Market Roundup
•German Feb Current Assessment 90.6, 89.2 previous
•German Feb Ifo Business Climate Index 92.4, 90.5 forecast, 90.1 previous
•German Feb German Business Expectations 94.2, 91.8 forecast, 91.1 previous
Looking Ahead - Economic Data (GMT)
•13:30 Chicago Jan Fed National Activity 0.52 previous
•14:00 French 6-Month BTF Auction -0.635% previous
•14:00 French 3-Month BTF Auction -0.642% previous
•14:00 French 12-Month BTF Auction -0.637% previous
•14:00 Belgium Feb NBB Business Climate -7.5 previous
•16:30 US Jan Leading Index (MoM) 0.5% forecast, 0.3% previous
•16:30 US 6-Month Bill Auction 0.060% previous
Looking Ahead - Economic events and other releases (GMT)
•20:30 US FOMC Member Bowman Speaks
Fx Beat
EUR/USD: The euro rose against dollar on Monday as bets on stronger economic growth and inflation in the months ahead continued to put upward pressure on borrowing costs in the euro area. The so-called reflation trade was again led by long-dated U.S. Treasury yields, which on Monday rose to their highest levels in around a year .That set the tone for euro. Focus was now turning to central bank officials and their thoughts. European Central Bank chief Christine Lagarde is expected to speak later on Monday, while U.S. Federal Reserve Chairman Jerome Powell delivers his semi-annual testimony before Congress on Tuesday. Immediate resistance can be seen at 1.2168 (16th Feb high), an upside break can trigger rise towards 1.2197 (61.8%fib).On the downside, immediate support is seen at 1.2123 (38.2%fib), a break below could take the pair towards 1.2046(38.2%fib).
GBP/USD: The pound hit a new three-year high of $1.4050 in early London trading on Monday, before stabilising around the $1.40 level, as bullish investors bet on the UK’s vaccination rollout bringing about an economic recovery. Sterling rose to its highest levels since April 2018 when it crossed $1.40 on Friday, having risen 2.4% so far in 2021.Analysts attributed the recent strengthening to the UK’s relative success in providing COVID-19 vaccinations, which is expected to help Britain’s economy rebound from its biggest contraction in 300 years.Relief that a no-deal Brexit was avoided at the end of 2020 is also supporting the pound, as is a lessening of fears that the Bank of England could introduce negative interest rates. Immediate resistance can be seen at 1.4057(23.6%fib), an upside break can trigger rise towards 1.4100(Psychological level).On the downside, immediate support is seen at 1.3980(Daily low), a break below could take the pair towards 1.3957 (38.2%fib).
USD/CHF: The dollar declined against the Swiss franc on Monday as vaccine progress, expectations for faster economic growth and inflation sent dollar lower. The U.S. currency, which is often considered a safe asset during times of uncertainty, is likely to fall further as more investors focus on economic recovery once the worst of the coronavirus pandemic passes. Immediate resistance can be seen at 0.9013(38.2%fib), an upside break can trigger rise towards 0.9056(22.6%fib).On the downside, immediate support is seen at 0.8934 (50%fib), a break below could take the pair towards 0.8891(61.8%fib).
USD/JPY: The dollar dipped against the yen on Monday, as expectations for faster economic growth and inflation globally. Investors await Federal Reserve Chairman Jerome Powell's testimony on the Semiannual Monetary Report to Congress starting Tuesday. European Central Bank President Christine Lagarde is also expected to sound dovish in a speech later Monday. Strong resistance can be seen at 105.77 (38.2%fib), an upside break can trigger rise towards 106.30(23.6%fib).On the downside, immediate support is seen at 105.35 (50%fib), a break below could take the pair towards 104.87 (61.8%fib).
Equities Recap
European shares fell 1% on Monday as hopes of a vaccine-led global economic recovery fuelled a rally in commodities and raised concerns over the risk of higher inflation.
At (GMT 1300),UK's benchmark FTSE 100 was last trading down at 0.73 percent, Germany's Dax was down by 0.74 percent, France’s CAC was last up by 0.54 percent.
Commodities Recap
Gold prices gained on Monday after hitting a more than seven-month low in the previous session, as support from a weaker dollar eclipsed pressure from firmer Treasury yields.
Spot gold rose 0.5% to $1,791.50 per ounce by 0733 GMT, having touched its lowest since July 2 at $1,759.29 on Friday. U.S. gold futures gained 0.6% to $1,787.70.
Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.
Brent crude was up 51 cents, or 0.8%, at $63.42 a barrel by 0945 GMT, after gaining nearly 1% last week. U.S. oil rose 45 cents, or 0.8%, to $59.69 a barrel, having fallen 0.4% last week.
