Market Roundup
• Germany Dec Current Account Balance n.s.a 28.2B, 21.3B previous
• Germany Dec Trade Balance 16.1B, 15.9B forecast, 16.4B previous
•German Dec Imports (MoM) -0.1%, -1.1% forecast, 4.7% previous
•German Dec Exports (MoM) 0.1%,-1.0% forecast, 2.2% previous
•Italian Dec Industrial Production (MoM) -0.2%, 0.3% forecast, -1.4% previous
• Italian Dec Industrial Production (YoY) -2.0%, -1.4% forecast, -4.2% previous
• Greek Dec Industrial Production (YoY) 3.3%,8.6% previous
• Portuguese Dec Trade Balance -3.03B previous
Looking Ahead - Economic Data (GMT)
•13:55 US Redbook (MoM) -1.6% previous
•13:55 US Redbook (YoY) 4.4% previous
•15:00 US Dec JOLTs Job Openings 6.500M, 6.527M previous
Looking Ahead - Economic events and other releases (GMT)
•15:00 EU ECB's Lane Speaks
•17:00 US FOMC Member Bullard Speaks
Fx Beat
EUR/USD: The euro strengthened against dollar on Tuesday as investors weighed the effectivenes of a prospective $1.9 trillion U.S. stimulus package.U.S. President Joe Biden and his Democratic allies in Congress cleared the path for a $1.9 trillion COVID-19 relief package as lawmakers approved a budget outline that will allow them to muscle the plan through without Republican support. Investors' radar was Federal Reserve Chairman Jerome Powell's speech before a virtual Economic Club of New York event at 1900 GMT on Wednesday. The euro extended early gains to rise 0.4% to $1.21025, from a two-month low of $1.9520 touched Friday. Immediate resistance can be seen at 1.2107 (50%fib), an upside break can trigger rise towards 1.2178 (61.8%fib).On the downside, immediate support is seen at 1.2039 (50%fib), a break below could take the pair towards 1.2000 (Psychological level).
GBP/USD: Sterling hit its highest level against the dollar since April 2018 and traded just below eight-month highs against the euro on Tuesday, with analysts citing Britain’s lead in COVID-19 vaccinations as a positive for the currency. Analysts have largely been constructive on the pound - particularly against the euro - this year, noting that Britain’s COVID-19 vaccine rollout has been swifter in comparison to Europe.Helping the pound broadly has also been the Bank of England, which at its meeting last week pushed back at market expectations of negative interest rates.The pound hit $1.3788 against the dollar in early London deals, its highest level against the greenback since Apr. 30, 2018. Immediate resistance can be seen at 1.3787 (Daily high), an upside break can trigger rise towards 1.3800 (23.6%fib).On the downside, immediate support is seen at 1.3729 (5 EMA), a break below could take the pair towards 1.3643 (38.2%fib).
USD/CHF: The dollar declined against the Swiss franc on Tuesday as investors weighed the effects of a prospective $1.9 trillion U.S. stimulus package on bond yields and the dollar. The prospect of higher U.S. fiscal spending could push up treasury yields and drive money away from dollar as investors showed more doubts about the pace of an economic recovery in the United States At (GMT 13:25), Greenback gained 0.12% versus the Swiss franc to 0.9820. Immediate resistance can be seen at 0.8954 (11DMA), an upside break can trigger rise towards 0.8976(38.2%fib).On the downside, immediate support is seen at 0.8928 (50%fib), a break below could take the pair towards 0.8893( 61.8%fib).
USD/JPY: The dollar declined against the Japanese yen on Tuesday as an overnight slide in U.S. Treasury yields raised doubts on the outlook for the greenback against the backdrop of a looming U.S. fiscal stimulus package. Investors have pushed up the dollar recently as Democrats moved to fast-track President Joe Biden’s $1.9 trillion COVID-19 relief package. But some analysts say massive fiscal spending coupled with continued ultra-easy Federal Reserve monetary policy will ultimately prove to be a dollar headwind. Strong resistance can be seen at 104.81 (50%fib), an upside break can trigger rise towards 105.18 (38.2%fib).On the downside, immediate support is seen at 104.47 (61.8%fib), a break below could take the pair towards 104.00(Psychological level).
Equities Recap
European shares rose on Monday, bouncing from their worst weekly decline since October helped by a rise in shares of miners after an ongoing retail frenzy shifted its attention to silver.
At (GMT 13:20),UK's benchmark FTSE 100 was last trading down at 0.03 percent, Germany's Dax was down by 0.44 percent, France’s CAC finished was down by 0.07 percent.
Commodities Recap
Gold prices jumped 1% to a one-week high on Tuesday in response to a weaker dollar and expectations of substantial U.S. fiscal stimulus, while platinum climbed to its highest in more than four years.
Spot gold was up 0.7% to $1,843.16 per ounce at 1227 GMT, after hitting its highest since Feb. 2 at $1,848.40 earlier in the session. U.S. gold futures gained 0.5% to $1,843.30.
Oil prices rose 2% on Monday to their highest in over a year, with Brent nudging past $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus.
Brent rose $1.22, or 2.1%, to settle at $60.56 a barrel, while U.S. West Texas Intermediate rose $1.12, or 2%, to settle at $57.97 a barrel. Both benchmarks were at the highest since January 2020.
