Morning Market Review as of 12 Feb 2021
EUR shows ambiguous dynamics of trading against USD during today’s Asian session, holding near the level of 1.2120. The activity of the “bulls” on EUR has noticeably decreased by the end of the trading week, which is partly due to the recovery of positions on USD. In turn, USD remains under pressure amid general investor enthusiasm and growing demand for high-yielding assets. Macroeconomic statistics from the US released on Thursday provided little support to USD. Initial Jobless Claims fell from 812K to 793K, breaking the psychological level of 800K. At the same time, analysts expected a decrease in the indicator to 757K. Continuing Jobless Claims for the week ending January 29 fell from 4.69M to 4.545M, which also turned out to be slightly worse than market expectations at 4.49M.
GBP declines against USD during today’s Asian session, retreating from record highs updated in the middle of this week. The decrease in the instrument is due to the restoration of the positions of USD, which previously reacted negatively to the speech of the Fed Chair, Jerome Powell who spoke in favor of maintaining a flexible monetary policy, but pointed out the damage that the pandemic has brought to the American labor market. According to the chairman of the regulator, the restoration of the labor market may take years, while additional measures of support and stimulation may be required. Today, British investors are awaiting the publication of macroeconomic statistics from the UK. The focus will be on statistics on GDP dynamics for Q4 2020. The forecasts assume that the British economy will slow down from +16% QoQ to +0.5% QoQ.
NZD is declining against USD in trading this morning session, developing flat dynamics in the short term. USD received a slight impetus to growth after the publication of statistics on the dynamics of jobless claims. At the same time, it should be noted that the data did not fully meet the market’s optimistic forecasts, therefore, growth remains moderate. In turn, the statistics from New Zealand were very encouraging. Business NZ PMI in January rose from 48.7 to 57.5 points, which turned out to be much better than the negative forecasts of a decline to 48.2 points. The Food Price Index for the same period sharply accelerated from +0.1% MoM to +1.3% MoM, exceeding the forecasts of +0.3% MoM.
USD is developing weak gains against JPY in trading during today’s Asian session, recovering from a sharp decline earlier in the week, when the instrument renewed its local lows since January 29. The positions of USD remain under pressure, as there are still not many new factors for its further strengthening. The statistics on the dynamics of jobless claims published yesterday provided little support to USD, since real data significantly differed from market forecasts. At the same time, the dramatic improvement in the epidemiological situation in the US, as well as the rapid spread of vaccines, is likely to make USD look more attractive in the next few weeks.
Gold prices are slightly declining during today’s morning trading session, building on the strong “bearish” momentum that had formed the day before. USD is strengthening across the entire spectrum of the market at the end of the week, but there are not many fundamental reasons for this. The macroeconomic statistics on jobless claims released yesterday in the US failed to meet expectations, although it indicated a further general improvement in the situation on the labor market. In turn, the attractiveness of gold continues to decline in response to rising demand for risk and falling liquidity due to the New Year holidays in China.
Industrial Production Volume. EU, 12:00 (GMT+2)
At 12:00 (GMT+2), data on the volume of industrial production in the EU countries for December will be published. The indicator records the change in the volume of production of industrial goods and utilities in the country. The calculation takes into account the manufacturing and mining industries, as well as the electric power industry. Production is expected to grow by 0.1% MoM and by 1.2% YoY.
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