|07:00 (GMT)||United Kingdom||Average earnings ex bonuses, 3 m/y||December||3.6%|
|07:00 (GMT)||United Kingdom||Average Earnings, 3m/y||December||3.6%|
|07:00 (GMT)||United Kingdom||ILO Unemployment Rate||December||5%|
|07:00 (GMT)||United Kingdom||Claimant count||January||7|
|07:30 (GMT)||Switzerland||Producer & Import Prices, y/y||January||-2.3%|
|10:00 (GMT)||Eurozone||Harmonized CPI||January||0.3%||0.2%|
|10:00 (GMT)||Eurozone||Harmonized CPI ex EFAT, Y/Y||January||0.2%||1.4%|
|10:00 (GMT)||Eurozone||Harmonized CPI, Y/Y||January||-0.3%||0.9%|
|11:00 (GMT)||United Kingdom||CBI retail sales volume balance||February||-50|
|14:00 (GMT)||U.S.||Housing Price Index, m/m||December||1%|
|14:00 (GMT)||U.S.||Housing Price Index, y/y||December||11%|
|14:00 (GMT)||U.S.||S&P/Case-Shiller Home Price Indices, y/y||December||9.1%|
|15:00 (GMT)||U.S.||Richmond Fed Manufacturing Index||February||14|
|15:00 (GMT)||U.S.||Fed Chair Powell Testimony|
|15:00 (GMT)||U.S.||Consumer confidence||February||89.3||89.6|
|17:30 (GMT)||Canada||BOC Gov Tiff Macklem Speaks|
FXStreet notes that the People’s Bank of China (PBoC) has made significant progress towards an eventual launch of e-CNY. Economists at HSBC think e-CNY is unlikely to have exchange rate implications over the near-term, but it could support CNY internationalisation.
“We believe the e-CNY could be ready for nationwide adoption in 2022 or 2023.”
“Currently, the PBoC is only aiming for the e-CNY to partially replace physical currency in circulation domestically. Like cash, at least initially, it would not pay interest. It is intended for spending, not speculating. Unlike popular digital currencies whose values fluctuate or are fixed to a basket of currencies, it would not be traded on exchanges. Thus, there are basically no exchange rate implications over the near-term.”
“In the long-term, it is possible that the e-CNY could become used outside of China – especially in those countries with weaker institutions, high inflation and economic linkages with China. Foreign demand for the e-CNY would then rise, supporting the yuan, especially against the foreign currencies it is displacing. But this scenario of CNY internationalisation is not a foregone conclusion and we believe other conditions are necessary.”
Board announced on Monday its Leading Economic Index (LEI) for the U.S. went up
0.5 percent m-o-m in January 2021 to 110.3 (2016 = 100), following a revised 0.4
percent m-o-m gain in December (originally a 0.3 percent m-o-m rise).
Economists had forecast an increase of 0.4 percent m-o-m.
“While the pace of increase in the U.S. LEI has slowed since mid-2020, January’s gains were broad-based and suggest economic growth should improve gradually over the first half of 2021,” noted Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “As the vaccination campaign against COVID-19 accelerates, labor markets and overall growth are likely to continue improving through the rest of this year as well. The Conference Board now expects the U.S. economy to expand by 4.4 percent in 2021, after a 3.5 percent contraction in 2020.”
The report also revealed the Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.2 percent m-o-m in January to 103.3, following a 0.1 percent m-o-m uptick in December. Meanwhile, its Lagging Economic Index (LAG) for the U.S. fell 0.6 percent m-o-m in January to 106.2, following a 0.5 percent advance in December.
U.S. stock-index futures fell on Monday, as technology stocks came under pressure again amid climbing U.S. Treasury yields and prospects of accelerating inflation.
Today's Change, points
Today's Change, %
(company / ticker / price / change ($/%) / volume)
ALTRIA GROUP INC.
Amazon.com Inc., NASDAQ
American Express Co
AMERICAN INTERNATIONAL GROUP
Cisco Systems Inc
Citigroup Inc., NYSE
Deere & Company, NYSE
E. I. du Pont de Nemours and Co
Exxon Mobil Corp
FedEx Corporation, NYSE
Ford Motor Co.
Freeport-McMoRan Copper & Gold Inc., NYSE
General Electric Co
General Motors Company, NYSE
Home Depot Inc
HONEYWELL INTERNATIONAL INC.
International Business Machines Co...
Johnson & Johnson
JPMorgan Chase and Co
Merck & Co Inc
Procter & Gamble Co
Starbucks Corporation, NASDAQ
Tesla Motors, Inc., NASDAQ
The Coca-Cola Co
Travelers Companies Inc
Twitter, Inc., NYSE
UnitedHealth Group Inc
Verizon Communications Inc
Wal-Mart Stores Inc
Walt Disney Co
Yandex N.V., NASDAQ
Federal Reserve announced on Monday the Chicago Fed national activity index
(CFNAI), a weighted average of 85 different economic indicators, came in at 0.66
in January 2021, up from a downwardly revised 0.41 in December 2020 (originally
0.52), pointing to faster expansion in economic activity than in the previous month.
That was the highest reading since October 2020.
At the same time, the index’s three-month moving average decreased to +0.34 in January from +0.49 in December.
According to the report, all four broad categories of indicators used to construct the index made positive contributions in January, but three categories fell from December. Production-related indicators made a positive contribution of +0.28 to the CFNAI in January, down from +0.37 in December. Meanwhile, employment-related indicators contributed +0.01 to the CFNAI in January, down from +0.05 in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI reduced to +0.02 in January from +0.05 in December. The contribution of the personal consumption and housing category to the CFNAI improved to +0.35 in January from -0.06 in December.
|09:00||Germany||IFO - Current Assessment||February||89.2||90.6|
|09:00||Germany||IFO - Expectations||February||91.1||94.2|
|09:00||Germany||IFO - Business Climate||February||90.1||92.4|
|11:00||Germany||Bundesbank Monthly Report|
|13:30||U.S.||Chicago Federal National Activity Index||January||0.41||0.66|
GBP traded mixed against its major rivals in the European session on Monday amid lingering optimism that a successful vaccination rollout in Britain would bring an economic recovery from coronavirus damage in the months ahead.
The pound rose JPY,CHF andCAD, changed little against USD, EUR and NZD and fell against AUD
According to Sky News, more than 17.5 million people have received their first dose of a vaccine since the UK's COVID-19 vaccine rollout started in December 2020, and 615,148 have received their second dose. Meanwhile, coronavirus cases and deaths are declining. The UK's government targets to offer all adults the first dose by the end of July.
The speedy vaccine rollout provided encouragement in the markets that the UK's economy will be able to rebound more powerful than its European peers.
In addition, the pound remained supported by the fact of the UK averted a no-deal Brexit by reaching the last-minute trade deal with the EU at the end of 2020 as well as signals from the Bank of England (BoE) that negative interest rates are not to be implemented any time soon.
Market participants are awaiting the announcement of the “roadmap” out of lockdown for England by the prime minister (PM) Boris Johnson later today. The PM's office said on Monday that the criteria to ease lockdown were being met, so the first step of the unlocking plan would proceed from March 8.
FXStreet reports that the Credit Suisse analyst team notes that the NZD/USD pair moved sharply higher on Friday and a clear close above 0.7315 would reassert the core uptrend, with resistance next at 0.7395.
“Post a very near-term consolidation phase, we expect further strength to unfold and a sustained close above the aforementioned 0.7315 would finally reassert the broader core uptrend.”
“Above 0.7315 would see next resistance at 0.7338/45, then 0.7373, ahead of a fresh test of April high at 0.7395, where a first breather might occur.”
“Support is seen initially at 0.7283, beyond which would see a small intraday top completed to suggest mild corrective weakness, with support next at 0.7233/18.”
FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the AUD/USD pair has broken higher from its consolidation phase and sees the next resistance at the 0.7925 level.
“AUD/USD broke higher on Friday through the 0.7820 January high, and we have also now seen a close above here. This suggests the end of the consolidation phase and the resumption of the bull trend.”
“While dips hold over the 55-day ma at 0.7670 and uptrend support offered by the 2020-2021 support line at 0.7709 and the three-month uptrend at 0.7686, it will remain bid.”
“Above the market, we have TD resistance at 0.7925 which, if reached, is likely to hold the initial test.”
FXStreet notes that EM currencies as a group have already recovered all the ground that they lost in the early stages of the pandemic. Economists at Capital Economics expect that EM currencies, in general, will rise further this year due to a strong appetite for risk and a recovering global economy but several headwinds will limit their appreciation.
“We think ‘high-beta’ currencies that are below their pre-pandemic levels against the US dollar - including many commodity exporters - will not necessarily outperform despite a strong appetite for risk. First, Slower vaccine rollouts than in developed markets will hold back domestic recoveries in many of these countries. Second, we do not have a very positive view of commodities despite our expectation for continued economic recovery.”
“Despite these headwinds, we still expect EM currencies, in general, to rise this year, albeit at a slower rate.”
FXStreet reports that FX Strategists at UOB Group notes that the prospects for extra gains in USD/JPY seem to be losing some impulse.
24-hour view: “While downward momentum is not exactly strong, there is room for USD to retest the 105.20 level before a more sustained recovery can be expected. The prospect for a break of the ‘strong support’ at 105.00 is not high. Resistance is at 105.70 followed by 105.90.”
Next 1-3 weeks: “Last Friday (19 Feb, spot at 105.75), we indicated that USD ‘could consolidate for a few days first before pushing higher to 106.35’. We did not quite anticipate the rapid drop to 105.22. Upward momentum has waned quickly and the prospect for further USD strength has diminished considerably. In order to rejuvenate the flagging momentum, USD has to move and stay above 105.90 within these 1 to 2 days or a break of the ‘strong support’ at 105.00 would not be surprising (and would indicate that 106.35 is out of reach this time round).”
FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank suggests that the EUR/GBP pair is heading to the 2016-2021 uptrend at 0.8591 and a break below here would expose the May 2019 low at 0.8465.
“EUR/GBP resumed its down move last week and starts this week with attention on the 2016-2021 uptrend at 0.8591, we look for this to hold the initial test. Failure at 0.8591 would target the 0.8465 May 2019 low.”
“Initial resistance is the accelerated downtrend at 0.8720 and this is the minimum that needs to be overcome to alleviate downside immediate pressure.”
Reuters reports that a UK banking industry body said that keeping the City of London competitive should be an "across the board" objective for Britain's financial regulators after Brexit.
Britain's finance ministry is consulting on future financial regulation after the UK's departure from the European Union cut the City off from the bloc's financial markets but left it free to set its own rules as it competes with New York, Singapore and, indeed, the EU.
UK Finance, which represents high street banks, said the international competitiveness of UK banking would be enhanced by more proportionate regulation.
Mindful that the Bank of England is opposed to a formal competitiveness objective which would require it to consider the ability of UK banks to compete globally, the finance ministry has suggested some activities could be subject to less red tape like burdensome reporting requirements.
Bloomberg reports that Fed Chair Jerome Powell can expect pressure to support the stimulus plan of Democratic lawmakers when they host him this week on Capitol Hill for the first time since regaining control of Congress.
In testimony before the Senate Banking Committee on Tuesday and the House Financial Services panel the following day, Powell will probably play down the risk of inflation despite the size of President Joe Biden’s $1.9 trillion coronavirus relief proposal.
The Fed chief could cite the millions of Americans still out of work due to the pandemic, and repeat that the central bank is not thinking about withdrawing monetary policy support anytime soon.
The fiscal package being weighed by Congress would amount to the largest in U.S. history. That’s raised concern among some economists in both Democratic and Republican circles that its size could lead to unwanted price pressures and financial-market excesses.
Democrats will probably press Powell to repeat his warning that the economy needs more aid. Republicans in response could push him to discuss the risks of prolonged policy stimulus. Volatility in the shares of firms including GameStop Corp. have fanned fears of a bubble.
FXStreet reports that economists at Westpac discuss AUD/USD prospects.
“Rising pressure from two factors arguably drove that explosive move higher in the aussie on Friday. Firstly, the melt up in industrial commodities on the back of the near collapse in the electricity grid in Texas that lifted the likes of aluminium 2.23%, nickel 5.8%, copper 7.3%, and tin 10.8% on the week. Secondly, the upside surprises in dividend announcements for Australian mining companies that tend to announce in USD and offer payment in AUD, and the prospect of even larger dividends later in the year.
“The AUD/USD has now clearly broken out of our expected 0.76 to 0.78 range – even as the USD holds its own ground.”
Reuters reports that british Prime Minister Boris Johnson will chart England’s path out of COVID-19 lockdown on Monday in an effort to gradually reopen its battered economy, aided by one of the fastest vaccine rollouts in the world.
“Our decisions will be made on the latest data at every step, and we will be cautious about this approach so that we do not undo the progress we have achieved so far,” he will say, according to his office.
Lawmakers will have a chance to vote on Johnson’s plan in parliament. Authorities in Scotland, Wales and Northern Ireland, which have responsibility for their own public health decisions, are also expected to ease restrictions in the coming months.
Nadhim Zahawi, the minister in charge of the vaccine rollout, said English schools would reopen on March 8. They have been open only to vulnerable pupils and to key workers’ children since Jan. 5, with all others studying at home.
FXStreet reports that UOB Group’s FX Strategists discuss USD/CNH prospects.
Next 1-3 weeks: “18 Feb, we highlighted that ‘6.4500 is a solid resistance and USD has to break this level before further gains can be expected’. We did not quite anticipate the ease by which USD blew past 6.4500 and surged to 6.4715. The break of the solid resistance coupled with improvement in momentum suggests USD could continue to advance in the coming days. The next resistance level of note is at 6.4920. Overall, the outlook for USD is deemed to be positive as long as it does not move below 6.4200.”
RTTNews reports that survey results from ifo Institute showed that German business confidence strengthened in February.
The business confidence index rose to 92.4 from 90.3 in the previous month. This was better than the economists' forecast of 90.5.
The current conditions advanced to 90.6. This was also above economists' forecast of 89.0.
Likewise, the business expectations indicator improved to 94.2. Economists had forecast the score to rise to 91.8.
Reuters reports that a human resources industry body said that british businesses have the strongest hiring intentions in a year and fewer are planning to make redundancies as the economic outlook has brightened over the past three months.
The Chartered Institute of Personnel and Development said 56% of businesses planned to increase staff numbers in the coming months, up from 53% in late 2020 but below the 66% planning to hire staff a year ago before the pandemic.
The proportion of firms planning redundancies dropped sharply to 20% from 30% in the last quarter.
However the CIPD said unemployment was likely to rise sharply if finance minister Rishi Sunak does not extend jobs support for businesses at his March 3 budget.
The CIPD said hiring plans were strongest in healthcare, finance, education and IT, and weakest in the hospitality sector which is bearing the brunt of the current lockdown.
During today's Asian trading, the US dollar was little changed against the euro and rose against the Japanese yen.
The Japanese yen weakened against the G10 and Asian currencies on the back of risk sentiment, reducing the attractiveness of safe haven assets.
The improvement in sentiment is likely due to progress in the coronavirus vaccination process and the prospect of new stimulus measures, but the focus of investors ' attention is also on the growth of US government bond yields.
The dollar index remains under pressure, as investors wait for fresh economic data to assess the sustainability of the US economic recovery after the downturn caused by the coronavirus pandemic.
The current week will be busy for traders in terms of macroeconomic events, including the head of the US Fed Jerome Powell on Tuesday will present a semi-annual report on monetary policy to the Senate Banking Committee.
The ICE Dollar index, which shows the value of the dollar against six major world currencies, rose by 0.13%.
FXStreet reports that economists at ING Bank expect the USD/CAD pair to slide below 1.26
“Idiosyncratic factors are contributing to put a floor below CAD: the improved outlook for the US economy (thanks to encouraging economic data and vaccination figures), on which Canada heavily relies on, and WTI staying around$60/bbl, despite Thursday’s short-lived sell-off. Considering those factors, adding the global recovery narrative and the USD facing fresh pressure, we think the time is ripe for USD/CAD to move below 1.2600 – a support that has so far held well.
Reuters reports that ratings firm S&P raised New Zealand's sovereign credit ratings by a notch, saying the economy was on a quicker recovery path from the COVID-19 pandemic.
S&P raised New Zealand's foreign and local currency sovereign credit ratings by a notch to 'AA+/A-1+' and 'AAA/A-1+' respectively. The outlook was maintained at stable.
S&P said New Zealand is recovering quicker than most advanced economies because it has been able to contain the spread of COVID-19 better than most others.
"This provides us with better clarity over the extent of the pandemic's damage to the government's balance sheet. We now believe that the government's credit metrics can withstand potential damage from negative shocks to the economy...," S&P added.
CNBC reports that China’s Foreign Minister Wang Yi called on the new U.S. administration to stop the “suppression” of Chinese technology companies, as he laid out conditions for U.S.-China cooperation going forward.
Citing national security concerns, former U.S. President Donald Trump sanctioned dozens of Chinese companies in the last three years.
China would like the U.S. to remove tariffs and sanctions on companies, and “abandon irrational suppression of China’s technological progress, so as to create necessary conditions for China-U.S. cooperation,” Wang said.
Wang also called for the U.S. to support international Chinese students and remove restrictions on cultural groups and media outlets in America.
While it remains unclear what exact action U.S. President Joe Biden might take, he has maintained a firm tone since taking office about a month ago.
Biden told European allies in a speech Friday that “we must prepare for long-term strategic competition with China.”
RTTNews reports that Fitch Ratings maintained Australia's sovereign ratings at 'AAA'.
However, Fitch said the 'negative' outlook on ratings reflects uncertainty around the medium-term debt trajectory following the significant rise in public debt/GDP caused by the response to the pandemic.
The economy is estimated to shrink 2.8 percent in 2020 compared to 'AAA' median contraction of 3.8 percent. The economy is projected to expand by 3.8 percent in 2021 and 2.7 percent in 2022.
The effective fiscal and monetary response has helped the economy to withstand the economic shock caused by the pandemic, the agency observed.
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.2120
Support levels (open interest**, contracts):
- Overall open interest on the CALL options and PUT options with the expiration date March, 5 is 94494 contracts (according to data from February, 19) with the maximum number of contracts with strike price $1,1950 (5754);
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.4011
Support levels (open interest**, contracts):
- Overall open interest on the CALL options with the expiration date March, 5 is 15604 contracts, with the maximum number of contracts with strike price $1,4250 (2008);
- Overall open interest on the PUT options with the expiration date March, 5 is 15161 contracts, with the maximum number of contracts with strike price $1,3100 (1225);
- The ratio of PUT/CALL was 0.97 versus 0.97 from the previous trading day according to data from February, 19
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
|Raw materials||Closed||Change, %|
|09:00 (GMT)||Germany||IFO - Current Assessment||February||89.2|
|09:00 (GMT)||Germany||IFO - Expectations||February||91.1|
|09:00 (GMT)||Germany||IFO - Business Climate||February||90.1|
|11:00 (GMT)||Germany||Bundesbank Monthly Report|
|13:30 (GMT)||U.S.||Chicago Federal National Activity Index||January||0.52|
|14:00 (GMT)||Belgium||Business Climate||February||-7.5|
|15:00 (GMT)||U.S.||Leading Indicators||January||0.3%||0.3%|
|20:30 (GMT)||U.S.||FOMC Member Bowman Speaks|
|21:45 (GMT)||New Zealand||Retail Sales YoY||Quarter IV||8.3%|
|21:45 (GMT)||New Zealand||Retail Sales, q/q||Quarter IV||28%|
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