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America’s Roundup: Dollar gains as U.S. economic picture brightens, Gold slips to two month low, Oil jumps $1/bbl as Texas freeze prompts U.S. output drop-February 18th,2021

Market Roundup

• US Jan Core PPI (MoM) 1.2%, 0.2%forecast ,0.1% previous

• Canada Jan CPI (YoY) 1.0%, 0.9% forecast,0.7% previous

• US Jan Retail Sales (YoY) 7.43%, 2.90% previous

• Canada CPI (MoM)  0.6%,0.4%forecast, -0.2% previous

• Canada Common CPI (YoY) 1.3%,1.5% previous

• Canada Trimmed CPI (YoY) 1.8%, 1.6% previous

• US Jan PPI (MoM) 1.7%,1.8%, 0.4%,0.3% previous

• US Jan Core CPI (MoM)  0.5%,-0.4% previous

• US Jan Core CPI (YoY)  1.6%,1.4% forecast, 1.5% previous

• US Jan Core Retail Sales (MoM) 5.9%, 1.0% forecast,-1.4% previous

• US Jan Retail Sales (MoM) 5.3%,  1.1%forecast, -0.7% previous

• US Jan Retail Sales Ex Gas/Autos (MoM)  6.1%,-2.1% previous

• US Jan Core PPI (YoY) 2.0%, 1.1%forecast, 1.2% previous

• US Redbook (YoY) 4.0%,0.7% previous

• US Redbook (MoM) -0.9%, -2.5% previous

• US Jan Industrial Production (MoM)  0.9%,0.5%,1.6%  previous

• US Jan Capacity Utilization Rate 75.6%, 74.8%,74.5% previous

• US Industrial Production (YoY) -1.82%, -3.58% previous

• US Jan Manufacturing Production (MoM)  0.7%forecast, 0.9% previous

• US Dec Business Inventories (MoM) 1.0%, 0.5%forecast,0.5% previous

• US Feb NAHB Housing Market Index 84, 83 forecast, 83 previous

Looking Ahead - Economic Data (GMT)

•23:50 Japan Foreign Bonds Buying 1,027.5B previous

•23:50 Japan Foreign Investments in Japanese Stocks 462.5B previous

•00:30 Australia Jan Employment Change  40.0K forecast, 50.0K previous

•00:30 Australia Jan Full Employment Change   35.7K previous

•00:30 Australia Jan Unemployment Rate 6.5%forecast, 6.6% previous

•00:30 Australia Jan Participation Rate 66.2% forecast, 66.2% previous

Looking Ahead - Economic events and other releases (GMT)

• No significant events

Currency Summaries

EUR/USD: The euro declined against dollar on Wednesday as upbeat economic data and signs of strengthening inflation helped the greenback gain ground single currency. U.S. retail sales, industrial output and producer prices data provided robust surprises to the upside, signaling the economic recovery from the pandemic recession is gaining momentum as vaccine deployment progresses. The U.S. Federal Reserve released minutes from its Jan. 26-27 monetary policy meeting, in which participants expressed the need to “stay vigilant” amid recent signs of economic rebound, discussed expected near term inflation, and affirmed its commitment to keeping accommodative policy in place .Immediate resistance can be seen at 1.2106(25EMA), an upside break can trigger rise towards 1.2140(50%fib).On the downside, immediate support is seen at 1.2065 (38.2%fib), a break below could take the pair towards 1.2000 (Psychological level).

GBP/USD: The British pound held near recent high against dollar on Wednesday as investors bet Britain'sCOVID-19 vaccinations would help its coronavirus-battered economy reopen quickly and recover from its worst hit in 300years. Britain has vaccinated 15.6 million people with a first dose against COVID-19 so far, and bets that its tattered economy could reopen quickly bolstered the pound.Expectations of large fiscal stimulus in the United States have also sent the pound to its highest in two-and-a-half years against the dollar. Immediate resistance can be seen at 1.3909(23.6%fib), an upside break can trigger rise towards 1.4000(Psychological level).On the downside, immediate support is seen at 1.3843 (Daily low), a break below could take the pair towards 1.3895 (38.2%fib).

USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Wednesday, as the recent move higher in U.S. Treasury yields bolstered the greenback and domestic data showed underlying inflation holding well below the Bank of Canada's 2% target.The Canadian dollar  was trading 0.1% lower at 1.2698 to the greenback, or 78.75 U.S. cents, having traded in a range  of 1.2685 to 1.2745. On Tuesday, it touched its strongest intraday level in nearly four weeks at 1.2606. Immediate resistance can be seen at 1.2730(25EMA), an upside break can trigger rise towards 1.2786 (23.6%fib).On the downside, immediate support is seen at 1.2641 (23.6%fib), a break below could take the pair towards 1.2600 (Psychological level).

USD/JPY: The dollar rose against the yen, as U.S. bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation. Soaring U.S. bond yields boosted the dollar, with the 10-year yield rising as high as 1.333% from around 1.20% at the end of last week.The dollar’s index against six other major currencies jumped from Tuesday’s three-week low of 90.117 to last stand at 90.739. The yen, which is sensitive to U.S. yields, reacted the most with the dollar jumping to as high as 106.225 yen  , its highest since September, before retreating to 105.85 yen. Strong resistance can be seen at 106.15 (38.2%fib), an upside break can trigger rise towards 106.52(23.6%fib).On the downside, immediate support is seen at 105.87 (50%fib), a break below could take the pair towards 105.60 (61.8%fib).

Equities Recap

European shares retreated from near one-year highs on Wednesday as concerns over a possible spike in inflation and rising bond yields prompted a pullback in risk-driven assets, while Gucci owner Kering led losses after posting lower sales.

UK's benchmark FTSE 100 closed down by 0.56 percent, Germany's Dax ended down by 1.10 percent, France’s CAC finished the day down by 0.36 percent.

The Nasdaq fell on Wednesday led by a slide in big technology firms as investors rotated out of growth stocks, while awaiting the release of minutes from the U.S Federal Reserve’s January meeting later in the day.

 Dow Jones closed  up by 0.29 percent, S&P 500 closed  lower by 0.03 percent, Nasdaq settled   down by 0.58 percent.

Treasuries Recap

Benchmark 10-year Treasury yields reached a one-year high to trade near pre-pandemic levels, before reversing course even as data pointed to a strengthening economy. The U.S. dollar gained ground against a basket of major currencies.

Commodities Recap

Gold extended its slide to a fifth session on Wednesday, dipping to its lowest in more than two months as bets for an economic recovery boosted the dollar and benchmark U.S. Treasury yields.

 Spot gold  was down 1.2% at $1,773.72 per ounce by 02:16 p.m. EST (1916 GMT), having hit its lowest since Nov. 30 at $1,768.60 earlier.U.S. gold futures  settled down 1.5% at $1,772.80.

Oil prices gained more than $1 a barrel on Wednesday, as frigid Texas temperatures shut production across the largest U.S. crude producing state, with the unusually cold weather expected to hamper output for days or even weeks.

Brent crude  settled at $64.34 a barrel, gaining 99 cents, or 1.6%, while U.S. West Texas Intermediate (WTI) crude  settled at $61.14 a barrel, rising $1.09, or 1.8%. Both benchmarks were at their highest levels since January last year.



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