Forex-novosti i prognoze od 22-01-2021

The U.S. Energy Information Administration (EIA) revealed on Friday that crude inventories surged by 4.351 million barrels in the week ended January 15. Economists had forecast a drop of 1.167 million barrels.

At the same time, gasoline stocks fell by 0.260 million barrels, while analysts had expected an advance of 2.771 million barrels. Distillate stocks rose by 0.458 million barrels, while analysts had forecast an increase of 1.214 million barrels.

Meanwhile, oil production in the U.S. remained unchanged at 11.000 million barrels a day.

U.S. crude oil imports averaged 6.0 million barrels per day last week, down by 194,000 barrels per day from the previous week.

The National Association of Realtors (NAR) announced on Friday that the U.S. existing home sales rose 0.7 percent m-o-m to a seasonally adjusted rate of 6.76 million in December from a revised 6.71 million in November (originally 6.69 million).

Economists had forecast home resales decreasing to a 6.55 million-unit pace last month.

In y-o-y terms, existing-home sales surged 22.5 percent in December

According to the report, two of the four major regions recorded m-o-m gains in existing-home sales in December but all four regions rose at double-digit rates from one year ago. The median existing-home price for all housing types in December was $309,800, up 12.9 percent from December 2019. Single-family home sales stood at a seasonally-adjusted annual rate of 6.03 million in December, up 0.7 percent from 5.99 million in November, and up 22.8 percent from one year ago. The median existing single-family home price was $314,300 in December, up 13.5 percent from December 2019. Meanwhile, existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 730,000 units in December, up 1.4 percent from November and up 17.7 percent from one year ago. The median existing condo price was $272,200 in December, an advance of 6.9 percent from a year ago.

Existing-home sales totaled 5.64 million in 2020, up 5.6 percent y-o-y. That was the highest level since 2006.

"Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic," noted Lawrence Yun, NAR's chief economist. "What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market," he added.

Preliminary data released by IHS Markit on Friday revealed that U.S. private sector business activity expanded strongly during January 2021.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 59.1 in January, up from 57.1 in December. This was the highest reading on record. Economists had expected the reading to drop to 56.5. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. Alongside stronger expansions in production and new exports orders, which where the highest since 2014, the headline figure was driven up by another substantial deterioration in vendor performance, the report said. In addition, the rate of job creation was the sharpest for two years and strong overall.

The Markit flash services purchasing manager's index (PMI) rose to 57.5 in January from 54.8 in the previous month. The rate of expansion was the second-steepest since March 2015 and strong overall. Economists had expected the reading to decrease to 53.6. The rise in output was often linked to another monthly increase in customer demand.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 58.0 in January, up from 55.3 in December, pointing a regain in growth momentum at the start of 2021, as the pace of increase quickened to the second-fastest since March 2015.

Chris Williamson, Chief Business Economist at HIS Markit noted: “US businesses reported a strong start to 2021, buoyed by hopes that vaccine developments will mean the worst of the pandemic is behind us, and that the new administration will provide a stable and supportive environment for stronger economic growth.”

U.S. stock-index futures fell on Friday, as investors digested PMI data, which indicated that economic activity around the world slowed notably in January due to recent COVID-triggered lockdowns, as well as quarterly earnings reports from Intel (INTC) and IBM (IBM).

Global Stocks:

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

Microsoft (MSFT) initiated with a Buy at Goldman; target $285

Intel (INTC) target raised to $79 from $75 at Cowen

Ford Motor (F) upgraded to Overweight from Neutral at JP Morgan; target $14

Walt Disney (DIS) upgraded to Buy from Neutral at UBS; target raised to $200

Statistics Canada announced on Friday that the Canadian retail sales rose 1.3 percent m-o-m to CAD55.19 billion in November, following an unrevised 0.4 percent m-o-m advance in October.

Economists had forecast a 0.1 percent m-o-m uptick for November.

According to the report, sales increased in 7 of 11 subsectors in November, accounting for 53.4 percent of total retail sales. Sales at food and beverage stores and e-commerce sales contributed the most to the growth, surging 5.9 percent m-o-m and 2.7 percent m-o-m respectively. Meanwhile, sales at motor vehicle and parts dealers declined 0.9 percent m-o-m, recording their first monthly drop since April. Excluding motor vehicle and parts dealers, retail sales jumped 2.1 percent m-o-m in November compared to a flat m-o-m performance in October and economists’ forecast for a 0.3 percent m-o-m increase. Core retail sales, which excludes gasoline stations and motor vehicle and parts dealers, increased 2.6 percent m-o-m in November after advancing 0.3 percent m-o-m in October.

In y-o-y terms, Canadian retail sales climbed 7.5 percent in November, following a revised 7.3 percent increase in October (originally a 7.5 percent surge).

• The vast majority of the public continue to abide by rules and do isolate when they are asked
• I would point to fact that more people are being tested than ever before
• People are coming forward for tests and the vast majority continue to abide by rules

FXStreet reports that according to the Credit Suisse analyst team, the S&P 500 Index is set to be capped for now at 3900 and a correction lower can emerge from here.

“S&P 500 has paused beneath next flagged Fibonacci and potential trend resistance at 3866/68. Although momentum is still unable to confirm the new highs, with a large bullish ‘outside week’ in place from the beginning of the year, we still look for a break above 3868 for a move to our long-held and core ‘measured triangle objective’ from October at 3900.” 

“With daily and weekly DeMark sequential exhaustion signals all but in place now, 10yr US Inflation Breakevens being capped at their next major resistance and our target and with a cluster of further Fibonacci projection resistances seen here and stretching up to 3930, we maintain our bias of looking for a correction to then emerge from 3900.” 

FXStreet notes that USD/CNY has shown some two-way volatility, amid higher longer-term US yields and uncertainty around US-China relations. In the view of economists at HSBC, the yuan will remain resilient this year, even when China’s economic outperformance is expected to narrow in the second half of 2021.

“USD/CNY has exhibited some two-way volatility lately, as higher longer-term US treasury bond yields have caused some debate on the outlook for the USD. We believe there is also uncertainty around how US-China relations could evolve under the new US administration. The Biden administration is said to be preparing to address China's unfair trade and investment practice, while the US still views China as its most important strategic competitor.”

“We do not expect significant CNY appreciation from current rich levels. Recently, Chinese authorities adjusted its FX policy, such as encouraging outflows and promoting more two-way portfolio flows. We have long argued that China’s capital account liberalisation will be two-way. Locals’ demand for external assets, once allowed by regulators, will be significant. The re-listing of American depositary receipts on the Hong Kong Exchanges and Clearing Limited (HKEx) and the potential launch of Southbound Bond Connect could both lead to large outbound investment.”

“We maintain our view that the yuan will remain resilient this year, while the level of USD/CNY in the second half of the year is expected to be slightly higher than that in the first half, as the yield differential between China and the US is expected to narrow.”

GBP declined against most of its major rivals in the European session on Friday, as investor sentiment was weighed down by a series of grim economic data out of the UK. It fell against USD, CHF, EUR and JPY, rose against AUD, and changed little against CAD and NZD.

The report from IHS Markit and the Chartered Institute of Procurement & Supply (CIPS) showed that Britain suffered its steepest drop in business activity since May in January due to the imposition of a third national lockdown at the beginning of the year. According to the report, the headline seasonally adjusted IHS Markit/CIPS Flash UK Composite Output Index came in at 40.6 in January 2021, down sharply from 50.4 in December 2020 and well below the 50.0 threshold that indicates growth. The indicator was the lowest since May 2020 and below economists' forecasts of 45.5. Nonetheless, the speed of the downturn in the private sector output was softer than at the start of the pandemic (13.8 in April).

Meanwhile, the data released by the Office for National Statistics (ONS), revealed the UK's retail sales rose 0.3 percent m-o-m in December, following a 4.1 percent y/y drop in November. The pace of growth, however, was much slower than the economists' forecast of +1.2 percent y/y. In y-o-y terms, retail sales growth accelerated to 2.9 percent in December from 2.1 percent in November. Economists had expected a 4 percent y-o-y jump in retail sales for December.

FXStreet notes that Brent crude oil prices are currently close to $55/bbl, having started the year at $52/bbl. Suvro Sarkar, Industry Analyst at DBS Bank, revises up the average Brent Crude Oil price forecast for 2021 to $55-60/bbl and introduces the 2022 average Brent Crude Oil price forecast of $60-65/bbl. 

“Brent averaged around $43/bbl in 2020. We are likely to see a much better year for oil in 2021, as demand recovers (by around 6mmbbpd by our projections), while supply remains curtailed by OPEC+ production cut agreements (increasing by around 3.0mmbpd by our projections, less than the demand increase). While oil demand is still not expected to recover close to pre-covid levels in 2021; the pace of demand growth is nevertheless expected to outstrip the pace of supply growth in 2021, leading to inventory drawdowns and stronger oil prices overall.”

“With a stronger start to the year in our forecasts now, we thus raise our average 2021 Brent crude oil price forecast to$55-60/bbl. We also introduce 2022 average Brent crude oil forecast of$60-65/bbl on the assumption that air travel recovers closer to normal levels in 2022, OPEC+ discipline stays and US shale growth is contained under the new Biden administration.”

Intel (INTC) reported Q4 FY 2020 earnings of $1.52 per share (versus $1.52 per share in Q4 FY 2019), beating analysts’ consensus estimate of $1.11 per share.

The company’s quarterly revenues amounted to $20.000 bln (-1.0% y/y), beating analysts’ consensus estimate of $17.478 bln.

The company also issued upside guidance for Q1 FY 2021, projecting EPS of $1.10 versus analysts’ consensus estimate of $0.96 and revenues of $17.50 bln versus analysts’ consensus estimate of $16.36 bln.

INTC fell to $60.00 (-3.94%) in pre-market trading.

FXStreet reports that FX strategists at UOB Group believe that the upside momentum in USD/CNH could still reach the 6.5200-region in the next weeks.

24-hour view: “We expected USD to weaken further yesterday but we were of the view that ‘any decline is expected to face solid support at 6.4450’. However, USD traded in a relatively quiet manner between 6.4561 and 6.4705. Upward momentum is beginning to build-up and USD is likely to edge higher from here. That said, any advance is expected to face solid resistance at 6.4880. Support is 6.4600 followed by 6.4550.”

Next 1-3 weeks: “...while upward momentum has been dented, there is still chance for USD to move to 6.5200. Only a break of 6.4450 (no change in ‘strong support’ level) would indicate that USD is not ready to move to 6.5200.”

IBM (IBM) reported Q4 FY 2020 earnings of $2.07 per share (versus $4.71 per share in Q4 FY 2019), beating analysts’ consensus estimate of $1.88 per share.

The company’s quarterly revenues amounted to $20.367 bln (-6.5% y/y), missing analysts’ consensus estimate of $20.630 bln.

The company also said it expects to grow revenue in FY 2021 after a 4.6% y/y decline in FY 2020.

IBM fell to $121.69 (-7.57%) in pre-market trading.

FXStreet reports that the Credit Suisse analyst team notes that USD/CAD has reversed back higher after testing below the crucial 78.6% retracement at 1.2620, keeping the rangebound environment intact.

“USD/CAD saw another test below the crucial support area at the 78.6% retracement of the entire 2017/2020 surge at 1.2620. However, the market reverted mildly back higher as expected, posting a small bullish ‘hammer’ and keeping the rangebound environment in place for now, which is also supported by the fact that daily momentum is increasingly divergent and now holds a triple bullish divergence.” 

“Resistance is seen initially at 1.2700/02, then 1.2717, where we would expect to see fresh sellers again. Nevertheless, a break above here would expose 1.2764, removal of which would see 1.2835 next. If reached, this should be a tougher barrier to break, and only beyond here would see a ‘wedge’ small base completed.” 

Reuters reports that news magazine Der Spiegel said that the German government expects the economy to grow by 3% this year, which is a downward revision from last autumn’s estimate of 4.4% due to the second shutdown to fight the spread of the coronavirus pandemic.

German Economy Minister Peter Altmaier is due to present the government’s official forecast next week.

FXStreet reports that economists at CIBC Capital Markets look for further strength in the AUD/USD.

“From present levels, we target further gains in AUD/USD, to 0.7850 in Q1. A rebound in domestic economic activity, underpinned by accommodative monetary policy, was a strong driver of AUD strength to date. We anticipate that support to continue.”

“On trade, the contribution of iron ore cannot be dismissed, any talk of that market between Australia and China would be concerning. Unless that is the case, we remain bullish and buyers of AUD weakness.”

Reuters reports that a European Central Bank survey showed that the pandemic-stricken euro zone economy is likely to rebound this year but at a slower pace than expected only a few months ago.

Economists polled in the ECB’s quarterly Survey of Professional Forecasters put real GDP growth in the euro zone at 4.4% this year, down from 5.3% in the previous edition of the survey.

As for next year, the survey showed the economy was now expected to expand by 3.7%, compared to 2.6% in the October poll.

FXStreet reports that economists at Rabobank discuss EUR/GBP prospects.

“The forthcoming BoE meeting on February 4 may bring some additional colour to the inflation outlook in the UK. The fact that the UK’s lockdown could extent into March and given evidence that its rapid vaccine programme is still a way off from halting the pandemic in the country, we see scope for additional gains in the pound to be limited near-term. We retain our forecast that EUR/GBP is likely trade in the 0.89/0.88 region in the coming months and may not see a return to the 0.87 level until later in the year.”

According to the report from IHS Markit/CIPS, UK private sector companies signalled a renewed downturn in business activity during January, which largely reflected national lockdown restrictions due to the coronavirus disease 2019 (COVID19) pandemic. The service economy was hard-hit by restrictions on trade and reduced consumer spending at the start of the year, with business activity falling at the fastest pace for eight months. Manufacturers recorded a fractional rise in production volumes, but the rate of expansion eased sharply since December. Weaker export orders and short-term supply chain difficulties contributed to the slowdown in output growth, according to survey respondents. Apart from April 2020, latest data pointed to the largest increase in suppliers' delivery times since the UK Manufacturing PMI survey began almost 30 years ago.

Despite a swift return to falling business activity at the beginning of the year, latest data indicated that UK private sector companies remain upbeat about their prospects on a longer-term basis. The index measuring business expectations for the next 12 months picked up slightly since December and was the highest since May 2014. Continuing the trend seen in recent months, survey respondents overwhelmingly attributed their positive business expectations to a successful vaccine roll-out during 2021.

The headline seasonally adjusted IHS Markit / CIPS Flash UK Composite Output Index – which is based on approximately 85% of usual monthly replies – registered 40.6 in January, down sharply from 50.4 in December and well below the neutral 50.0 threshold. The index was the lowest since May 2020 and much weaker than in the second national lockdown period during November (49.0). However, the speed of the downturn in UK private sector output was still softer than at the start of the pandemic (13.8 in April 2020), with many businesses citing successful efforts to adapt and prepare for new COVID-19 restrictions.

According to the report from IHS Markit, eurozone business activity fell at an accelerated rate in January as companies continued to struggle amid the ongoing pandemic and related restrictions. The rate of factory output growth weakened to the slowest since the recovery began and the service sector saw output fall at the second-fastest rate since May.

The headline flash Eurozone Composite PMI fell from 49.1 in December to 47.5 in January, indicating a third successive monthly decline in business activity and the steepest deterioration since November. However, the last three months have seen the PMI remain higher than during the initial months of the pandemic in the spring of last year, suggesting that the economic impact of the second wave of virus infections has so far been considerably less severe than in the first wave. The worsening performance in January was broad based across the eurozone, albeit with marked variations. 

The greatest signs of resilience amid the ongoing pandemic continued to be evident in manufacturing. Eurozone factory output expanded for a seventh consecutive month in January thanks to sustained growth of new orders, exports and backlogs of work. Although the overall pace of factory output growth slowed to the lowest in seven months, it remained among the highest seen over the past three years.

According to the report from IHS Markit, tougher measures to control the spread of coronavirus disease 2019 (COVID-19) infections further depressed activity across Germany’s service sector at the start of the year, although overall economic output in the country continued to see support from growth in the manufacturing sector and rising goods exports. Data also showed employment increasing slightly in January as firms’ expectations for the year ahead improved.

Elsewhere, January’s survey revealed unprecedented delays on the delivery of inputs to manufacturers amid growing pressure on supply chains and widespread freight disruption.

The headline Flash Germany Composite Output Index fell to 50.8 in January, down from 52.0 in December and its lowest reading for seven months.

Sector level data showed services activity dropping for the fourth month in a row, and at a slightly quicker rate than in December (index at 46.8 from 47.0). The Manufacturing Output Index remained in growth territory in January, though slipped to a five-month low of 58.6 to show a further loss of momentum in the goods-producing sector.

During today's Asian trading, the US dollar stabilized against the euro, but rose against most Asian currencies on the back of increased demand for safe haven assets due to the continued increase in the incidence of COVID-19 worldwide and new quarantine measures.

Hong Kong on Friday for the first time announced the introduction of a partial lockdown due to the worsening situation with the coronavirus. An outbreak of the disease has also been noted in China, which raises the concerns of experts, given the approach of the holidays on the occasion of the New Year according to the Lunar calendar.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.1%.

On the eve of the European Central Bank (ECB) kept key interest rates, as well as the volume of the emergency program of asset repurchases. ECB President Christine Lagarde said during a press conference following the meeting that the renewed increase in the incidence of COVID-19 and the re-introduction of restrictive measures in many countries of the euro zone undermines economic activity and creates risks for the economy in the short term.

Reuters reports that Goldman Sachs said that the new U.S. administration's plans for large fiscal spending and little urgency to lift sanctions on Iran are constructive for oil and gas prices.

"On our estimates, a $2 trillion stimulus over 2021-22 would... boost U.S. demand by about 200,000 barrels per day," the bank said in a note.

U.S. President Joe Biden's proposed $1.9 trillion stimulus package aims to jump-start the economy and accelerate vaccines distribution to control COVID-19, which has hammered global oil demand.

The bank also said that since the Biden administration is looking to strengthen and lengthen nuclear constraints on Iran, the country's oil exports would remain moderate this year and at 0.5 million barrels per day in the second half of 2021.

"Delays in a full return of Iran production would reinforce our bullish oil outlook since we already forecast a tight 2022 crude market with low OPEC spare capacity," Goldman said.

eFXdata reports that Credit Agricole CIB Research maintains a bearish bias on CHF.

"When it comes to the SNB, we expect it to continue doing its utmost to prevent policy differentials from diverging. After all, the overvalued currency itself is treated as a key driver of overly tight monetary conditions which suggests a policy mix consisting of negative rates and currency intervention if needed will stay in place for longer and regardless of any external criticism. We continue to target EUR/CHF at around 1.1200 by end 2021 with more upside expected in 2022," CACIB adds.

According to the report from Office for National Statistics, in December 2020, retail sales volumes increased by 0.3% when compared with November 2020, resulting in an increase of 2.7% when compared with February's pre-lockdown level. Economists had expected a 1.2% increase.

Clothing stores reported strong monthly growth of 21.5%, rebounding from a large fall in November 2020 when stores were closed because of coronavirus  (COVID-19) restrictions.

The year-on-year growth rate in the volume of retail sales increased by 2.9% when compared with December 2019; non-store retailers reported the largest year-on-year growth at 43.5% while food stores also saw strong annual growth of 4.4%.

In 2020 as a whole, estimates of the quantity bought decreased by 1.9% when compared with 2019, the largest year-on-year fall on record.

Clothing stores (negative 25.1%), fuel stores (negative 22.2%), "other stores" (negative 11.6%) and department stores (negative 5.2%) all recorded record annual declines in sales volumes in 2020 when compared with 2019, non-store retailing, however, saw a record annual increase of 32.0% for 2020.

Total online retailing values increased by 46.1% in 2020 when compared with 2019, the highest annual growth reported since 2008.

Food stores (79.3%), "other stores" (73.9%), household goods stores (73.4%) and department stores (65.9%) all recorded record annual increases in values of internet sales in 2020 when compared with 2019.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2281 (497)

$1.2249 (944)

$1.2223 (286)

Price at time of writing this review: $1.2159

Support levels (open interest**, contracts):

$1.2123 (2258)

$1.2099 (1212)

$1.2069 (1080)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 5 is 46930 contracts (according to data from January, 21) with the maximum number of contracts with strike price $1,2000 (2892);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3826 (1696)

$1.3801 (1564)

$1.3765 (1126)

Price at time of writing this review: $1.3674

Support levels (open interest**, contracts):

$1.3562 (784)

$1.3523 (260)

$1.3481 (1687)

Comments:

- Overall open interest on the CALL options with the expiration date February, 5 is 11540 contracts, with the maximum number of contracts with strike price $1,4000 (1722);

- Overall open interest on the PUT options with the expiration date February, 5 is 19673 contracts, with the maximum number of contracts with strike price $1,2500 (2183);

- The ratio of PUT/CALL was 1.70 versus 1.71 from the previous trading day according to data from January, 21

* - 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.