 3636.48....

NASDAQ and S&P 500 hit new record high on strong stock rallies

US stocks open sharply higher today with S&P 500 and NASDAQ hitting new record highs. NASDAQ is clearly leading the way higher. It's staying well inside near term rising channel, without clear upside acceleration so far. But as long as the channel holds, we'd expect further rise to 61.8%...

Sunset Market Commentary

Markets Sterling grabbed the market spotlights in an otherwise calm trading session. At the onset of European dealings, EUR/GBP hovered around levels seen earlier this week, close to, mostly slightly below 0.89. This initially continued after the release of (marginally) higher than expected UK December inflation (headline rising from 0.3%...

Stocks, Precious Metals And Pound Rise

Following Tuesday's rebound in the reflation trade, there has been further follow-through in risk buying this morning. At the time of writing, we are once again seeing higher prices for crude oil, copper, gold, silver and US index futures. European stock indices were mixed on the session, despite the...