Forex-novosti i prognoze od 14-01-2021

• Sees global oil demand in 2021 to increase by 5.9 million barrels per day y-o-y to average 95.9 million barrels per day; the forecast is unchanged from last month’s assessment
• Says its 2021 forecasts “assume a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020”
• Oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels
• Кeports that world oil demand growth in 2020 declined by 9.8 million barrels per day y-o-y to average 90 million barrels per day, adding that fall was marginally less than expected in December
• Warns that uncertainties over impact of coronavirus pandemic remain high
• Says quicker vaccination plans and recovery in consumer confidence provide some upside optimism

James Knightley, the Chief International Economist at ING, notes that the U.S. jobless claims are breaking higher, underlying the strains that Covid continues to exert on the economy. 

"US initial jobless claims jumped to 965k last week – an awful outcome – 176k above expected while continuing claims came in 271k above expectations at 5.27mn. To put this in context the worst reading during the Global Financial Crisis was 665k, so the ongoing stress in the jobs market is clear for all to see. After a fall in employment in December we need to be braced for another decline in jobs in January."

"There will be no real improvement in the jobs market until Covid containment measures are relaxed and businesses have the confidence to hire."

"We will see what Joe Biden's fiscal plan is tonight at 7:15pm ET, but these sorts of economic numbers suggest better management and more money is required to accelerate the vaccination program. Hopefully that will happen, but the likely futile attempt to convict President Trump risks distracting/delaying politicians from the task in hand."

FXStreet reports that economists at Deutsche Bank note that the German economy has proven to more resilient than expected as 2020 GDP fell by 5.0% and they keep their 2021 GDP forecast at +4.5%.

“Germany has – so far – mastered the pandemic much better than other large EMU countries. According to the first estimate by Federal Statistical Office, the impact of the COVID-19 pandemic resulted in a GDP decline of 5.0% in 2020 (consensus -5.2%), which is – contrary to concerns back in spring – less than the -5.7% decline recorded in 2009.”

“We keep our +4.5% GDP forecast for 2021. While the economy seems to have performed better towards the end of last year, as suggest by the smaller-than-expected annual decline in 2020, the outlook for Q1 has become more clouded, given the extension of the lockdown until the end of January and – more importantly – indications by key politicians that at least some of the measures could be extended until Easter, given the unabated pandemic.”

FXStreet reports that Ned Rumpeltin, European Head of FX Strategy at TD Securities, notes that EUR/USD has broken below the key support around 1.2130 turning attention quickly to a potential test of key supports around 1.2060.

“We note that EUR/USD drifted lower overnight, as the EU's slow vaccine rollout and Italian political concerns have also gotten some air time.” 

“Interestingly, the pair now looks to be within easy striking distance of a test of the week’s lows just above 1.2130.” 

“We would expect to see some bids emerge around 1.2100/05, but our attention would quickly shift to how spot behaved if we managed to get down toward the next key support at 1.2060. We also note that 1.2064 is the 38.2% Fibo retrace level of the trading range in place since the early-November lows. The 55-dma lurks just below this at 1.2044.”

U.S. stock-index futures were flat on Thursday, as expectations of a big economic stimulus package from President-elect Joe Biden offset worse-than-expected jobless claims data.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

The Labor Department reported on Tuesday the import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, rose 0.9 percent m-o-m in December, following a revised 0.2 percent m-o-m gain in November (originally a 0.1 percent m-o-m uptick). This was the largest monthly advance since August. Economists had expected prices to increase 0.7 percent m-o-m last month.

According to the report, the December gain was driven by higher prices for both fuel (+7.8 percent m-o-m) and nonfuel (+0.4 percent m-o-m) imports.

Over the 12-month period ended in December, import prices fell 0.3 percent, due to a tumble in import fuel prices (-19.5 percent), which was partially offset by an increase in import nonfuel prices (+1.9 percent).

Meanwhile, the price index for U.S. exports climbed 1.1 percent m-o-m in December, following a revised 0.7 percent m-o-m gain in the previous month (a 0.6 percent m-o-m advance). This was the largest one-month increase since a 1.8-percent rise in June. The December rise was driven by higher prices for both agricultural exports (+0.6 percent m-o-m) and nonagricultural exports (+1.3 percent m-o-m).

Over the past 12 months, the price index for exports rose 0.2 percent, reflecting a surge in prices of agricultural exports (+5.1 percent; the largest gain since June 2017), which more than offset a decline in nonagricultural export prices (-0.2 percent). That was the first 12-month advance since January.

HP (HPQ) downgraded to Underweight from Equal Weight at Barclays; target $22

DuPont (DD) downgraded to Sell from Buy at DZ Bank; target $76

DuPont (DD) downgraded to Neutral from Overweight at JP Morgan; target $70

General Motors (GM) upgraded to Buy from Hold at Argus; target $56

Chevron (CVX) upgraded to Buy from Hold at HSBC Securities; target raised to $105

Intel (INTC) upgraded to Outperform from Market Perform at Cowen; target raised to $75

Intel (INTC) upgraded to Overweight from Equal-Weight at Morgan Stanley; target $70

Intel (INTC) upgraded to Neutral from Underweight at Atlantic Equities; target raised to $55

Intel (INTC) upgraded to Outperform from Market Perform at BMO Capital Markets; target raised to $70

The data from the Labor Department revealed on Thursday the number of applications for unemployment increased more than forecast last week.

According to the report, the initial claims for unemployment benefits increased by 181,000 to 965,000 for the week ended January 9. This was the highest total since mid August.

Economists had expected 790,000 new claims last week.

Claims for the prior week were revised downwardly to 784,000 from the initial estimate of 787,000.

Meanwhile, the four-week moving average of claims rose to 834,250 from a downwardly revised 816,000 in the previous week.

Continuing claims jumped to 5,271,000 from an unrevised 5,072,000 in the previous week.

FXStreet reports that optimism regarding the reflection trade should be broadly supportive of the AUD but the RBA’s QE policy and trade tensions between Australia and China may keep a lid on upside potential. All in all, economists at Rabobank have raised their 12-month forecast to 0.78 for the AUD/USD pair.

“For now we expect that policy settings will remain extremely accommodative. While the reflation trade should keep AUD/USD well supported, RBA policy combined with the fear of trade tensions with China could keep a lid on further gains for AUD/USD.” 

“We have revised up our 12-month target a touch to 0.78 from 0.77.”

The ECB released account of its 9-10 December 2020 monetary policy meeting. It noted that:

• Incoming data and the Eurosystem staff projections suggested more pronounced near-term impact of the pandemic on economic activity and inflation than previously envisaged;
• Market sentiment had improved notably following the news of successful development of vaccines and on account of expected monetary policy measures;
• It was cautioned that uncertainty remained high and positive sentiment could erode quickly in the event of negative news;
• It was widely considered an appropriate and proportional response to prevailing type of shock to increase horizon of net purchases under PEPP until March 2022, extend reinvestments of principal payments from maturing securities purchased under PEPP until the end of 2023, and to add more TLTRO III operations, extending the pandemic-related low interest rate period to June 2022;
• It was agreed that proposed longer horizon of PEPP and TLTRO III was broadly in line with expected duration of the pandemic crisis, continued uncertainty about roll-out of vaccines, and expected return of economic activity to its pre-pandemic level;
• It was also agreed that, on balance, benefits of PEPP purchases and the TLTRO III outweighed the potential costs;
• A more moderate increase in PEPP envelope was advocated by number of members; however, some arguments were also made in favour of larger envelope;
• Concerns were voiced over risks related to developments in exchange rate that might have negative consequences for inflation outlook

USD traded mixed against most of its major counterparts in the European session on Thursday as market participants waited for details of President-elect Joe Biden's COVID-19 relief package.

While the U.S. currency rose against JPY and CHF, it eased off against the rest of major rivals. The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged up 0.03% to 90.38.

CNN reported that President-elect Joe Biden is expected to unveil a $2 trillion stimulus package Thursday evening, which will include direct payments, state and local funding, and vaccine distribution. 

Investors also continued to track political drama in Washington. President Donald Trump was impeached Wednesday by the House of Representatives for his role in "incitement of insurrection". This was the second time Trump has been impeached during his administration. However, the proceedings are not expected to move to the Senate before the inauguration of Biden on January 20.

Meanwhile, the stronger-than-expected trade data from China boosted risk appetite, while dulling demand for the safe-haven assets.

FXStreet notes that although there is scope for further near-term consolidation, the S&P 500 Index still maintains a large bullish “outside week”, which reinforces the uptrend, and economists at Credit Suisse stays bullish for the “measured triangle objective” at 3900. 

“Another consolidation session for the S&P 500 as the uptrend pauses and although this should be allowed to extend further yet, with a large bullish ‘outside week’ in place we stay bullish overall. 

“Resistance above 3827/32 is seen next at 3866/68 and eventually the ‘measured triangle objective’ at 3900. With a cluster of further Fibonacci projection resistances also seen here and stretching up to 3925/30, we maintain our call to look for a cap here for a fresh and likely we think protracted consolidation phase. Should strength instead directly extend, we see resistance next at 4000, then 4070/75.” 

“Support is seen at 3792 initially, then 3777."

• We will continue strong response to the pandemic but measures can only be temporary
• The pandemic situation in Germany is worse than anybody had expected
• We will do everything they can to guarantee that 2021 will be year of recovery
• But economy likely to grow less than previously expected this year
  

EUR/GBP: Resistance at 0.9000 caps for a test of medium-term support at 0.8871/61 - Credit Suisse

FXStreet reports that EUR/GBP is back above the 0.8900 level after it briefly dipped below the big figure. The immediate risk is seen lower for a retest of medium-term support at 0.8871/61, the key series of lows seen through 2020, per Credit Suisse.

“EUR/GBP remains under pressure following its rejection from resistance at 0.9096 and we remain of the view we may be seeing the construction of the ‘right shoulder’ to a larger top. Indeed, further price support at 0.8931/29 has been removed with ease and we look for a retest of medium-term support at 0.8871/61, the key series of lows seen through 2020.” 

“Ultimately, the medium-term support at 0.8871/61 needs to be removed to see a major top established to mark a major turn lower, with support then seen next and initially at the April 2020 low at 0.8671, then 0.8609 – the ‘neckline’ to the late 2019/early 2020 base.” 

EUR/USD: Rising political uncertainty in Italy is unlikely to trigger deeper correction - MUFG

FXStreet reports that the EUR/USD pair is currently testing support from recent lows between 1.2130 and 1.2150. Rising political uncertainty in Italy is expected to have a limited impact on the common currency, therefore, economists at MUFG Bank forecast euro/dollar trading within the range between 1.2000 and 1.2500 over the next months.

“We expect EUR/USD to trade within the higher range between 1.2000 and 1.2500 in the coming months rather than correct more deeply back into the 1.1500 to 1.2000 rage that was in place between July and November.”

“Investor sentiment towards the euro could be challenged in part by rising political uncertainty in Italy although the negative impact is more likely to prove limited. It was announced yesterday that three ministers from the ruling coalition have resigned placing the future of Prime Minister Giuseppe Conte in doubt.”  

“The ECB’s PEPP has played an important role in providing support for the Italian debt market and should continue to dampen any negative fallout from rising political uncertainty after the ECB recently expanded planned purchases up to EUR1.85 trillion. Italy is also set to receive EUR208 B of EU Recovery Funds. There are concerns though that bureaucratic and admin hurdles will get away in the way of spending the EU money when it is dispersed between 2H 2021 until the end of 2023.”

FXStreet reports that economists at Credit Suisse discusses EUR/CHF outlook.

“We would expect safe-haven flows into Switzerland to subside and even reverse in light of the current positive risk environment. The SNB will remain very dovish and stands ready to intervene if necessary.”

“A setback in the COVID-19 crisis and a risk-averse environment would be detrimental to this view. We see EUR/CHF grinding towards 1.1050 and would consider ourselves wrong below 1.0700.”

Reuters reports that a prominent cabinet minister said that Japan could consider fresh economic stimulus, including a possible fourth extra budget, as the government expands a state of emergency amid a record surge in coronavirus infections.

"Suddenly demand has gone, so I think the government, if it is necessary, will be willing to inject money into the economy," Taro Kono, the administrative and regulatory reform minister, said.

Prime Minister Yoshihide Suga on Wednesday expanded a state of emergency from the Tokyo area to seven more prefectures amid criticism that his government had acted too slowly to curb the pandemic.

Those emergency measures could last longer than the one month period initially set by the government, Kono said.

"If it is necessary the government will think about extending it of course. We need to strike the balance between managing the COVID-19 and managing the economy," he said.

Reuters reports that Finance Minister Bruno Le Maire said a growth forecast of 6% for France’s economy in 2021 remained within reach.

“I am really quite confident that the second part of 2021 will be good for the French economy,” Le Maire said.

But he cautioned: “We have to remain humble and cautious because we have been fooled by the virus many times.”

The minister said he was not worried about the initially slow roll-out of the COVID-19 vaccine in France.

FXStreet reports that economists at Credit Suisse believe the AUD/USD pair upside beyond 0.80 might be limited for now.

“Near-total local eradication of COVID-19 and pro-cyclical exposure to Asian demand have been idiosyncratic drivers of AUD strength beyond what is implied by USD weakness. In December the RBA committed to keeping rates on hold for 3 years, a commitment that markets have already started to challenge, pricing in more than one hike by 2023. An upward revision to GDP and CPI forecasts appears more likely than an attempt to weaken the currency, especially if Jobkeeper program is extended beyond Q1 deadline.”

FXStreet reports that economists at Credit Suisse believe that the EUR/GBP and GBP/USD pairs can reach 0.87/88 and 1.40, respectively.

“Our economists anticipate the Bank of England will increase its assets purchases by a further GBP150 B at its 4 February meeting, continuing a policy of fully financing gilt issuance. If the UK is successful in muting the current covid spike and meeting its aggressive vaccination targets, it could yet emerge among the quickest countries to reach herd immunity, perhaps as soon as by the summer.  If so, the prospects for H2 2021 would look very strong, especially as house prices are already buoyant and could remain so with the right tax policy at the 3 March budget.”

“Sterling could yet end up making a push for the 0.87-0.88 EUR/GBP target range we had looked for after a Brexit trade deal with the EU, but with momentum picking up later this quarter. That would also allow for GBP/USD to push to test 1.40.”

CNBC reports that data released on Thursday showed that Germany’s economy contracted by 5% in 2020, according to full-year GDP.

The preliminary figures, which were slightly better than the 5.1% forecast, come after a year of economic turbulence for Germany, and the rest of the world, as the coronavirus pandemic prompted disruption to businesses and large swathes of the economy.

Coronavirus cases have prompted several lockdowns on public life and economic activity in Germany. Chancellor Angela Merkel announced last week that the latest lockdown would be extended until the end of the month.

FXStreet reports that the USD has begun the new year on a slightly better footing. This comes as US yields have ground higher. Economists at TD Securities expects the backup in yields to continue as the composition temporarily shifts to real rates in the short-term.

“We see signs that suggest some tactical relief for a badly bruised greenback while remaining medium-term USD bears. Indeed, we think currency markets are at a crossroads, revealing some kinks of the reflationary theme that has fueled aggressive USD shorts. The impact could leave USD bears wrongfooted on a 2-3% move higher.”

“One key ingredient to upend the USD weaker move would be a seismic shift in the real yield backdrop such that it regained international supremacy. Until then, the sustainability of a USD up move is questionable and likely to be viewed as a countertrend or corrective move, rather than the beginning of a bullish USD outlook.”

AP News reports that Chancellor Angela Merkel’s center-right party is choosing a new leader this weekend, a decision that will help shape German voters’ choice of a successor to Merkel at the helm of the European Union’s biggest economy after her 16-year reign.

Merkel, now 66, has steered Germany, and Europe, through a series of crises since she took office in 2005. But she said over two years ago that she won’t seek a fifth term as chancellor.

Now her Christian Democratic Union party is seeking its second new leader since she quit that role in 2018. That person will either run for chancellor in Germany’s Sept. 26 election or have a big say in who does run.

Current leader Annegret Kramp-Karrenbauer announced her resignation last February after failing to impose her authority on the party. A decision on her successor was delayed repeatedly by the coronavirus pandemic. Eventually, the CDU decided to hold an online convention this weekend.

During today's Asian trading, the US dollar rose slightly against the euro, yen and pound.

The majority of members of the US House of Representatives approved a resolution to impeach US President Donald Trump, now this issue goes to the Senate - the upper house of Congress. 232 congressmen voted for impeachment, 197 against. Among those who voted "for" - 10 Republicans. The resolution accuses Trump of "serious crimes and misdemeanors" in view of last week's riots in the US Capitol. However, the US Senate is expected to either reject the impeachment motion or delay consideration of the issue until the next president comes to power.

The US budget deficit in December was a record $143.562 billion for this month, the Ministry of Finance of the country reported. This is 10.8 times higher than the figure for December 2019, which was $13.286 billion.

Meanwhile, on Thursday, US President-elect Joe Biden is due to present his proposals for new measures to support the country's economy.

Pressure on the euro on Wednesday was exerted by political instability in Italy. The Council of Ministers of the country, headed by Giuseppe Conte, was in a situation of political crisis after two ministers from the Viva Italy party announced their resignations.

Meanwhile, Bank of England Governor Andrew Bailey on Wednesday said there were "many questions" about the move to negative interest rates.

China in 2020 increased exports by 3.6% to a record $2.49 trillion, according to data from the Main Customs Administration of the People's Republic of China. At the same time, imports decreased by 1.1% and amounted to $2.05 trillion.

The ICE index, which tracks the dollar's performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), rose 0.05%.

RTTNews reports that according to the latest Regional Economic Report, the Bank of Japan upgraded its economic assessment of three out of nine regions and downgraded one.

Many regions, while noting that their economy had been in a severe situation due to the impact of the novel coronavirus, there were signs of picking up.

However, the impact of a resurgence of Covid-19 had been pointed out recently, primarily in the services industry, the bank noted.

In the previous October quarterly report, the bank had upgraded the view of eight out of nine regions.

FXStreet reports that UOB Group’s FX Strategists said that NZD/USD is expected to trade in a consolidative theme between 0.7160 and 0.7320 in the next weeks.

Next 1-3 weeks: “We highlighted yesterday that ‘downward pressure has more or less dissipated’ and we expected NZD to ‘trade between 0.7160 and 0.7320 for a period of time’. The rapid manner by which NZD approaches the bottom of the range came as a surprise (overnight low of 0.7167). While there is no change in our view for now, a daily closing below 0.7160 would indicate that NZD could move lower to 0.7130, possibly as low as 0.7080. At this stage, the prospect for such a scenario is not high.”

eFXdata reports that TD Research discusses EUR/USD outlook.

"Asia's export-generated surplus has created an excess of USDs that their central banks are using to swap into other major currencies. This diversification process should establish a new EUR floor. Yet, a move above 1.25 will need the support of cyclical drivers. Another underappreciated aspect falls to the perceptions of relative balance sheet growth. Fed liquidity is supporting real low rates, but the ECB's balance sheet is now growing faster. The implication is that the EURUSD has started to overshoot one of the pair's core monetary drivers.  Given the relative growth outlook, it's likely these dynamics should also anchor EURUSD upside potential," TD Research adds.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2266 (843)

$1.2241 (188)

$1.2221 (591)

Price at time of writing this review: $1.2138

Support levels (open interest**, contracts):

$1.2104 (2314)

$1.2080 (1140)

$1.2050 (1105)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 5 is 46325 contracts (according to data from January, 13) with the maximum number of contracts with strike price $1,2000 (3406);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3818 (1363)

$1.3787 (1036)

$1.3736 (1127)

Price at time of writing this review: $1.3639

Support levels (open interest**, contracts):

$1.3499 (776)

$1.3436 (1687)

$1.3360 (1379)

Comments:

- Overall open interest on the CALL options with the expiration date February, 5 is 10406 contracts, with the maximum number of contracts with strike price $1,4000 (1714);

- Overall open interest on the PUT options with the expiration date February, 5 is 19162 contracts, with the maximum number of contracts with strike price $1,2500 (2185);

- The ratio of PUT/CALL was 1.84 versus 1.83 from the previous trading day according to data from January, 13

* - 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.

RTTNews reports that data from the General Administration of Customs showed that China's exports continued to log robust growth in December driven by higher global demand for pandemic-induced goods.

Exports grew 18.1 percent on a yearly basis in December, faster than the expected growth of 15.0 percent. Nonetheless, the rate of increase slowed from 21.1 percent posted in November.

Driven by domestic demand, imports growth advanced to 6.5 percent from 4.5 percent a month ago. This was also faster than the economists' forecast of +5.0 percent.

As a result, the trade surplus increased to $78.17 billion from $75.4 billion in the previous month. Economists had forecast the surplus to fall to $72.4 billion.

In the whole year of 2020, the trade surplus surged to $535 billion, the highest since 2015. Despite trade disputes, China's surplus with the US rose to $316.9 billion.