World Shares Ease as Yields and Oil Ring Inflation Alarm

By Danilo Masoni and Wayne Cole

MILAN/SYDNEY (Reuters) – These concerns overshadowed the prospect that stimulus would give another boost to the world’s No.1 economy, likely helping global growth rebound faster from the COVID-19 downturn.

Analysts expect a sharp acceleration in inflation, stoked in part by the latest spike in oil prices, which on Monday climbed above $70 for the first time since the pandemic began.

“Between reflation, inflation risk and equity valuations, there’s plenty of reasons for the market to be jittery over the bond re-pricing,” said Natixis strategist Florent Pochon.

“Equity valuations will of course remain a burning issue in particular for overly rich sectors,” he also said, adding however that sell-offs should be seen as buying opportunities, given that central banks remain “structurally dovish”.

The MSCI world equity index fell 0.1% by 0828 GMT, as gains in European cyclical and travel stocks were offset by losses in Asia.

Chinese stocks posted their biggest decline in seven months, down 3.5%, on concerns that Chinese officials could tighten policy to rein in lofty valuations.

Nasdaq futures fell 2% in early European trade, reversing early gains, while S&P 500 futures fell 1% as investors looked past the benefits of the fiscal package.

According to JPMorgan, every $1 trillion of fiscal stimulus adds around $4-$5 to companies’ earnings per share, implying 6-7% upside for the remainder of the year.

Equity investors had taken heart on Friday from U.S. data showing nonfarm payrolls surged by 379,000 jobs last month, while the jobless rate dipped to 6.2% in a positive sign for incomes, spending and corporate earnings.

U.S. Treasury Secretary Janet Yellen tried to counter inflation concerns by noting the true unemployment rate was nearer 10% and there was still plenty of slack in the labour market.

Yet yields on U.S. 10-year Treasuries still hit a one-year high of 1.626% in the wake of the data, and stood at 1.594% on Monday.

U.S. yields increased a hefty 16 basis points for the week, while German yields actually dipped 4 basis points.

The European Central Bank meets on Thursday amid talk it will look at ways to restrain further increases in euro zone yields.

The diverging trajectory on yields boosted the dollar against the euro, which fell to a three-month low of $1.1891.

BofA analyst Athanasios Vamvakidis argued the potent mix of U.S. stimulus, faster reopening and greater consumer firepower was a clear positive for the dollar.

“Including the current proposed stimulus package and further upside from a second-half infrastructure bill, total U.S. fiscal support is six times greater than the EU recovery fund,” he said. “The Fed is also supportive with U.S. money supply growing two times faster than the Eurozone.”

The dollar index shot up to levels not seen since late November and was last at 92.06, well above its February trough of 89.677.

The U.S. currency also gained on the low-yielding yen, reaching a nine-month top of 108.63, and was last changing hands at 108.4.

The jump in yields has weighed on gold, which offers no fixed return, and pushed it down 0.1% at $1,698 an ounce and just above a nine-month low.

Oil prices were up the highest levels in more than a year after Yemen’s Houthi forces fired drones and missiles at the heart of Saudi Arabia’s oil industry on Sunday, raising concerns about production.

Prices had already been supported by a decision by OPEC and its allies not to increase supply in April.

Brent climbed 1.1% to $70.14 a barrel, while U.S. crude rose 1% to $66.8 per barrel.

(Reporting by Danilo Masoni and Wayne Cole; Editing by Alex Richardson)

The Crypto Daily – Movers and Shakers – March 8th, 2021

Bitcoin, BTC to USD, rallied by 4.31% on Sunday. Following a 0.07% gain from Saturday, Bitcoin ended the week up by 12.62% to $51,000.00.

A bullish start to the day saw Bitcoin rally to late afternoon high $51,350.0 before hitting reverse.

Bitcoin broke through the first major resistance level at $49,679 and the second major resistance level at $50,498.

The pullback saw Bitcoin slide back to $49,700 levels before a late rally.

Finding support at the first major resistance level at $49,679, Bitcoin rallied to a final hour intraday high $51,442.0.

Bitcoin broke back through the second major resistance level at $50,498 to wrap up the week at $51,000 levels.

The near-term bullish trend remained intact supported by the return to $51,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $24,751 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a bullish day on Sunday.

Binance Coin  (+5.95%) and Crypto.com Coin (+5.53%) led the way.

Bitcoin Cash SV (+4.11%), Ethereum (+4.63%), and  Litecoin (+4.30%) also found strong support.

Cardano’s ADA (+0.02%), Chainlink (+1.67%), Polkadot (+0.87%), and Ripple’s XRP (+0.33%) trailed the front runners, however.

For the week, it was a mixed week for the majors, however.

Cardano’s ADA slid by 14.14% to lead the way down, with Polkadot falling by 7.97% to buck the trend.

It was a bullish week for the rest of the majors.

Crypto.com Coin and Ethereum rallied by 20.78% and by 21.55% respectively to lead the way.

Binance Coin (+13.89%), Chainlink (+15.63%), Litecoin (+15.20%), and Ripple’s XRP (+11.88%) also found strong support.

Bitcoin Cash SV (+8.32%) trailed the front runners, however.

In the week, the crypto total market fell to a Monday low $1,347bn before rising to a Wednesday high $1,600bn. At the time of writing, the total market cap stood at $1,567bn.

Bitcoin’s dominance rose to a Tuesday high 62.40% before falling to a Saturday low 60.44%. At the time of writing, Bitcoin’s dominance stood at 61.13%.

This Morning

At the time of writing, Bitcoin was up by 1.18% to $51,603.0. A mixed start to the day saw Bitcoin fall to an early morning low $50,891.0 before rising to a high $51,682.0.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a mixed start to the day.

Binance Coin (-0.44%), Bitcoin Cash SV (-0.75%), and Polkadot (-0.74%) saw red early on.

It was a bullish start for the rest of the majors, however.

At the time of writing, Crypto.com Coin was up by 2.25% to lead the way.

BTCUSD 080321 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid a fall through the pivot level at $50,446 to bring the first major resistance level at $51,996 into play.

Support from the broader market would be needed for Bitcoin to break out from this morning’s high $51,682.0.

Barring an extended crypto rally, the first major resistance level and resistance at $52,000 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $54,000 before any pullback. The second major resistance level sits at $52,993.

Failure to avoid a fall through the $50,446 pivot would bring the first major support level at $49,449 into play.

Barring an extended sell-off on the day, Bitcoin should steer clear sub-$49,000 levels. The second major support level sits at $47,899.

European Equities: German Industrial Production and China in Focus

Economic Calendar:

Monday, 8th March

German Industrial Production (MoM) (Jan)

Tuesday, 9th March

German Trade Balance (Jan)

French Non-Farm Payrolls (QoQ) (Q4)

Eurozone GDP (QoQ) (Q4) Final

Eurozone GDP (YoY) (Q4) Final

Thursday, 11th March

ECB Interest Rate Decision (Mar)

ECB Press Conference

Friday, 12th March

German CPI (MoM) (Feb)

Spanish CPI (YoY) (Feb)

Spanish HICP (YoY) (Feb)

Eurozone Industrial Production (MoM) (Jan)

The Majors

It was a bearish end to the week for the European majors on Friday.

On Friday, the DAX30 fell by 0.96%, with the CAC40 and the EuroStoxx600 ending the day with losses of 0.82% and 0.78% respectively.

Economic data from Germany and the U.S failed to reverse losses from early in the day, as U.S Treasury yields climbed further.

For the European markets, it had also been the first opportunity to respond to FED Chair Powell’s post-European session speech.

A lack of commitment to address yields led to a pullback in the U.S equities, which spilled into the European session.

The Stats

It was a relatively busy day on the economic calendar on Friday.  German factory orders were in focus going into the European open.

In January, factory orders increased by 1.4%, coming in ahead of a forecasted 0.7% increase. In December, orders had fallen by 1.9%.

According to Destatis,

  • Compared with January 2020, new orders were up 2.5% and by 3.7% when compared with February 2020.
  • Domestic orders slid by 2.6%, while foreign orders increased by 4.2%, month-on-month.
  • New orders from the euro area rose 3.9%, with new orders from other countries jumping by 4.4%.
  • Manufacturers of intermediate goods saw new orders increase by 0.2%, with new orders of capital goods up 3.3%.
  • Consumer goods manufacturers, however, reported a 5.8% slide in new orders.

From the U.S

It was a busier session, with official government labor market figures for February in focus late in the European session.

Nonfarm payrolls impressed, with a 379K jump in February. The better than expected rise took the unemployment rate down from 6.3% to 6.2%.

In January, nonfarm payrolls had risen by a more modest 166k.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Volkswagen rallied by 3.68%, with Daimler rising by 1.32%. BMW and Continental saw relatively modest gains of 0.90% and 0.45% respectively.

It was also a bullish day for the banks. Deutsche Bank rallied by 3.59%, with Commerzbank gaining by 0.92%.

From the CAC, it was a mixed day for the banks. BNP Paribas fell by 0.12%, while Credit Agricole and Soc Gen ended the day with gains of 0.87% and 0.57% respectively.

The French auto sector saw further losses. Stellantis NV and Renault fell by 1.04% and by 1.60% respectively.

Air France-KLM and Airbus SE ended the day down by 6.13% and by 4.87% respectively.

On the VIX Index

A run of 3 consecutive days in the green came to an end for the VIX on Friday. Reversing a 7.12% rise from Thursday, the VIX slid by 13.69% to end the day at 24.66.

The NASDAQ rose by 1.55%, with the Dow and S&P500 gaining by 1.85% and by 1.95% respectively.

VIX 08321 Daily Chart

The Day Ahead

It’s quieter day ahead on the European economic calendar. German industrial production figures for January are due out later this morning.

With little else for the markets to consider, we can expect the numbers to influence going into the European session.

From the U.S, there are no material stats to provide direction, leaving the majors in the hands of FOMC member chatter and chatter from Capitol Hill.

Ahead of the European open, any updates from China’s National People’s Congress will need considering.

Trade data from China will also set the tone.

In February, China’s U.S Dollar trade surplus widened from $78.17bn to $103.25bn. Economists had forecast a narrowing to $60.00bn.

Year-on-year, exports jumped by 60.6%, following an 18.1% increase in January. Economists had forecast a 38.9% surge.

Imports rose by 22.2%, following a 6.5% increase in January. Economists had forecast a 15.0% jump.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 101 points with the DAX up by 133 points.

For a look at all of today’s economic events, check out our economic calendar.

A Quiet Economic Calendar Leaves Stats from Germany and the EUR in Focus

Earlier in the Day:

It’s was a particularly quiet start to the week on the economic calendar this morning. There were no material stats to provide the majors with direction through the Asian session.

The lack of stats will leave the majors in the hands of chatter from the National People’s Congress that got underway last Friday.

From the weekend, trade data from China set the tone, however.

In February, China’s U.S Dollar trade surplus widened from $78.17bn to $103.25bn. Economists had forecast a narrowing to $60.00bn.

Year-on-year, exports jumped by 60.6%, following an 18.1% increase in January. Economists had forecast a 38.9% surge.

Imports rose by 22.2%, following a 6.5% increase in January. Economists had forecast a 15.0% jump.

For the Majors

At the time of writing, the Aussie Dollar was up by 0.26% to  $0.7706, with the Kiwi Dollar up by 0.21% to $0.7182. The Japanese Yen was down by 0.05% to ¥108.36 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. German industrial production figures for January are due out later this morning.

Forecasts are EUR positive, though only marginally. A fall in factory orders in December suggests some uncertainty ahead of the release.

While we can expect sensitivity to the numbers, however, recent manufacturing PMIs should limit the impact of any weak numbers.

At the time of writing, the EUR was up by 0.08% to $1.1925.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was up by 0.06% to $1.3849.

Across the Pond

It’s also a particularly quiet day ahead on the economic calendar. A lack of stats will leave the Dollar in the hands of FOMC member chatter and news from Capitol Hill.

At the time of writing, the Dollar Spot Index was down by 0.05% to 91.934.

For the Loonie

There are no material stats to provide the Loonie with direction. The lack of stats will leave the Loonie in the hands of China trade data from Sunday and chatter from the National People’s Congress.

At the time of writing, the Loonie was up by 0.17% to C$1.2637 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

The Week Ahead – Economic Data, Monetary Policy, and China in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 42 stats in focus in the week ending 12th March. In the week prior, 70 stats had been in focus.

For the Dollar:

It’s a quieter week ahead.

February inflation figures are due out on Wednesday and Friday along with consumer sentiment figures on Friday.

JOLT’s job openings and weekly jobless claims figures will also draw attention on Thursday, however.

With market sensitivity to inflation heightened in recent weeks, expect plenty of influence from the numbers.

The Dollar Spot Index ended the week up by 1.22% to 91.985.

For the EUR:

It’s a busier week ahead on the economic data front.

German industrial production figures are due out on Monday ahead of finalized 4th quarter GDP numbers for the Eurozone on Tuesday.

Barring another revision, the GDP figures, expect Germany’s industrial production figures to have the greater impact.

On Tuesday, German trade data will also draw attention, with the markets focused on demand.

In the 2nd half of the week, industrial production figures for the Eurozone are due out.

Finalized inflation figures for Germany and Spain are also due out but will likely have a limited impact.

On the monetary policy front, the ECB monetary policy decision and press conference on Thursday will be the main event.

With market jitters over a possible shift in policy stemming from reinflation, expect the press conference to be key. Lagarde will need to assure the markets that there will be no shift in policy.

The EUR ended the week down by 1.33% to $1.1915.

For the Pound:

It’s another relatively quiet week ahead on the economic calendar.

In the first half of the week, retail sales figures for February are due out on Tuesday. With little else for the markets to consider, the BRC numbers will influence.

The markets will then need to wait for GDP, manufacturing and industrial production figures on Friday for more direction.

Trade data is also due out but will likely have a muted impact on the Pound.

The Pound ended the week down by 0.66% to $1.3841.

For the Loonie:

It’s a quieter week ahead on the economic calendar.

February employment figures and January wholesale sales figures are due out on Friday.

Employment change figures for February will be the key driver on the day.

On the monetary policy front, the Bank of Canada is also in action on Wednesday.

With the markets expecting the BoC to stand pat, the BoC press conference will be the main area of focus. Once more, inflation will likely be a hot topic…

The Loonie ended the week down by 0.62% to C$1.2659 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quiet week.

Business and consumer confidence figures for February and March are due out on Tuesday and Wednesday.

While business investment is also key to an economic recovery, expect consumer sentiment figures to have the greatest impact.

The Aussie Dollar ended the week down by 0.26% to $0.7686.

For the Kiwi Dollar:

It’s another quiet week ahead.

Electronic card retail sales figures are due out on Wednesday ahead of Business PMI numbers on Friday.

With little else for the markets to consider, both data sets will influence.

The Kiwi Dollar ended the week down by 0.91% to $0.7167.

For the Japanese Yen:

It is another quiet week ahead.

2nd estimate GDP numbers for the 4th quarter are due out on Tuesday.

Barring a marked revision from 1st estimates, however, the stats should have a limited impact on market risk sentiment.

At the end of the week, BSI Large Manufacturing Conditions Index numbers for the 1st quarter will draw interest.

The markets will be looking for manufacturing conditions to have improved for the 1st quarter…

The Japanese Yen ended the week down by 1.63% to ¥108.31 against the U.S Dollar.

Out of China

It’s a busier week ahead. Over the weekend, trade data for February is due out and will set the tone.

Expect plenty of interest in the numbers following some disappointing private sector PMIs.

Weak figures and we could see concerns over the Chinese economic recovery begin to hit the markets.

On Wednesday, inflation figures for February will also draw attention.

With the National People’s Congress continuing from last Friday, chatter from the Chinese government will also influence market risk sentiment.

The Chinese Yuan ended the week down by 0.36% to CNY6.4970 against the U.S Dollar.

Geo-Politics

U.S Politics

Iran and the Middle East will remain a key area of focus, particularly following last week’s report on the Khashoggi murder.

For Joe Biden and the Democrats, this could prove to be the first test. A breakdown in U.S – Saudi relations would raise questions over stability in the region.

While the Iran nuclear agreement will be a main area of focus, U.S – China relations also remains a key focal point for the markets.

U.S Mortgage Rates Break Back Through to 3% as Treasury Yields Climb

Mortgage rates were on the rise for a 3rd consecutive week in the week ending 4th March. Following a 16-basis points jump from the week prior; 30-year fixed rates rose by a further 5 basis points to 3.02%.

Compared to this time last year, 30-year fixed rates were down by 27 basis points.

30-year fixed rates were also down by 192 basis points since November 2018’s last peak of 4.94%.

Notably, however, it was the first plus 3% week since July of last year.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar. ISM Manufacturing and Non-Manufacturing PMI and ADP nonfarm employment figures for February were in focus.

The stats were skewed to the negative in the week.

While the ISM Manufacturing PMI was on the rise in February, service sector growth slowed according to the ISM survey.

The all-important ISM Non-Manufacturing PMI fell from 58.7 to 55.3 in February.

ADP numbers also disappointed, with the ADP reporting a 117k increase in nonfarm payrolls. In January, the ADP had reported a 195k increase in nonfarm payrolls.

While the stats were mixed, a continued rise in U.S 10-year Treasury yields delivered the upside in 30-year fixed rates in the week.

Freddie Mac Rates

The weekly average rates for new mortgages as of 4th March were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 5 basis points to 3.02% in the week. This time last year, rates had stood at 3.29%. The average fee held steady at 0.6 points.
  • 15-year fixed rates remained unchanged at 2.34% in the week. Rates were down by 45 basis points from 2.79% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates slid by 26 basis point 2.73%. Rates were down by 45 points from 3.18% a year ago. The average fee rose from 0.1 points to 0.3 points.

According to Freddie Mac,

  • Since reaching a low in January, mortgage rates have risen by more than 30 basis points, weighing on purchase demand.
  • While purchase activity remains high, it has cooled off over the last few weeks.
    Currently, purchase activity is comparable to pre-pandemic levels.
  • The rise in mortgage rates over the next couple of months is likely to be more muted compared to the last few weeks.
  • Freddie Mac expects a strong spring sales season.

Mortgage Bankers’ Association Rates

For the week ending 26th February, the rates were:

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.08% to 3.23%. Points increased from 0.46 to 0.48 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.00% to 3.19%. Points fell from 0.33 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances rose from 3.23% to 3.33%. Points decreased from 0.43 to 0.41 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased by just 0.50% in the week ending 26th February. In the previous week, the index had fallen by 11.4%.

The Refinance Index increased by 0.10% and was just 7% higher than the same week a year ago. The index had fallen by 11.0% in the week prior.

In the week ending 26th February, the refinance share of mortgage activity decreased from 68.5% to 67.5%. in the previous week, the share had fallen from 69.3% to 68.5%.

According to the MBA,

  • 30-year fixed rates experienced its largest single-week increase in almost a year and the highest since Jul-2020.
  • The overall share of refinances declined for the 4th consecutive week.
  • Spring buying season is approaching for the housing market, as market expectations of strong growth and higher inflation drove mortgage rates northwards.

For the week ahead

It’s a relatively quiet first half of the week on the U.S economic calendar. Key stats include February inflation figures.

From the week prior, we would expect February’s nonfarm payrolls and continued uptrend in U.S Treasury yields to also influence.

From elsewhere, trade data from China and chatter from the National People’s Congress will also influence yields and mortgage rates.

The Crypto Daily – Movers and Shakers – March 7th, 2021

Bitcoin, BTC to USD, eked out a 0.07% gain on Saturday. Following on from a 0.91% gain on Friday, Bitcoin ended the day at $48,860.0.

A mixed start to the day saw Bitcoin rise to an early morning intraday high $49,238.0 before hitting reverse.

Falling short of the first major resistance level at $50,074, Bitcoin fell to an early afternoon intraday low $47,159.0.

Steering clear of the first major support level at $47,002, Bitcoin revisited $49,000 levels before easing back.

The near-term bullish trend remained intact in spite of latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $24,751 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a mixed day on Saturday.

Ethereum rallied by 8.05% to lead the way.

Binance Coin  (+0.48%), Chainlink (+1.10%), Litecoin (+1.38%), and Ripple’s XRP (+1.79%) also joined Bitcoin in the green.

It was a bearish day for the rest of the majors, however.

Bitcoin Cash SV (-1.69%), Cardano’s ADA (-2.53%), Crypto.com Coin (-0.18%), and Polkadot (-0.81%) saw red on the day.

In the current week, the crypto total market fell to a Monday low $1,347bn before rising to a Wednesday high $1,600bn. At the time of writing, the total market cap stood at $1,505bn.

Bitcoin’s dominance rose to a Tuesday high 62.40% before falling to a Friday low 60.44%. At the time of writing, Bitcoin’s dominance stood at 60.93%.

This Morning

At the time of writing, Bitcoin was up by 0.72% to $49,213.0. A bullish start to the day saw Bitcoin rise from an early morning low $48,895.0 to a high $49,275.0.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a mixed start to the day.

Cardano’s ADA was down by 0.47% to buck the trend early on.

It was a bullish start for the rest of the majors, however.

At the time of writing, Crypto.com Coin was up by 4.22% to lead the way.

BTCUSD 070321 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid a fall through the pivot level at $48,419 to bring the first major resistance level at $49,679 into play.

Support from the broader market would be needed for Bitcoin to break back through to $49,500 levels.

Barring an extended crypto rally, the first major resistance level and resistance at $50,000 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $51,000 before any pullback. The second major resistance level sits at $50,498.

Failure to avoid a fall through the $48,419 pivot would bring the first major support level at $47,600 into play.

Barring an extended sell-off on the day, Bitcoin should steer clear of the 23.6% FIB of $45,50. The second major support level at $46,340 should limit the downside.

The Crypto Daily – Movers and Shakers – March 6th, 2021

Bitcoin, BTC to USD, rose by 0.91% on Friday. Partially reversing a 4.01% slide from Thursday, Bitcoin ended the day at $48,830.0.

A bearish start to the day saw Bitcoin slide to an early morning intraday low $46,417.0 before making a move.

Bitcoin fell through the first major support level at $46,735 before striking a late intraday high $49,489.0.

Falling short of the first major resistance level at $50,909, Bitcoin fell back to $48,600 levels before wrapping up the day at $48,800 levels.

The near-term bullish trend remained intact in spite of latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $24,751 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a mixed day on Friday.

Ripple’s XRP and Polkadot slid by 5.27% and by 5.47% respectively to lead the way down.

Binance Coin  (-1.86%), Bitcoin Cash SV (-1.67%), Crypto.com Coin (-2.38%), Ethereum (-0.70%), and Litecoin (-0.16%)  also saw red.

It was a bullish day for the rest of the majors, however.

Cardano’s ADA rallied by 4.20% to lead the way, with Chainlink (+0.57%) also joining Bitcoin in the green.

In the current week, the crypto total market fell to a Monday low $1,347bn before rising to a Wednesday high $1,600bn. At the time of writing, the total market cap stood at $1,486bn.

Bitcoin’s dominance rose to a Tuesday high 62.40% before falling to a Thursday low 61.06%. At the time of writing, Bitcoin’s dominance stood at 61.45%.

This Morning

At the time of writing, Bitcoin was up by 0.45% to $49,048.0. A bullish start to the day saw Bitcoin rise from an early morning low $48,826.0 to a high $49,238.0.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a bullish start to the day.

At the time of writing, Crypto.com Coin was up by 2.16% to lead the way.

BTCUSD 060321 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid a fall through the pivot level at $48,245 to bring the first major resistance level at $50,074 into play.

Support from the broader market would be needed for Bitcoin to break back through to $50,000 levels.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $52,000 before any pullback. The second major resistance level sits at $51,317.

Failure to avoid a fall through the $48,245 pivot would bring the first major support level at $47,002 into play.

Barring an extended sell-off on the day, Bitcoin should steer clear of the 23.6% FIB of $45,501 and the second major support level at $45,173.

The Weekly Wrap – Rising Yields and A Dollar Resurgence Was the Story of the Week

The Stats

It was a busier week on the economic calendar, in the week ending 5th March.

A total of 70 stats were monitored, following 52 stats from the week prior.

Of the 70 stats, 40 came in ahead forecasts, with 25 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 37 of the stats reflected an upward trend from previous figures. Of the remaining 33 stats, 28 reflected a deterioration from previous.

For the Greenback, it was a 2nd consecutive week in the green, in the week ending 5th March. The Dollar Spot Index rallied by 1.22% to end the week at 91.985. In the previous week, the Dollar had risen by 0.57% to 90.879.

FED Chair Powell’s speech from Thursday delivered 91 levels for the Dollar.

Out of the U.S

It was another relatively busy week on the economic data front.

In the first half of the week, private sector PMI figures were in focus along with ADP nonfarm employment numbers.

It was a mixed set of stats for the markets.

While manufacturing sector activity picked up in February, service sector growth hit a speed bump.

In February, the ISM Manufacturing PMI rose from 52.6 to 54.4. The Non-Manufacturing PMI, however, fell from 58.7 to 55.3.

The ADP numbers were not much better. In February, nonfarm employment rose by 117k in February, according to the ADP. Economists had forecast a 177k rise.

On Thursday, the market attention shifted to the weekly jobless claims figures ahead of the government labor market numbers on Friday.

In the week ending 26th February, initial jobless claims increased from 736k to 745k.

At the end of the week, nonfarm payrolls impressed, however, with a 379K jump in February. The better-than-expected rise took the unemployment rate down from 6.3% to 6.2%.

In January, nonfarm payrolls had risen by a more modest 166k.

On the monetary policy front, FED Chair Powell fueled a Dollar rally overnight on Thursday. Powell failed to address the issue of rising yields, which suggested a willingness to allow yields to rise further.

In the equity markets, the NASDAQ fell by 2.06%, while the Dow and S&P500 rose by 1.82% and by 0.81% respectively.

Out of the UK

It was another relatively quiet week on the economic data front.

Finalized private sector PMI figures for February were in focus along with the Tories annual budget release.

It was a mixed set of numbers for the Pound.

An upward revision to the manufacturing PMI was offset by a downward revision to the services PMI.

Late in the week, construction PMI figures for February had a muted impact on the Pound.

In February, the construction sector joined the manufacturing sector in expansion, with the PMI rising from 49.2 to 53.3.

From the UK government, the annual budget failed to move the dial.

In the week, the Pound fell by 0.66% to end the week at $1.3841. In the week prior, the Pound had fallen by 0.59% to $1.3933.

The FTSE100 ended the week up by 2.27%, reversing a 2.12% slide from the previous week.

Out of the Eurozone

It was a particularly busy week on the economic data front, with private sector PMI figures in focus.

While the manufacturing sector continued to deliver, service sector woes left the Eurozone Composite at 48.8 in February. A continued contraction highlighted some uncertainty towards the economic recovery.

Other stats included German and Eurozone inflation, retail sales and unemployment figures.

The stats were skewed to the negative, however, with a retail sales slump in January worse than expected.

At the end of the week, the German economy was back in focus. Factory orders rose by a larger than anticipated 1.4% and were up by 3.7% when compared with Feb-2020.

For the week, the EUR slid by 1.33% to $1.1915. In the week prior, the EUR had fallen by 0.36% to $1.2075.

For the European major indexes, it was bullish week. The CAC40 rose by 1.39%, with the DAX30 and EuroStoxx600 gaining 0.97% and 0.88% respectively. A bearish end to the week left the majors with relatively modest gains.

For the Loonie

It was a busy week.

4th quarter GDP figures were in focus in the 1st half of the week.

The figures revealed a slowdown in growth from the 3rd quarter, aligned with economies elsewhere.

Quarter-on-quarter, the economy grew by 2.3%, while contacting by 3.23% year-on-year.

In December, the economy expanded by a modest 0.1%, slowing from 0.8% growth in November.

At the end of the week, the focus shifted to January trade data and February’s Ivey PMI

In January, the trade balance jumped from a C$1.98bn deficit to a C$1.41bn surplus. A more marked increase in exports led to the return to a trade surplus mid-way through the quarter.

For February, the Ivey PMI was also Loonie positive, jumping from 48.4 to 60.0. While an impressive figure, the market impact was limited as a result of market concerns over yields.

In the week ending 5th March, the Loonie fell by 0.62% to C$1.2659. In the week prior, the Loonie had fallen by 0.57% to C$1.2738.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 5th March, the Aussie Dollar fell by 0.26% to $0.7686, with the Kiwi Dollar ending the week down by 0.91% to $0.7167.

For the Aussie Dollar

It was a busy week.

Early in the week, manufacturing and company gross operating profit figures were in focus.

It was a mixed bag, with manufacturing sector activity improving in February.

4th quarter profits were dire, however, sliding by 6.6% in the 4th quarter. In the 3rd quarter, company gross operating profits had risen by 3.2%.

In the 2nd half of the week, GDP, retail sales, and trade data were in focus.

The stats were skewed to the positive. The economy contracted by less than had been anticipated, with the trade surplus widening off the back of a marked pickup in exports.

Retail sales figures came up short of prelim numbers but still recovered from December’s 4.1% slide.

On the monetary policy front, the RBA was also in action but stood pat following the previous month’s surprise move.

For the Kiwi Dollar

It was a particularly quiet week.

Economic data was limited to building consent figures that had a muted impact on the Kiwi Dollar

For the Japanese Yen

It was a relatively busy week.

Finalized private sector PMIs for February and 4th quarter capital spending figures were in focus.

The stats were skewed to the positive in the week, though not enough to prevent a Yen slide to ¥108 levels.

In February, the manufacturing sector returned to expansion, with the PMI rising from 49.8 to 51.4.

The services sector continued to contract, however, with the PMI rising from 46.1 to 46.3.

Capital expenditure saw further decline in the 4th quarter, though to a lesser extent than in the previous quarter. Year-on-year, capital expenditure was down by 4.8%. In the 3rd quarter, CAPEX had been down by 10.6%.

The Japanese Yen slid by 1.63% to ¥108.31 against the U.S Dollar. In the week prior, the Yen had fallen by 1.06% to ¥106.57.

Out of China

It was a busier week on the data front, with private sector PMI figures for February in focus.

The stats were skewed to the negative, with growth across the private sector slowing moderately mid-way through the quarter.

In February, the market’s favored Caixin manufacturing PMI fell from 51.5 to 50.9, with the services PMI falling from 52.0 to 51.5.

As a result, the composite PMI slipped from 52.2 to 51.7.

Common themes across the PMI numbers from China and beyond were rising prices but also marked increases in optimism.

In the week ending 5th March, the Chinese Yuan fell by 0.36% to CNY6.4970. In the week prior, the Yuan had fallen by 0.25% to CNY6.4737.

The CSI300 fell by 1.39%, while the Hang Seng rose by 0.41%.

European Equities: A Week in Review – 05/03/21

The Majors

After a bearish final week of the month in February, it was a bullish start to the month in March.

The CAC40 rallied by 1.39%, with the DAX30 and the EuroStoxx600 seeing gains of 0.97% and 0.88% respectively.

Through the early part of the week, better than expected manufacturing PMI figures provided the majors with support.

An easing in U.S Treasury yields from the previous week’s spike, however, was the main driver early in the week.

Later in the week, a combination of weak economic data and pickup in yields saw the majors give up some of their earlier gains.

The Stats

It was a busy week on the economic data front, with February private sector PMIs in focus.

Manufacturing PMI numbers impressed, while the services sector continued to struggle as a result of extended containment measures.

Weighed by service sector woes, the Eurozone’s composite PMI rose modestly from 47.8 to 48.8. The overall picture continued to paint a gloomy picture and reflected the downside risks to the Eurozone economy.

Other stats in the week included German and Eurozone retail sales and unemployment figures and German factory orders.

Retail sales figures were particularly disappointing, while both Germany and the Eurozone’s unemployment rates held steady in January.

At the end of the week, factory orders from Germany impressed, rising by a larger than anticipated 1.4%. More significantly, orders were up by 3.7% when compared with Feb-2020, the month prior to the pandemic.

From the U.S

ISM private sector PMI figures for February also delivered mixed results, For the U.S, manufacturing sector activity picked up, while service sector growth slowed.

The all-important ISM Non-Manufacturing PMI fell from 58.7 to 55.3 in February.

Labor market figures ahead of Friday’s nonfarm payrolls also disappointed.

According to the ADP, nonfarm employment increased by just 117k in February, following a 195k increase in January.

Weekly jobless claims were on the rise in the final week of February, with initial jobless claims increasing from 736k to 745k.

At the end of the week, the government’s official labor market numbers wrapped things up.

Nonfarm payrolls impressed, with a 379K jump in February. The better-than-expected rise took the unemployment rate down from 6.3% to 6.2%.

In January, nonfarm payrolls had risen by a more modest 166k.

On the monetary policy front, FED Chair Powell failed to assure the markets of action to stem the rise in yields on Thursday.

A spike in the Dollar and a sell-off in the U.S equity markets had spilled into the European markets on Friday.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Volkswagen surged by 13.27%, with BMW and Daimler rallying by 6.18% and by 6.52% respectively. Continental ended the week up by a more modest 3.53%.

It was also a bullish week for the banking sector. Deutsche Bank rallied by 4.40%, with Commerzbank gaining 1.47%.

From the CAC, it was yet another particularly bullish week for the banks. Credit Agricole rallied by 5.25%, with BNP Paribas and Soc Gen gaining 4.69% and 3.90% respectively.

It was a relatively bullish week for the French auto sector. Renault and Stellantis NV ended the week up by 1.91% and by 3.85% respectively.

Air France-KLM slid by 7.17%, with Airbus ending the week down by 0.51%.

On the VIX Index

It was back into the red for the VIX  in the week ending 5th March. Partially reversing a 26.76% jump from the previous week, the VIX fell by 11.77% to end the week at 24.66.

The VIX had been on track for a 3rd consecutive weekly gain before a Friday rebound from early losses across the U.S equity markets.

For the week, the NASDAQ fell by 2.06%, while the Dow and the S&P500 rose by 1.82% and by 0.81% respectively.

VIX 06321 Weekly Chart

The Week Ahead

It’s a relatively busy week ahead on the economic calendar.

From Germany, industrial production and trade figures for January are due out on Monday and Tuesday.

Expect the industrial production figures to have the greatest impact on the majors.

On Tuesday, finalized 4th quarter GDP numbers for the Eurozone will also draw interest ahead of Eurozone industrial production figures on Friday.

On the inflation front, finalized inflation figures from Germany and Spain are due out at the end of the week. Barring marked upward revisions, however, these should have a muted impact on the majors.

While the stats will provide direction, it will be the ECB press conference on Thursday, however, that will be the main event.

With the markets expecting the ECB to stand past on policy, Lagarde’s view on inflation, yields and the impact on the economy and monetary policy will be key.

From the U.S, the economic calendar is on the lighter side.

On Wednesday, February inflation figures will draw interest ahead of the weekly jobless claim figures on Thursday.

At the end of the week, prelim March consumer sentiment figures will also influence late in the European session.

Following FED Chair Powell’s comments from last week, FOMC member chatter in the week ahead will also need monitoring.

Stocks Retreat Despite Strong Non Farm Payrolls Report

Treasury Yields Continue To Move Higher After Powell Fails To Calm Markets

Yesterday, S&P 500 found itself under pressure while Treasury yields moved higher after Fed Chair Jerome Powell did not signal that the Fed would do anything specific about the recent sell-off in the bond market.

Powell stated that the Fed was monitoring the current situation and that it had tools to support markets if necessary. However, investors clearly wanted to hear more about potential measures to stop the upside trend in Treasury yields.

Meanwhile, rising yields provided additional support to the U.S. dollar which rallied against a broad basket of currencies. Not surprisingly, precious metals were under pressure in such environment. Currently, gold is trying to settle below the $1700 level. If this attempt is successful, shares of gold miners will have a challenging start of today’s trading session.

Oil Tries To Settle Above The $65 Level As OPEC+ Maintains Current Production Cuts

OPEC+ surprised the market as it decided to maintain current production cuts, including Saudi Arabia’s voluntary cut of 1 million barrels per day (bpd). Other OPEC+ members will also keep current production cuts in place although Russia was allowed to increase its production due to seasonal needs.

Most analysts expected that at least 1 million bpd will return to the market in April so OPEC+ decision was not priced in by the market. As a result, WTI oil rallied and is currently trying to settle above the psychologically important $65 level.

I’d note that the recent EIA Weekly Petroleum Status Report indicated that U.S. domestic oil production did not fully recover after the recent blow dealt by cold weather so the current market situation remains bullish.

Unemployment Rate Declines To 6.2%

The U.S. has just provided Non Farm Payrolls and Unemployment Rate reports for February.

Non Farm Payrolls report indicated that the U.S. economy added 379,000 jobs in February compared to analyst consensus of 182,000. Meanwhile, Unemployment Rate declined from 6.3% to 6.2% while analysts expected that it would remain unchanged at 6.3%.

Interestingly, S&P 500 futures are losing ground after the release of the better-than-expected employment reports. Perhaps, the market is worried that the economy will get overheated after the new round of stimulus.

For a look at all of today’s economic events, check out our economic calendar.

Having a Trading Plan is More Important than Just Focusing on NFP Report

Enough with the focusing already. What’s your game plan for trading the U.S. Non-Farm Payrolls report? The focus began when you first saw the report on the economic calendar. Now that you’ve seen the price action this week and saw the reaction to Federal Reserve Chairman Jerome Powell’s lack of concern about a recent sell-off in bonds while sticking to his stance to keep interest rates low for a long time. How do you think traders will react to the headline number if it comes in bullish or bearish?

First of all, no one really knows what a bullish or bearish number will look like, given the massive amount of nonfarm payrolls estimates. If you look on to the Dow Jones number you may have a different interpretation than the guy trading the Bloomberg number or the Reuters number or the Wall Street Journal figure? Shall I go on?

From experience, it’s not knowing about the accuracy of “number” that brings success but how to trade it. Who to follow? How financial markets – bonds, stocks currencies, the dollar, gold – will be affected.

In my opinion, it all starts with the reaction to the number by Treasury traders. They are the smartest traders in the world and they control a lot of money. So latch on to the Treasury futures contract. Do not try to trade the headline number. You’ll get whip-sawed.

Follow the yields. They are what got us here in the first place. While the small time players are being told by the brokers to “focus” on the NFP number, the professionals know that this one report will not recover the 10 million jobs lost during the pandemic.

Do the math? How long will it take the economy to recovery 10 million jobs at a pace of 200,000 jobs per month?  Exactly. This tells me this report could be a dud with professionals already preparing for the Fed’s March 17 announcements.

So when you do the math, you see that the report is not that important after all. Furthermore, it’s being called Joe Biden’s first jobs report. That’s true so we don’t even have a trend yet in the labor market.

However, I do have to add that if the number comes in below last month’s 49,000 or negative then those betting on a fast recovery and high inflation will have a hard time building a case for higher Treasury yields or even a faster exit from monetary policy by the Federal Reserve.

NFP Trading Tips

Don’t trade off of the headline jobs number. Use the June 10-year Treasury note futures contract for guidance. There are just too many Non-Farm guesses out there. You won’t be able to tell if it’s bullish or bearish. You also may want the T-notes to settle before making your move. Sometimes there is a reaction to the headline number and a different reaction to the unemployment rate. This causes whipsaw price action. Don’t force a trade either. Sometimes there is little reaction to this report.

If T-notes are moving lower, rates are rising. This tends to be bearish for stocks bonds and gold.  If T-notes are moving higher, rates are falling. This tends to be bullish for stocks, bonds and currencies.

With all these correlations going on, make sure you don’t double or triple up in the same direction. You’ll lose it twice or three times as fast if the market turns suddenly. Also make sure that you don’t end up at some point with a bullish gold and bullish dollar position at the same time. That could confuse you.

If you stick to following the Treasury futures and understand their relationships with the other markets at this time then you should be alright. Remember, don’t waste your time focusing on the report, focus on the direction of yields.

For a look at all of today’s economic events, check out our economic calendar.

German Factory Orders Rise But Fail to Impress the EUR

After a particularly quiet economic calendar through the Asian session, German factory orders were in focus.

Manufacturing data from Germany has been upbeat at the turn of the year. Factory orders for January needed to be aligned with the survey-based data.

Factory Orders

In January, factory orders increased by 1.4%, coming in ahead of a forecasted 0.7% increase. In December, orders had fallen by 1.9%.

According to Destatis,

  • Compared with January 2020, new orders were up 2.5% and up by 3.7% when compared with February 2020.
  • Domestic orders slid by 2.6%, while foreign orders increased by 4.2%, month-on-month.
  • New orders from the euro area rose 3.9%, with new orders from other countries jumping by 4.4%.
  • Manufacturers of intermediate goods saw new orders increase by 0.2%, with new orders of capital goods up 3.3%.
  • Consumer goods manufacturers, however, reported a 5.8% slide in new orders.

Market Impact

Ahead of today’s stats, it was a mixed start for the EUR. Early in the day, the EUR had struck a current day high $1.19771 before falling to a pre-stat low $1.19516.

In response to the stats, however, the EUR slid from $1.19537 to a current day low $1.19482.

At the time of writing, the EUR was down by 0.10% to $1.19514.

EURUSD 050321 Minute Chart

Next Up

U.S nonfarm payrolls and February’s unemployment rate.

Wage growth and trade data are also due out of the U.S but should have a muted impact on the Dollar and the broader markets.

US Stocks Edge Lower Ahead of Jobs Report after Surging Bond Yields Fuel Steep Sell-Off

U.S. stock index futures are trading lower overnight following a steep decline in the tech-sector that dragged all the major cash indexes lower on Thursday. The catalyst behind the early selling pressure is fear of a surge in bond yields. The trading range is tight and volume is relatively low ahead of the release of a U.S. Non-Farm Payrolls report at 13:30 GMT. Economists predict the report will show the economy added 210,000 jobs in February, compared to just 49,000 in January, according to Dow Jones.

In addition to the headline figure, traders will get the opportunity to react to Average Hourly Earnings that are expected to come in unchanged at 0.2%. The Unemployment Rate is also expected to remain unchanged at 6.3%.

The U.S. Trade Balance deficit is expected to have increased to 67.5 billion from -66.6 billion. Consumer Credit is also expected to have risen to 11.8 billion from 9.7 billion.

Thursday Recap

Wall Street’s major stock indexes ended sharply lower on Thursday, leaving the NASDAQ Composite down around 10% from its February record high, after remarks from Federal Reserve Chair Jerome Powell disappointed investors worried about rising longer-term U.S. bond yields.

In the cash market on Thursday, the benchmark S&P 500 Index settled at 3768.47, down 51.25 or -1.34%. The blue chip Dow Jones Industrial Average finished at 30924.14, down 345.95 or -1.11% and the technology driven NASDAQ Composite closed at 12723.47, down 274.28 or -2.11%.

The NASDAQ Composite wiped out all of its year-to-date gains and was down about 10% from its record closing high on February 12.

Apple Inc, Tesla Inc and PayPal Holdings Inc were among the largest drags on the S&P 500. Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when bond returns go up.

Fed Chair Powell’s Comments Light the Match

U.S. stocks fell sharply on Thursday after remarks from Federal Reserve Chair Jerome Powell disappointed investors worried about rising longer-term U.S. bond yields.

Powell said the recent run-up caught his attention but he didn’t give any indication of how the central bank would rein it in. Some investors had expected the Fed chair to signal his willingness to adjust the Fed’s asset purchase program in an effort to help push down long-term interest rates.

The economic reopening could “create some upward pressure on prices,” Powell said in a Wall Street Journal webinar Thursday. Even if the economy sees “transitory increases in inflation…I expect that we will be patient,” he added.

Bond Spike Weighs on Technology Sector

The benchmark 10-year Treasury yield spiked to 1.533% after Powell’s comments, which did not point to changes in the Fed’s asset purchases to tackle the recent jump in yields. It still held below last week’s one-year high of 1.614%.

Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when bond returns go up.

“Valuations are at the high end of historic ranges, so you are seeing selling, especially in the higher valuation areas like the NASDAQ and tech in general,” said Tim Ghriskey, chief investment strategist at Iverness Counsel in New York.

For a look at all of today’s economic events, check out our economic calendar.

The Crypto Daily – Movers and Shakers – March 5th, 2021

Bitcoin, BTC to USD, slid by 4.01% on Thursday. Reversing a 3.91% gain from Wednesday, Bitcoin ended the day at $48,388.0.

A mixed start to the day saw Bitcoin rise to an early morning intraday high $51,777.0 before hitting reverse.

Falling short of the first major resistance level at $52,649, Bitcoin slid to a late intraday low $47,603.0.

The sell-off saw Bitcoin fall through the first major support level at $48,175 before ending the day at $48,300 levels.

The near-term bullish trend remained intact in spite of latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $24,751 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a mixed day on Thursday.

Ripple’s XRP rallied by 7.33% to buck the trend on the day.

It was a bearish day for the rest of the majors, however.

Cardano’s ADA and Chainlink slid by 8.31% and by 7.37% respectively to lead the way down.

Binance Coin  (-4.59%), Bitcoin Cash SV (-5.76%), and Litecoin (-3.75%) also saw relatively heavy losses.

Crypto.com Coin (-1.81%), Ethereum (-1.83%), and Polkadot (-1.04%) saw relatively modest losses on the day, however.

In the current week, the crypto total market fell to a Monday low $1,347bn before rising to a Wednesday high $1,600bn. At the time of writing, the total market cap stood at $1,422bn.

Bitcoin’s dominance fell to a Tuesday low 61.08% before rising to a Tuesday high 62.40%. At the time of writing, Bitcoin’s dominance stood at 61.50%.

This Morning

At the time of writing, Bitcoin was down by 2.54% to $47,161.0. A bearish start to the day saw Bitcoin slide from an early morning high $48,389.0 to a low $47,055.0.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was also a bearish start to the day for the majors

At the time of writing, Crypto.com Coin was down by 4.97% to lead the way down.

BTCUSD 050321 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to move through the pivot level at $49,256 to bring the first major resistance level at $50,909 into play.

Support from the broader market would be needed for Bitcoin to break back through to $50,000 levels.

Barring an extended crypto rally, the first major resistance level and Thursday’s high $51,777.0 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $55,000 before any pullback. The second major resistance level sits at $53,430.

Failure to move through the $49,256 pivot would bring the first major support level at $46,735 into play.

Barring an extended sell-off on the day, Bitcoin should steer clear of the 23.6% FIB of $45,501 and the second major support level at $45,082.

European Equities: German Factory Orders and U.S Nonfarm Payrolls in Focus

Economic Calendar:

Friday, 5th March

German Factory Orders (MoM) (Jan)

The Majors

It was a mixed day for the European majors on Thursday.

Mixed economic data from the Eurozone and the U.S provided little support for the European boerses.

The lingering fear of the impact of reinflation on monetary policy continued to weigh on the majors late in the week.

On Thursday, the DAX30 the EuroStoxx600 fell by 0.17% and by 0.38% respectively, while the CAC40 rose by 0.01%.

The European majors came under further pressure as the markets responded to a pickup in U.S Treasury yields on the day.

The Stats

It was a relatively busy day on the economic calendar on Thursday.  Key stats from the Eurozone included Eurozone retail sales figures along with January’s unemployment rate.

Retail sales slid by 5.9% in January, reversing a downwardly revised 1.8% increased from December. Economists had forecast a more modest 1.1% fall.

Year-on-year, retail sales fell by 6.4% across the Eurozone in January, which was worse than a forecasted 1.2% decline. In December, retail sales had risen by an upwardly revised 0.9%.

According to Eurostat,

  • Month-on-month, non-food product sales slid by 12.0%, with automotive fuel sales by 1.1%.
  • There was a 1.1% increase in the sales of food, drinks, and tobacco.
  • By member state, Austria (-16.6%), Ireland (-15.7%), and Slovakia (-11.1%) registered the largest falls.
  • Estonia registered the largest increase, rising by a relatively modest 1.7%.

While retail sales figures disappointed, the Eurozone’s unemployment rate held steady at 8.1% in January. December’s unemployment rate was revised down from 8.3% to 8.1%.

According to Eurostat,

  • While stable at 8.1%, this was up from January 2020’s 7.4%.

Ahead of today’s key stats, construction PMI figures from Germany failed to impress. In February, the IHS Markit Construction PMI slid from 46.6 to 41.0.

From the U.S

Weekly jobless claim figures were in focus along with January factory orders late in the European session.

In the week ending 26th February, initial jobless claims increased from 736k to 745k. Economists had forecast a rise to 750k.

Factory orders were positive for riskier assets. In January, factory orders increased by 2.6%, following a 1.6% rise in December. Economists had forecast a 2.1% increase.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen rallied by 2.02%, with Continental and Daimler rising by 0.16% and by 1.15% respectively. BMW bucked the trend, however, falling by 0.32%.

It was a bearish day for the banks. Deutsche Bank slid by 3.16%, with Commerzbank falling by 1.34%.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 0.14%, with Credit Agricole and Soc Gen seeing heavier losses of 1.30% and 1.23% respectively.

The French auto sector also struggled. Stellantis NV and Renault fell by 0.25% and by 0.50% respectively.

Air France-KLM and Airbus SE ended the day down by 1.08% and by 0.16% respectively.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Thursday. Following a 10.66% gain on Wednesday, the VIX rose by 7.12% to end the day at 28.57.

The NASDAQ slid by 2.11%, with the Dow and S&P500 falling by 1.11% and by 1.34% respectively.

VIX 05321 Daily Chart

The Day Ahead

It’s quieter day ahead on the European economic calendar. German factory order numbers for January are due out later this morning.

Expect any heavy fall in orders to raise questions over the recent uptrend in German survey-based figures.

Back in January, Germany’s Manufacturing PMI survey had reported a continued rise in new orders, albeit at a slower pace than in December.

From the U.S, nonfarm payrolls and February’s unemployment rate will also garner plenty of interest later in the day.

Ahead of the European open, China Premier Li Keqiang’s National People’s Congress speech will draw interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

For a look at all of today’s economic events, check out our economic calendar.

U.S Nonfarm Payrolls Puts the Dollar Back in Focus as China’s National People’s Congress Begins

Earlier in the Day:

It’s was a particularly quiet start to the day on the economic calendar this morning. There were no material stats to provide the majors with direction through the early part of the Asian session.

The lack of stats will leave the majors in the hands of China Premier’s Li Keqiang speech later this morning, as the National People’s Congress gets under way.

For the Majors

At the time of writing, the Aussie Dollar was down by 0.18% to  $0.7712, with the Kiwi Dollar down by 0.14% to $0.7180. The Japanese Yen was flat at ¥107.98 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. German factory orders for January are due out later this morning.

Forecasts are EUR positive. With manufacturing sector activity picking up at the turn of the year, an unexpected slide would pressure the EUR further.

At the time of writing, the EUR was down by 0.04% to $1.1964.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was down by 0.06% to $1.3886.

Across the Pond

It’s another busy day ahead on the economic calendar. Following the weekly jobless claims figures on Friday, labor market figures for February will be in focus later today.

February’s unemployment rate and nonfarm payrolls will be the key drivers late in the day.

Away from the economic calendar, chatter from Capitol Hill will also influence.

On Thursday, the Dollar Spot Index rallied by 0.75% to end the day at 91.631. FED Chair Powell’s speech from late Thursday delivered the upside on the day.

For the Loonie

It’s a relatively busy day ahead. January trade data and February’s Ivey PMI figures are due out later today.

With little else for the markets to consider in the past week, expect some Loonie sensitivity ahead of next week’s BoC monetary policy decision.

At the time of writing, the Loonie was down by 0.11% to C$1.2681 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Tumble, Gold Dumps , Dollar Jumps Amid Treasury Yield Spike as Powell Signals Inflation is Ahead

A wave of heavy selling pressure and heightened volatility hit the financial markets on Thursday after Federal Reserve Chairman Jerome Powell failed to reassure investors that central bank policymakers would keep surging bond yields and inflation expectations under control.

At 21:00 GMT, March E-mini S&P 500 Index futures were down 1.02%, June 10-year Treasury Notes were off by 0.42% and April Comex gold futures had lost 1.13%.

The major currencies were also lower as the March U.S. Dollar Index soared 0.76%.

Powell Reiterates Fed’s Stance

Powell said the economic reopening could “create some upward pressure on prices,” reiterating that the central bank would be “patient” before changing policy even as it saw inflation pick up in what it expects would be a transitory fashion.

The Fed chief did acknowledge the rapid rise in rates recently caught his attention, but said the Fed would need to see a broader increase across the rate spectrum before considering any action, he said during the Wall Street Journal Jobs Summit Thursday.

Powell said price increases above the Fed’s 2% target for a couple quarters or more would not cause consumers’ long-term inflation expectations to materially change.

“We want inflation expectations to be anchored at 2%,” Powell said. “Inflation is running below 2% and has done so since the pandemic arrived.”

Is the Fed Losing Control of Monetary Policy?

Powell and his policymakers have until March 17 to regain control of monetary policy or they could face a creditability issue with the financial markets that could lead to a surge in volatility.

“With long rates rising in response to his commentary, we are again seeing a market that is taking control of monetary policy from the Fed,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “The Fed has put themselves in a tough situation and the only way out is if inflation does not rise further and does not get to their 2% target. If it does, they have a problem because they will be afraid to confront it with higher rates if they remain so focused on employment.”

Still others see a positive outcome.

“There’s a growing worry that the economy may be running away from the Fed. While the thought of rapid change could be enough to scare investors now, we see higher inflation as a long-term positive for the market,” said Lindsey Bell, chief investment strategist for Ally Invest.

“We’re still seeing historically low levels of inflation, so it would take a lot of change for inflation to get out of control,” Bell added.

What a Difference a Year Makes …

Last year it was bad news was good for stocks and gold. This year, we’re back to good news is bad for those assets. Earlier today, the U.S. reported that weekly jobless claims were better than the forecast, a small sign of an improving labor market. However, with that kind of news, the market moved interest rates slightly higher on expectations of better economic growth. Traders reacted by dumping stocks.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Mixed After The Recent Pullback

Initial Jobless Claims Increase To 745,000

The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports.

The Initial Jobless Claims report indicated that 745,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 750,000. Meanwhile, Continuing Jobless Claims decreased from 4.42 million to 4.3 million, fully in line with the analyst consensus.

S&P 500 futures remain little changed after the release of employment reports as traders evaluate their next moves after the recent pullback.

All Eyes On OPEC+ Meeting

Today, OPEC+ members are meeting to discuss the current situation in the oil market and determine the size of production cuts for April.

Saudi Arabia is expected to end its voluntary production cut of 1 million barrels per day, but other moves remain a mystery. Recent reports indicated that OPEC+ may keep existing production cuts for the month of April as the situation on the coronavirus front remains challenging.

At the same time, some members like Russia may be pushing for increasing production as demand continues to rebound.

Currently, WTI oil is gaining ground and tries to settle above $62 as traders bet that OPEC+ will keep current production cuts in place. It should be noted that OPEC+ decisions are not always predictable so oil-related stocks may have a volatile trading session today.

Gold Made An Attempt To Settle Below The $1700 Level

Gold remains under pressure as traders focus on rising U.S. Treasury yields. Precious metals pay no interest so rising yields make them less attractive for investors.

Meanwhile, shares of most gold miners continue to trend lower which is not surprising given the current mood in the gold market.

If gold manages to settle below $1700, it will gain additional downside momentum and head towards the next support level at $1675 which will be bearish for gold miners’ shares. Meanwhile, traders will have to monitor the developments in the U.S. government bond market as the continuation of the current trend will put more pressure on precious metals.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Tumble on Resurgent Worries Over Rising US Bond Yields

The major Asia-Pacific stock indexes finish lower across the board on Thursday, led by a steep drop in technology shares, fueled by a similar move on Wall Street on Wednesday. The catalyst behind both moves was a rise in bond yields.

During the U.S. session, the 10-year Treasury yield ticked up to 1.47%, pressuring areas of the market with high valuations. It was still off last week’s peak of above 1.61% that roiled stock markets as investors bet on rising inflation.

Rising interest rates disproportionately hurt high-growth companies in both the U.S. and Asia because investors value them based on earnings expected years into the future, and high interest rates hurt the value of futures earnings more than the value of earnings made in the short-term.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 28930.11, down 628.99 or -2.13%. Hong Kong’s Hang Seng Index finished at 29236.79, down 643.63 or -2.15% and South Korea’s KOSPI Index closed at 3043.49, down 39.50 or -1.28%.

In China, the Shanghai Index settled at 3503.49, down 73.41 or -2.06% and in Australia, the S&P/ASX 200 Index finished at 6760.70, down 57.30 or -0.84%.

Global Selling Trips Australian Shares

Australian shares fell on Thursday as renewed worries about rising U.S. bond yields soured risk sentiment globally.

The S&P/ASX 200 Index was also weighed down by miners Rio Tinto and BHP Group and supermarket chain Woolworths Group as they traded ex-dividend.

Tech stocks fell 1.5%, tracking a sell-off in U.S. peers. Buy-now-pay-later firm Afterpay slid more than 2%, while Xero Ltd shed 3%.

In economic news, Australia’s January retail sales increased 0.5% month on month on a seasonally adjusted basis, according to data published Thursday by the Bureau of Statistics. That compared against expectations for a 0.6% increase in a Reuters poll.

The country also recorded a trade surplus of 10.142 billion Australian Dollars (about $7.88 billion), higher than expectations in a Reuters poll for a 6.5 billion Australian Dollar trade surplus.

Hong Kong Stocks End Lower on Material, Tech Firms

Hong Kong shares dropped on Thursday, weighed down by losses in material and tech stocks, as equities globally retreated on renewed doubts over monetary support after another rise in U.S. Treasury yields. The sub-index of the Hang Seng tracking tech shares dipped 5.8%, while the IT sector dropped 5.3%, and the material sector ended 6.4% lower.

Japan’s Nikkei Hits 1-Month Low as US Futures Slump

Japan’s Nikkei Index on Thursday dropped to its lowest in one month, as investors sold off heavyweights including SoftBank Group and Fast Retailing, tracking a slump in U.S. futures during the Asian trade.

SoftBank Group fell 5.19% in the wake of news that British supply chain finance firm Greensill Capital, which is backed by the Japanese conglomerate, was in talks to sell large parts of its business.

“There are uncertainties in the move of U.S. bond yields, which has made the market outlook unclear,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

For a look at all of today’s economic events, check out our economic calendar.