Economic Data from Germany Tests EUR Support Ahead of Inflation Figures

It was a relatively busy morning on the economic calendar, with economic data from Germany and the Eurozone in focus.

Consumer Spending

After a string of positive stats from Germany and the Eurozone in recent days, retail sales disappointed this morning.

Month-on-month, retail sales fell by 4.5% in January, following an upwardly revised 9.1% slide in December. Economists had forecast a more modest 0.3% decline.

According to Destatis,

  • Year-on-year, retail sales was down by 8.7% in January. In December, retail sales had risen by 2.8%.
  • Compared with Feb-2020, the month prior to the COVID-19 outbreak, turnover was 5.8% lower.

Unemployment

Unemployment figures from Germany were mixed, following the disappointing retail sales figures.

In February, unemployment rose by 9k, partially reversing a 37k fall in January. In spite of the rise, the unemployment rate held steady at 6.0%.

Economists had forecast a 13k fall in unemployment and for the unemployment rate to hold steady at 6.0%.

Market Impact

In response to the retail sales figures, the EUR slipped from 1.20224 to a low $1.19990 before steadying.

German unemployment figures added further downside pressure, leading the EUR back down from a post-retail-sales high $1.20163 to a current day low $1.19919 upon release of the figures.

At the time of writing, the EUR was down by 0.41% to $1.19984. Earlier in the day, the EUR had struck a pre-stat current day high $1.20504 before hitting reverse.

EURUSD 020321 Minute Chart

In spite of the disappointing numbers, the European boerses recovered from early losses.

At the time of writing, the DAX30 was up by 0.20%, with the CAC40 and EuroStoxx600 up by 0.15% and by 0.14% respectively.

Next Up

Prelim February inflation figures for the Eurozone…

iFX EXPO Live Event Announced For Dubai

The eagerly anticipated iFX EXPO will take place at the exclusive 5-star Grand Hyatt Hotel, Dubai from 19-20 May 2021 and is set to connect high-level executives in financial services and fintech from around the world. This will be a live event giving attendees the chance to get back to face-to-face networking in a well-organised and COVID-secure environment.

A History of Success

Heading to Dubai for the first time ever, the upcoming iFX EXPO follows 10+ years of successful global shows in Europe and Asia. Offering a bustling exhibition floor with top industry brands, high-profile speaker sessions from industry thought leaders and dazzling entertainment, it’s no wonder the events arranged by Ultimate Fintech have so far attracted 35,000+ global attendees and 1,500+ exhibitors.

Making it Happen – SAFELY

The pandemic caused much concern over the past year. But rest assured that the iFX EXPO in Dubai will follow all the health and safety guidelines set out by the local authorities allowing you to network with confidence. Measures in place to keep you safe include:

  • Wearing masks at all times
  • Maintaining a 2-metre social distancing guidelines
  • Disinfection protocols for all public areas
  • Sanitisers readily available at multiple locations
  • Real-time monitoring of crowd density
  • An increase in standard booth sizes
  • 2-way traffic along aisles
  • Socially distanced seating in the Speaker’s Hall
  • Sterilisation and sanitisation of the Exhibition Hall
  • Online registration to keep track of visitors
  • Thermal scanners at entry points

Speaking of the COVID-safe event, Ultimate Fintech’s COO Sarah Henry says:

“We’re dedicated to making this iFX EXPO happen safely. This will be the first live FX event in a year, and we’re excited to welcome back world leading industry experts. As reputable event organisers with an extensive track record, we have the professionalism and experience to make this happen.”

All rules are subject to change depending on local guidelines. For travel it’s important to look at the requirements for tourists arriving in Dubai as well as travel restrictions from your country of departure.

Why Dubai?

Dubai’s sustained rise as a global financial centre makes it the perfect setting for this year’s iFX EXPO. Consistently recognised as the leading financial centre in the Middle East, Africa and South Asia region, Dubai is an international finance centre with a vibrant business ecosystem of over 250,000 professionals working across more than 2,400 registered firms. The historical signing of the Abraham Accords between Israel and the UAE also put Dubai in the spotlight from a financial perspective and has resulted in an open market for Israeli companies.

With the UAE topping the Middle East rankings for the way it handled the pandemic, Dubai also has instant appeal from a safety perspective although it’s important to continue following all the COVID guidelines laid out by law.

The cherry on the cake is the wonderment of Dubai itself. Sprung from the desert, this fascinating part of the world is home to magnificent malls, head-turning sports cars, beautiful sand dunes and exquisite architecture. The Burj Al Arab is a sight to behold, as is the Burj Khalifah which is the tallest building in the world at an impressive 828-metres high. Attending the EXPO means hopefully squeezing in a spot of sightseeing.

Who Should Attend?

The iFX EXPO Dubai is tailored to those in the finance and fintech sector looking to increase their industry knowledge and connect with likeminded businesspeople. It’s ideal for thought leaders, decision makers and technology experts wishing to enhance their knowledge, discover innovative new business solutions and develop their network. It’s also a great chance to reconnect with colleagues, partners and friends from around the world.

What to Expect?

The two-day event will be packed with useful insights from thought leaders and reveal industry information that will help your business grow. The expo will welcome high-profile speakers from the FX, banking, fintech, payments and compliance sectors.

As a crossroad between East and West, iFX EXPO Dubai is set to connect top-level executives from the most prominent global firms, stemming various industry fields. The EXPO will allow you to explore all kinds of topics and form relevant collaborations.

Topics include:

  • Technology and Liquidity – everything from trading platforms, connectivity, CRM & marketing solutions to Voip and payment solutions.
  • Digital Assets and Blockchain – explore cryptocurrencies and security as well as blockchain payment solutions.
  • Retail and Institutional Brokers – FX brokers can compare and source service providers, engage with partners and expand with Institutional offerings.
  • Payments and Banks – this event is the go-to place to find payment processing, gateways, e-wallets and technology.
  • Affiliates and IBS – grow your network on the expo floor.
  • Regulation and Compliance – meet regulatory, audit, legal & compliance firms.

Due to safety requirements, places are limited and going fast for both exhibitors and attendees. Register today to save your spot at the most exclusive event in the online trading industry.

FBS Announces The Results Of Its 12 Years Promo First Tour And Launches The Second Tour

It is a trading tournament with three tours and the Grand Finale. Each tour ends with a raffle, where everyone can win amazing gifts like cars, money rewards, and Apple gadgets. The most luxurious prizes will be drawn in the Grand Finale – $300 000, Mercedes-Benz G-Class, three gold bars of 1 kg each, and many others. It is the biggest promo in FBS history with a total prize fund of $1 200 000.

FBS 12 Years promo is in full swing. The first tour is over, and the winners will be announced on March 4, at 12:00 MT. Watch the live stream on Facebook or YouTube to be the first one to know the results. This time the broker will be raffling off the following prizes – Audi Q3, Honda ADV 150, several MacBook Pro, some iPhone 12, $30 000, and many others.

The second tour is on its way. The registration is already open and will run until March 8. If you missed the first tour, take your chance now. Everyone will have a chance to win these incredible prizes:

  • $1 000, $2 000, $3 000
  • JBL Charge 4, Samsung S20, AirPods Pro, Apple Watch, iPhone 12 Pro, MacBook Pro
  • $10 000, $20 000, $30 000
  • Kawasaki Z250
  • BMW X3

The tournament terms remain the same. To win the prize you should:

  1. Join FBS 12 Years tournament.
  2. Trade at least one lot, invest $50, or invite a friend to get one lucky ticket.
  3. Collect as many lucky tickets as possible to increase your chances of winning.

The second tour will last from March 8 to April 2. The raffle is scheduled for April 8.

The promo works in FBS Personal Area (web and app), FBS CopyTrade, and FBS Trader. Don’t forget to update the apps to the latest versions. Participate everywhere to multiply your chances of winning with your reliable broker.


FBS is an international broker with over 150 countries of presence and more than 16 000 000 clients. It is famous for regular, diverse, and advantageous contests and promotions that are highly appreciated by the global trading community. Besides, the broker offers various special services to make trading more pleasant and beneficial, such as swap-free and VPS services, cashback up to $15 per lot, and more. An official trading partner of FC Barcelona from January 2020.

Economic Data from the Eurozone and the Canada Put the EUR and Loonie in Focus

Earlier in the Day:

It’s was another busy start to the day on the economic calendar this morning. The Aussie Dollar and the Japanese Yen were in action this morning, with RBA scheduled to deliver its policy decision later this morning.

For the Japanese Yen

In January, the Job to applications ratio increased from 1.06 to 1.10, coming in ahead of a forecasted 1.06. Unemployment figures also beast estimates, with the unemployment rate holding steady at 2.9%. Economists had forecast a pickup to 3.0%.

Capital Spending fell by 4.8%, year-on-year, in the 4th quarter. In the 3rd quarter, capital spending had fallen by 10.6%.

The Japanese Yen moved from ¥106.822 to ¥106.820 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.10% to ¥106.87 against the U.S Dollar.

For the Aussie Dollar

Building approval and current account figures were in focus this morning.

In January, building approvals tumbled by 19.4%, reversing a 12.0% jump in December. Economists had forecast 3% fall.

According to the ABS,

  • Private sector houses fell 12.2%, while private sector dwellings excluding houses tumbled 39.5%.

In the 4th quarter, the current account surplus widened from A$10.0bn to A$14.5bn. Economists had forecasted a widening to A$13.1bn.

The Aussie Dollar moved from $0.77712 to $0.77702 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.10% to $0.7764.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.01% to $0.7264.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. The German economy is back in the spotlight, with Eurozone inflation figures also in focus.

From Germany, retail sales figures for January and unemployment numbers for February will provide direction.

A recent pickup in consumer confidence will need to translate into a rise in spending and an improvement in employment figures.

Expect weak numbers to test support for the EUR.

Later in the day, prelim February inflation figures for the Eurozone are also due out. Market sensitivity has picked up, so expect any further pickup in inflationary pressures to influence.

At the time of writing, the EUR was down by 0.09% to $1.2038.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats from 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. In spite of last week’s pullback, downside risks for the Pound will likely remain limited near-term.

At the time of writing, the Pound was down by 0.01% to $1.3923.

Across the Pond

It’s also a quiet day ahead on the economic calendar. There are no material stats due out of the U.S to provide the markets with direction.

The lack of stats will leave the Dollar in the hands of chatter from Capitol hill and FOMC member commentary on the day.

Biden’s COVID-19 relief package has made its way to the Senate, so expect updates from talks ahead of a vote.

With the markets looking to get a sense on where the FED sits vis-à-vis inflation, FOMC member speeches will also begin to garner greater interest.

At the time of writing, the Dollar Spot Index was up by 0.04% to 91.075.

For the Loonie

It’s a busy day ahead. 4th quarter and December GDP numbers are due out later today.

With little else for the markets to consider, expect the numbers to influence.

At the time of writing, the Loonie was down by 0.02% to C$1.2649 against the U.S Dollar.

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

European Equities: Economic Data from Germany and Eurozone Inflation in Focus

Economic Calendar:

Tuesday, 2nd March

German Retail Sales (MoM) (Jan)

German Unemployment Change (Feb)

German Unemployment Rate (Feb)

Eurozone CPI (YoY) (Feb) Prelim

Wednesday, 3rd March

Spanish Services PMI (Feb)

Italian Services PMI (Feb)

French Services PMI (Feb) Final

German Services PMI (Feb) Final

Eurozone Markit Composite PMI (Feb) Final

Eurozone Services PMI (Feb) Final

Thursday, 4th March

German IHS Markit Construction PMI (Feb)

ECB Economic Bulletin

Eurozone Retail Sales (MoM) (Jan)

Eurozone Unemployment Rate (Jan)

Friday, 5th March

German Factory Orders (MoM) (Jan)

The Majors

It was a bullish start to the week for the European majors on Monday.  The EuroStoxx600 rose by 1.80%, with the CAC40 and the DAX30 gaining 1.57% and 1.64% respectively.

Economic data from the Eurozone provided support to the European majors on the day.

The upside ultimately, however, came as a result of a calming across the bond markets at the start of the week.

COVID-19 vaccine news also supported demand for the European majors following last week’s pullback. Johnson & Johnson’s single dose vaccine delivery should bring a nearer end to containment measures.

Disappointing private sector PMI numbers out of China on the weekend and head of the European open on Monday failed to peg the majors back.

The Stats

It was a particularly busy day on the economic calendar on Monday, with manufacturing sector activity and inflation in focus.

Manufacturing PMIs

Spain’s manufacturing PMI rose from 49.3 to 52.9, with Italy’s manufacturing PMI increasing from 55.1 to a 37-month high 56.9. For Spain, it was the highest reading since Jul-2020.

Finalized numbers from France and Germany were also better than prelim figures.

The French manufacturing PMI rose from 51.6 to 56.1 in February, revised up from a prelim 55.0.

German manufacturing sector activity also came in better than initially expected. In February, the PMI rose from 57.1 to 37-month high 60.7, revised up from a prelim 60.6.

As a result of the pickup in member state manufacturing sector activity, the Eurozone’s manufacturing PMI increased from 54.8 to 57.9. This was up from a prelim 57.7/

According to the Eurozone’s finalized manufacturing Market Survey,

  • Operating conditions improved to the greatest degree for 3-years.
  • All 3 broad market groups recorded an improvement in operation conditions.
  • Investment goods producers registered the strongest growth (best since Jan-2018), followed by intermediate goods.
  • Consumer goods recorded relatively modest growth but the most marked since Sep-2020.
  • Manufacturing sector growth was broad-based, with the exception of Greece.
  • Germany and the Netherlands continued to sit at the top of the table, with export gains remaining particularly strong.
  • Austria recorded the best performance in 3-years, whilst France and Italy saw the most marked gains since the beginning of 2018.
  • Spain and Ireland recorded relatively modest growth, however.

Inflation

On the inflation front, Italian consumer prices rose by 0.1%, month-on-month, according to prelim February figures. In January, consumer prices had risen by 0.7%.

The annual rate of inflation, however, ticked up from 0.4% to 0.6% in February. Economists had forecast an annual rate of inflation of -0.1%

In Germany, consumer prices increased by 0.7%, month-on-month, following a 0.8% rise in January. Economists had forecast a 0.5% increase.

According to Destatis,

  • The annual rate of inflation accelerated from 1.0% to 1.3% in February, coming in ahead of a forecasted 1.2%.
  • Prices for services increased by 1.4%, year-on-year, while prices for goods increased by a more modest 1.0%.
  • Energy prices increased by 0.3% after having fallen by 2.3% in January, year-on-year.
  • Food prices rose by 1.4% softening from a 2.2% increase in January.

From the U.S

It was a relatively busy day, with the ISM Manufacturing PMI for February the key stats of the day. Finalized Market manufacturing PMI figures were also in focus though had a muted impact on the markets.

In February, the ISM Manufacturing PMI rose from 58.7 to 60.8 in February, coming in ahead of a forecasted 58.8.

  • The new orders index increased by 3.7 percentage points to 64.8%, with the production index rising from 60.7% to 63.2%.
  • Supporting new orders was a pickup in new export orders. The new export orders index increased by 2.3 percentage points to 57.2%.
  • Labor market conditions across the sector also improved, with the Employment Index rising by 1.8 percentage points to 54.4%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Volkswagen rose by 1.54%, with BMW and Daimler seeing gains of 0.68% and 0.562% respectively. Continental saw red once more, however, falling by 0.63%.

It was a bullish day for the banks, however. Deutsche Bank rallied by 2.37%, with Commerzbank rising by 0.52%.

From the CAC, it was a mixed day for the banks. BNP Paribas fell by 0.28%, while Credit Agricole and Soc Gen gained 1.42% and 1.19% respectively.

It was also a bullish day for the French auto sector. Stellantis NV rallied by 3.52%, with Renault ended the day up by 1.37%.

Air France-KLM found even more support, rising by a further 0.90%, with Airbus SE rallying by 4.97%.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Monday. Following a 3.25% fall from Friday, the VIX slid by 16.46% to end the day at 23.35.

A rebound across the U.S equity markets supported by a pullback in U.S Treasury yields supported the fall in the VIX on the day.

The NASDAQ and S&P500 rallied by 3.01% and by 2.38% respectively, with Dow rising by 1.95%.

VIX 02321 Daily Chart

The Day Ahead

It’s another busy day ahead on the European economic calendar. Key stats include German retail sales, unemployment, and prelim February inflation figures for the Eurozone.

Expect the stats to draw plenty of interest early in the European session.

From the U.S, there are no material stats to provide the majors with direction.

The lack of stats from the U.S will leave the European majors in the hands of chatter from Capitol Hill.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 38 points.

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

Stocks Move Higher At The Start Of The Month

The Market Is Set To Rebound After Sell-Off

S&P 500 futures are up by about 1% in premarket trading as traders look ready to buy stocks after the recent sell-off.

The U.S. House of Representatives has approved Biden’s $1.9 trillion coronavirus aid package which will now go to the U.S. Senate. The package includes $1,400 stimulus checks which are expected to boost consumer spending and push prices higher.

The yields of U.S. government bonds began to move higher after the recent pullback as traders remained focused on the threat of higher inflation. That said, inflation expectations have failed to put any material pressure on the stock market today. Tech stocks like Tesla or Amazon look ready to rebound after the recent weakness, and the market’s mood is clearly bullish at the start of this month.

Oil Gains Ground On Vaccine Optimism

WTI oil is currently trying to settle back above the $62 level as traders bet that Johnson & Johnson vaccine will provide additional support to recovery in the longer-term.

FDA has recently approved the company’s coronavirus vaccine which is the first one that requires just one shot. This is the third vaccine which has been approved in the U.S. since the beginning of the pandemic. Pfizer/BioNTech and Moderna vaccines are distributed in two doses.

At this point, the supply of Johnson & Johnson vaccine is limited, but it will significantly increase in the upcoming months which is bullish for oil.

Manufacturing PMI Reports Show That The  Manufacturing Segment Continues To Recover

Today, traders will have a chance to take a look at the final reading of U.S. Manufacturing PMI report. Analysts expect that Manufacturing PMI declined from 59.2 in January to 58.5 in February.

Other countries have already published their PMI reports which indicated that the recovery in the manufacturing segment was stronger than expected. Euro Area Manufacturing PMI grew from 54.8 to 57.9 compared to analyst consensus of 57.7. In the UK, Manufacturing PMI increased from 54.1 to 55.1 compared to analyst consensus of 54.9.

If U.S. Manufacturing PMI exceeds analyst expectations, the market may get additional support.

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

The EUR Hits Reverse in Spite of Impressive Manufacturing PMIs for February

It was a busy morning on the economic calendar, with economic data from France, Germany, Italy, Spain, and the Eurozone in focus.

Manufacturing Sector Activity

It was another positive set of numbers this morning.

Spain’s manufacturing PMI rose from 49.3 to 52.9, with Italy’s manufacturing PMI increasing from 55.1 to a 37-month high 56.9. For Spain, it was the highest reading since Jul-2020.

Finalized numbers from France and Germany were also better than prelim figures.

The French manufacturing PMI rose from 51.6 to 56.1 in February, revised up from a prelim 55.0.

In February, Germany’s manufacturing PMI rose from 57.1 to 37-month high 60.7, revised up from a prelim 60.6.

As a result of the pickup in member state manufacturing sector activity, the Eurozone’s manufacturing PMI increased from 54.8 to 57.9. This was up from a prelim 57.7.

According to the Eurozone’s finalized manufacturing Market Survey,

  • Operating conditions improved to the greatest degree in 3-years.
  • All 3 broad market groups recorded an improvement in operation conditions.
  • Investment goods producers registered the strongest growth (best since Jan-2018), followed by intermediate goods.
  • Consumer goods recorded relatively modest growth but the most marked since Sep-2020.
  • Manufacturing sector growth was broad-based, with the exception of Greece.
  • Germany and the Netherlands continued to sit at the top of the table, with export gains remaining particularly strong.
  • Austria recorded the best performance in 3-years, whilst France and Italy saw the most marked gains since the beginning of 2018.
  • Spain and Ireland recorded relatively modest growth, however.

PMI Table Feb-2021

The details:

  • Both output and new orders drove the manufacturing PMI higher for the Eurozone.
  • In both cases, the upticks were the best since October’s recent peaks.
  • Higher exports, the strongest since Jan-2018, were a key driver to overall new order gains.
  • Input costs rose sharply, with inflation reaching its highest level in nearly a decade.
  • As a result of improving demand, however, firms were able to pass some of the higher expenses to clients.
  • Output prices rose at the sharpest rate since Apr-2018.
  • On the employment front, staffing levels increased for the first time in nearly 2-years.
  • Confidence about the future continued to strengthen, with optimism hitting hits highest ever level in February.

Market Impact

Through the release of today’s stats, the EUR fell from $1.20706 to a current day low $1.20446.

At the time of writing, the EUR was down by 0.21% to $1.20451. Earlier in the day, the EUR had struck a current day high $1.21012 before hitting reverse.

EURUSD 010321 Minute Chart

While the EUR was under pressure, it was a different story for the European boerses, which made further progress following the release of the numbers.

At the time of writing, the DAX30 was up by 1.28%, with the CAC40 and EuroStoxx600 up by 1.64% and by 1.75% respectively.

For the European majors, the early gains came in spite of PMI numbers from China disappointing. While manufacturing sector growth was slower, firms were particularly optimistic about what lies ahead…

Next Up

Prelim inflation figures from Italy and Germany ahead of ISM Manufacturing numbers from the U.S. Finalized Market PMI numbers are also due out of the U.S but should have a muted impact on the European majors.

Manufacturing Sector PMIs Put the EUR and the Greenback in Focus

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning. The Aussie Dollar and the Japanese Yen were in action this morning, with economic data from China also in focus.

For the Japanese Yen

The manufacturing sector was in focus early in the day.

In February, Japan’s Manufacturing PMI increased from 49.8 to 51.4, which was an upward revision from a prelim 50.6.

According to the February survey,

  • This was the strongest improvement in the health of the sector since Dec-2018.
  • Production volumes increased for the 1st time since Dec-2018.
  • Output saw a moderate expansion, supporting the uptick in the PMI.
  • Manufacturers reported that a gradual recovery in demand led to increased orders for manufactured goods.
  • New orders expanded for the second month in a row, with the pace of growth the quickest since Oct-2018.
  • Also, new export orders increased for the first time in 4-months in February, supported by strong demand from China in particular.
  • Employment levels continued to fall, however, though the pace of decline was softer than in recent months.
  • Cost burdens rose for a 9th consecutive month, with the rate of input cost inflation accelerating at the fastest pace in 2-years.
  • Optimism across the sector strengthened to the highest since Jul-2017, supported by hopes of an end to the pandemic.

The Japanese Yen moved from ¥106.491 to ¥106.500 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.06% to ¥106.63 against the U.S Dollar.

For the Aussie Dollar

In February, the AIG Manufacturing Index rose from 55.3 to 58.8, the highest level since Mar-2018.

According to the February survey,

  • Five of the six manufacturing sectors reported positive trading conditions in February.
  • The building materials sector recorded its first month of expansion since Aug-2019, supported by government fiscal stimulus.
  • Only the metal products sector continued to report mildly negative conditions in February.

According to the ABS, company gross operating profits slid by 6.6%, quarter-on-quarter, reversing a 3.2% increase in Q3. Economists had forecast a 4.0% decline.

The Aussie Dollar moved from $0.77501 to $0.77527 upon release of the figures that preceded China’s Manufacturing PMI numbers. At the time of writing, the Aussie Dollar was up by 0.57% to $0.7750.

From China

In February, the Caixin Manufacturing PMI fell from 51.5 to 50.9. Economists had forecast for the PMI to hold steady at 51.5.

According to the February survey,

  • Companies reported slower rises in both output and new work for a 3rd consecutive month.
  • Firms noted that the COVID-19 pandemic had weighed on demand and impacted business operations.
  • New export work fell for a second consecutive month.
  • Total new work expanded at the weakest pace for 9-months, with new export orders falling for a 2nd consecutive month.
  • Rising prices for raw materials and higher transport costs led to a further marked increase in input costs.
  • Factory gate prices rose solidly, as firms looked to partially pass on higher cost burdens to customers.
  • In spite of this, companies were strongly optimistic that output will rise over the next year on hopes of a global economic rebound.

The Aussie Dollar moved from $0.77570 to $0.77493 upon release of the figures.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.58% to $0.7275.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Manufacturing PMI figures for Italy and Spain are due out later this morning, along with finalized numbers for France, Germany, and the Eurozone.

Barring marked revisions to French and German PMI numbers, Italy and the Eurozone’s PMIs will likely have the greatest impact.

Prelim February inflation figures from Italy and Germany will also draw attention as reinflationary fears linger.

At the time of writing, the EUR was up by 0.07% to $1.2083.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Finalized manufacturing PMI figures for February are due out later today.

Barring a material shift from prelim figures, however, the PMI should have a relatively muted impact on the Pound.

With economic data on the lighter side, the Pound will be in the hands of market risk sentiment on the day.

We continue to see the downside limited, however, with plans to ease lockdown measures positive.

At the time of writing, the Pound was up by 0.37% to $1.3984.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. February’s ISM Manufacturing PMI numbers are due out later today along with finalized Market manufacturing PMI figures.

Expect the ISM numbers to draw the greatest interest.

Away from the economic calendar, chatter from Capitol Hill will also influence. From the weekend, the House of Representatives passed Biden’s $1.9 trillion relief package through to leave it in the hands of the Senate.

The key date for Biden and for the Democrats is 14th March, when existing unemployment benefits expire.

On the geopolitical risk front, there is also Iran in focus.

At the time of writing, the Dollar Spot Index was down by 0.10% to 90.7900.

For the Loonie

It’s a quiet day ahead, with no material stats to provide the Loonie with direction.

The lack of stats will leave manufacturing PMI figures from China and the U.S and market risk sentiment to provide direction.

At the time of writing, the Loonie was down by 0.27% to C$1.2703 against the U.S Dollar.

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

The Crypto Daily – Movers and Shakers – March 1st, 2021

Bitcoin, BTC to USD, fell by 1.95% on Sunday. Following a 0.07% decline on Saturday, Bitcoin ended the week down by 21.04% to $45,300.0.

A bullish start to the day saw Bitcoin rise to an early morning intraday high $46,703.0 before hitting reverse. In spite of the bearish week, Bitcoin ended February up by 36.78%.

Falling short of the first major resistance level at $48,063, Bitcoin slid to a late afternoon intraday low $43,171.0.

Bitcoin fell through the first major support level at $44,756 and the second major support level at $43,275.

The sell-off also saw Bitcoin fall through the 23.6% FIB of $45,501.

Steering clear of sub-$40,000 support levels, however, Bitcoin revisited $46,000 levels before easing back.

Bitcoin broke back through the major support levels and the 23.6% FIB of $45,501 before ending the day at $45,300 levels.

The near-term bullish trend remained intact in spite of the week’s reversal. 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 Sunday.

Cardano’s ADA (+0.15%) and Polkadot (+3.25%) also bucked the trend on the day.

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

Crypto.com Coin tumbled by 13.89% to lead the way down, with Bitcoin Cash SV sliding by 8.95%.

Binance Coin (-6.49%), Chainlink (-5.56%), Ethereum (-2.63%), Litecoin (-3.63%), and Ripple’s XRP (-4.45%) also struggled, however.

For the week, it was a mixed week for the cryptos.

Cardano’s ADA rallied by 19.53% to lead the way, with Polkadot rising by 8.45% to also buck the trend.

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

Binance Coin (-28.66%), Bitcoin Cash SV (-29.10%), Chainlink (-27.56%), Ethereum (-26.54%), Litecoin (-27.18%), and Ripple’s XRP (-23.57%) led the way down.

Crypto.com Coin (-7.44%) saw a relatively modest loss in the week, however.

In spite of the downward trend for the week, it was a mixed month for the majors.

Bitcoin Cash (-4.12%) and Ripple’s XRP (-15.97%) bucked the trend with losses for February.

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

Binance Coin surged by 374.51% to lead the way, with Cardano’s ADA (+281.46%) and Crypto.com Coin (+108.38%) also impressing.

Chainlink (+9.53%), Ethereum (+8.22%), Litecoin (+27.86%), and Polkadot (+53.66%) trailed the front runners.

In the week, the crypto total market cap rose to a Monday high $1,748.98bn before sliding to a Sunday low $1,277.34bn. At the time of writing, the total market cap stood at $1,399.38bn.

Bitcoin’s dominance rose to a Tuesday high 64.74% before falling to a Saturday low 60.94%. At the time of writing, Bitcoin’s dominance stood at 62.05%.

This Morning

At the time of writing, Bitcoin was up by 2.73% to $46,537.6. A mixed start to the day saw Bitcoin fall to an early morning low $45,100.0 before rising to a high $46,552.0.

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

Elsewhere, it was a mixed start to the day.

Cardano’s ADA and Polkadot were down by 1.24% and by 0.95% respectively 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 8.95% to lead the way.

BTCUSD 010321 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid a fall through the 23.6% FIB of $45,501 and the pivot level at $45,058 to bring the first major resistance level at $46,945 into play.

Support from the broader market would be needed for Bitcoin to break out from Sunday’s high $46,703.0.

Barring an extended crypto rally, the first major resistance level and resistance at $47,000 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $49,000 before any pullback. The second major resistance level sits at $48,590.

Failure to avoid a fall through the 23.6% FIB of $45,501 and the $45,058 pivot would bring the first major support level at $43,413 into play.

Barring an extended sell-off on the day, Bitcoin should steer clear of sub-$42,000 levels. The second major support level sits at $41,526.

European Equities: Manufacturing PMIs and Prelim Inflation Figures in Focus

Economic Calendar:

Monday, 1st March

Spanish Manufacturing PMI (Feb)

Italian Manufacturing PMI (Feb)

French Manufacturing PMI (Feb) Final

German Manufacturing PMI (Feb) Final

Eurozone Manufacturing PMI (Feb) Final

Italian CPI (MoM) (Feb) Prelim

German CPI (MoM) (Feb) Prelim

Tuesday, 2nd March

German Retail Sales (MoM) (Jan)

German Unemployment Change (Feb)

German Unemployment Rate (Feb)

Eurozone CPI (YoY) (Feb) Prelim

Wednesday, 3rd March

Spanish Services PMI (Feb)

Italian Services PMI (Feb)

French Services PMI (Feb) Final

German Services PMI (Feb) Final

Eurozone Markit Composite PMI (Feb) Final

Eurozone Services PMI (Feb) Final

Thursday, 4th March

German IHS Markit Construction PMI (Feb)

ECB Economic Bulletin

Eurozone Retail Sales (MoM) (Jan)

Eurozone Unemployment Rate (Jan)

Friday, 5th March

German Factory Orders (MoM) (Jan)

The Majors

It was a bearish end to the week for the European majors on Friday. The CAC40 and EuroStoxx600 slid by 1.39% and by 1.64% respectively, with the DAX30 declining by 0.67%.

Following a string of better-than-expected stats in the week, economic data from France disappointed on Friday.

The downside for the majors, however, came from market fears of a shift in central bank policy rather than weak stats.

A continued rise in government bond yields, fueled by reinflationary fears and the need for action did the damage.

The market angst continued in spite of ECB President Lagarde and FED Chair Powell attempting to comfort the markets in the week.

The Stats

It was a relatively quiet day on the economic calendar on Friday, with the French economy in the spotlight.

In January, consumer spending slumped by 4.6%, month-on-month, partially reversing December’s 22.4% rebound. Economists had forecast a 3.5% decline.

According to Insee.fr,

  • The consumption of manufactured goods tumbled by 12.9%.
    • Durable goods purchases fell by 9.9%, with spending on clothing and textiles sliding by 27.8%.
    • The 27.8% slide in spending on clothing and textiles left spending down by 14.4% year-on-year.
    • Other manufactured goods purchases fell by a relatively more modest 7.7%.
  • Energy consumption rose by 6.3%, however, with food consumption increasing by 1.7%. The upside in energy consumption was attributed to colder weather conditions.

4th quarter GDP numbers were also market negative. According to 2nd estimates, the economy contracted by 1.4%, quarter-on-quarter, revised down from a 1st estimate 1.3%.

Prelim inflation figures were not much better. In February, consumer prices fell by 0.1%, partially reversing a 0.2% rise from January.

From the U.S

It was a relatively busy day, with inflation and personal spending figures the key stats of the day.

Personal spending jumped by 2.4%, reversing a 0.4% decline from December. The numbers supported the more optimistic economic outlook.

Inflationary pressures also picked up in January. The FED’s preferred Core PCE Price Index rose by 1.5%. In December, the index had risen by 1.4%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Volkswagen and Daimler saw gains of 1.92% and 1.47% respectively, with BMW rising by 0.90%. Continental saw red, however, falling by 0.04%.

It was a particularly bearish day for the banks, however. Deutsche Bank fell by 2.67%, with Commerzbank sliding by 3.07%.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 2.06%, with Credit Agricole and Soc Gen falling by 1.57% and by 1.84% respectively.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day down by 0.86% and by 0.62% respectively.

Air France-KLM continued its recovery, rising by a further 1.23%, while Airbus SE slid by 3.05%.

On the VIX Index

It was back into the red for the VIX, delivering a 4th loss in 9 sessions, with the downside coming in spite of the S&P500 seeing red on the day.

Partially reversing a 35.38% jump from Thursday, the VIX fell by a relatively modest 3.25% to end the day at 27.95.

The NASDAQ rose by 0.56%, while the Dow and the S&P500 fell by 1.50% and by 0.48% respectively.

VIX 01321 Daily Chart

The Day Ahead

It’s a busy start to the week. February manufacturing PMI numbers for Italy and Spain are due out.

Finalized PMI numbers are also due out for France, Germany, and the Eurozone.

Barring material deviation from prelims, expect Italy and the Eurozone’s PMIs to have the greatest impact.

Later in the day, prelim inflation figures from Italy and Germany are also due out. Another pickup in inflation and the European majors could come under pressure ahead of the U.S open.

From the U.S, February’s ISM Manufacturing PMI and finalized Market PMI figures are also due out. Expect the ISM figure to have the greatest impact on the European majors.

Ahead of the European open, private sector PMI numbers from China will set the tone. From the weekend, the NBS PMIs disappointed ahead of this morning’s more influential Caixin Manufacturing PMI.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 46 points.

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

SMARTFX Launches Their Market – Centric Blog Page

The company’s aim is to publish a valuable content and helpful information, and to connect more with its valued clients in terms of educating and aiding them with their trading decisions by providing fresh content and sharing insights. Have a look at their blog page here: smartfx.com/blog

“Our goal with this new blog page is to provide our clients and our web users with an easier way to learn about SmartFX’s services as well as keeping up to date with the highlights and trends on financial market.” – said Arun Kumar, executive director at SmartFX.

Among the topics that will be discussed are market updates, from in-depth study of both technical and fundamental analysis, history and success story of asset classes, to trading psychology. SmartFX will be constantly updating its content with the conditions of the industry and companies.

“We hope you find the educational articles, trading strategies, and expert trading insights very useful in accelerating your trading learning curve to achieve consistent profitability and financial freedom”  – Asha Rathore added, managing director at SmartFX.

With SmartFX’s blogs, retail traders can find useful analysis, recommendation, insights, resources, and inspiration to become a better profitable trader.

SmartFX is owned and operated by Smart Securities and Commodities Limited. Company is regulated by Vanuatu Financial Services Commissions (VFSC) and authorized to deal in securities by providing all kinds of financial services to their clients.

 

OctaFX Secures The ‘Most Transparent Broker’ Award For 2020

The new year is in full swing, and the awards for 2020 are coming in: The influential website forex-awards.com crowned OctaFX as the ‘Most Transparent Forex Broker’ in the industry.

OctaFX as a brand went through considerable lengths to strengthen its core strategy last year: in that regard, especially its security and transparency of customer services have been distinguished here.

The platform has been awarding and recognising the internationally best and brightest Forex brokers since the year 2010.

By their own mission statement, Forex Awards goes out of its way to provide an unbiased and independent verdict for each annual award edition.

The CEO of Forex Awards, Brian Miller, said it best: ‘In offering financial services, one of a Forex broker’s essential attributes is its ability to be transparent and fair. We are pleased to congratulate OctaFX on this achievement. The company is a strong market player, providing a really clear and transparent service.’

The ‘Most Transparent Forex Broker’ award is among 37 other categories which Forex Awards commemorates annually.

OctaFX has been put in the spotlight with previous honours before—2015 and 2016 as the ‘Best Forex Broker Europe’, 2017 for ‘Best Trade Executions’, and 2018 and 2019 as the ‘Best Copy Trading Platform’.

OctaFX is a Forex broker that provides online trading services worldwide since 2011. It offers a state-of-the-art trading experience to millions of users worldwide. OctaFX has won more than 30 awards since its foundation, including the Best ECN Broker 2020 award from World Finance. The company is well-known for its social and charity activity. It also regularly conducts global and local promotion campaigns with valuable money and product prizes.

Asia-Pacific Currencies Weekly Recap: High-Flying Aussie, Kiwi Drilled Lower Amid Bond Market Rout

The U.S. Dollar rose against the Asia-Pacific currencies last week, lifted by an increase in U.S. bond yields, which drove down demand for the Japanese Yen and the higher-risk Australian and New Zealand Dollars.

Government bonds, and particularly U.S. Treasuries, have become the focal point of markets globally. Traders have moved aggressively to price in earlier monetary tightening than the Federal Reserve and other central banks have signaled, Reuters said.

Bond yields have climbed this year on the outlook for massive fiscal stimulus amid continued ultra-easy monetary policy, led by the United States. At this time last year, more U.S. fiscal stimulus on top of the already existing loose Fed monetary policy, would’ve sent the U.S. Dollar tumbling. In fact, most forecasts since late last year highlighted these two reasons as the key factors that would keep the pressure on the greenback.

However, with the U.S. economy strengthening, investors now believe that cheap money and more stimulus would speed up the economic recovery, leading to a jump in inflation. Investors are selling bonds in anticipation of higher inflation, driving up interest rates while making the U.S. Dollar a more attractive asset.

Furthermore, rising yields have dampened the appeal of higher risk assets, particularly the Australian and New Zealand Dollar, which are closely linked to overpriced commodities.

Japanese Yen

The Dollar/Yen gained last week, touching its highest level since August 28. Both the dollar and yen are considered safe-haven currencies, but the Yen tends to decline when U.S. yields rise, the dollar tends to strengthen.

Essentially, it was the widening spread between U.S. Government bond yields and Japanese Government bond yields that made the U.S. Dollar a more attractive investment.

Last week, the USD/JPY settled at 106.549, up 1.125 or +1.07%.

Australian Dollar

The Australian Dollar took a hit last week, drilled lower from multi-year peaks as a rout in bond markets spread to other risk assets, spurring the country’s central bank to intervene to stem a savage selloff in government debt.

The Aussie had been flying high throughout the week as it jumped the .8000 barrier for the first time since February 2018, but reality came back with a vengeance when investors started to dump higher risk commodities and equities.

Last week, the AUD/USD settled at .7704, down 0.0165 or -2.10%.

At one point on Friday, Australian 10-year bond futures were down as much as 23 ticks at an 11-month low of 98.0450, before bouncing to 98.2600. That still left them nursing losses of 30 ticks for the week, the sharpest drop since mid-2015, according to Reuters.

The selling pressure became so intense the Reserve Bank of Australia (RBA) launched an unscheduled offer to buy A$3 billion ($2.36 billion) in three-year debt. That seemed to calm markets a little and three-year yields eased back to 0.127% from 0.157%.

Markets were also wagering the RBA might have to hike rates as early as next year, even when policy makers have said no move was likely until 2024 at the earliest.

New Zealand Dollar

The New Zealand Dollar posted a volatile two-sided trade last week before settling sharply lower. The Kiwi rallied to a multi-year high early in the week after the Reserve Bank of New Zealand (RBNZ) kept monetary policy on hold and said inflation and employment will remain below its targets in the medium term.

The RBNZ also expressed some caution about the outlook, which may have disappointed some traders who expected central bankers to acknowledge a recent improvement in economic data.

The Kiwi plunged late in the week along with the other higher risk assets after a surge in Treasury yields drove investors into the U.S. Dollar.

Last week, the NZD/USD settled at .7233, down 0.0064 or -0.88%.

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

Asia-Pacific Indexes: Post Weekly Losses as Global Bond Yield Surge Wreaks Havoc

The major Asia-Pacific stock indexes finished lower last week as investors followed Wall Street lower with a selling spree driven by a U.S. Treasury bond yield surge.

Hong Kong stocks posted their worst week in a year, while worries about central bank tightening and new corporate regulations pressured Chinese shares. Foreigners were net sellers of Japanese stocks on the yields rise, but the Bank of Japan took advantage of the stock market rout with an ETF buy for the first time this month.

South Korean shares posted their worst weekly performance in nearly 2-1/2 years as the bond yields surge crushed demand for technology stocks. Australian shares also tumbled on firmer bond yields and a plunge in technology and miners shares.

Cash Market Performance

In the cash market last week, Japan’s Nikkei 225 Index settled at 28966.01, down 1051.91 or -3.50%. South Korea’s KOSPI Index finished at 3012.95, down 94.67 or -3.05% and Hong Kong’s Hang Seng Index closed at 28980.21, down 1664.52 or -5.43%.

In China, the Shanghai Index settled at 3509.08, down 187.19 or -5.06% and in Australia, the S&P/ASX 200 Index finished at 6673.30, down 120.50 or -1.77%.

Hong Kong Stocks Post Worst Week in One Year as Bond Yields Surge

Hong Kong stocks ended sharply lower last week, in line with broader markets, posting their worst week in one year, as a rout in global bonds sent yields flying and dampened appetite for risky assets.

For the week, HSI tumbled 5.4%, while HSCE slumped 7.1%, both logging their steepest drops since the week to March 13, 2020.

Earlier in the week, Hong Kong shares posted their worst daily performance in more than nine months on Wednesday after the city announced a hike in stamp duty on stock trading, prompting huge outflows of mainland cash.

China Shares Slump Most in Seven Months as Tightening Fears Mount

Chinese shares closed lower last week, with the benchmark stock index witnessing its biggest daily drop in seven months, as investors worried about high valuations amid growing concerns of tightening in policies.

China’s benchmark index lost ground over policy-tightening worries, after advancing to a more than 13-year high in February on optimism around the country’s economic recovery. That is despite indications that while the central bank will scale back support for the economy in 2021 and cool credit growth, fears of debt defaults and a derailed recovery will prevent it from tightening any time soon.

Nikkei Drops to Near 3-week Low as Spike in Bond Yields Spooks Investors

Japanese shares slumped last week, while logging their biggest daily decline in nearly a year, after a spike in global bond yields spooked investors already uneasy about the market’s stretched valuation.

Helping to possibly curb the selling pressure, the Bank of Japan bought exchange-traded funds (ETFs) on Friday for the first time this month as Tokyo stock prices slumped, data showed, in a sign the central bank is becoming more flexible with its asset purchases.

The BOJ bought 5 million yen ($47,068) worth of ETFs on Friday, central bank data showed. Some analysts saw the BOJ’s moves in February as a prelude to what may come out of a March review of its policy tools to make its asset-buying program more nimble.

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

US Stock Indexes Mixed as Investors Buy Growth, Sell Value Shares

The major U.S. stock indexes finished mixed on Friday in a choppy trade which revealed some evidence that the rotation out of growth shares and into value shares may be coming to an end.

After all three major indexes plunged early in the session, the tech-heavy NASDAQ Index mounted a strong comeback rally, while sellers continued to drive the typically less-volatile Dow Jones Industrial Average sharply lower.

The catalyst behind the two-sided price action remained fears of rising inflation which kept U.S. bond yields near a one-year high. The benchmark 10-year U.S. Treasury yield eased to 1.404% after jumping to 1.614% on Thursday, roiling stock markets.

Cash Market Performance

In the cash market on Friday, the benchmark S&P 500 Index settled at 3811.15, down 18.19 or -0.48%. The blue chip Dow Jones Industrial Average finished at 30932.37, down 469.64 or -1.52% and the tech-weighted NASDAQ Composite closed at 13192.35, up 72.92 or +0.55%.

The Internals

Volume on U.S. exchanges was 15.54 billion shares on Friday, compared with the 15.40 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.56-to-1 ratio on NASDAQ, a 1.73-to-1 ratio favored decliners.

The S&P 500 posted four new 52-week highs and one new low; the NASDAQ Composite recorded 54 new highs and 50 new lows.

The VIX, Wall Street’s fear gauge, hovered at a one-month high.

Sectors and Stocks

Financials and energy shares, the best performing S&P sectors this month, slipped 2% and 2.3% on Friday. Technology stocks rose 0.6% and semiconductor stocks advanced 2.3%.

The S&P 500 Value Index dropped 1.3% while the growth index rose 0.3% in a reversal of this month’s trend.

Shares of Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc rose between 0.2% and 1.4% on Friday but had their worst week in months due to a sharp rise in U.S. Treasury yields. Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when interest rates go up.

US Economic News

On the economic front, the latest data showed U.S. consumer spending increased by the most in seven months in January but price pressures remained muted.

The personal consumption expenditures price index, which is the Federal Reserve’s preferred inflation gauge, rose 0.3% for the month, slightly ahead of the 0.2% expectation but was up just 1.5% year over year.

Personal Spending grew by 2.4%, but came in below the expected 2.6%. However, the figure was much better than the previous month’s -0.4% as consumers spent their $600 government stimulus checks.

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

The Week Ahead – A Particularly Busy Economic Calendar Will Test the Markets…

On the Macro

It’s a busy week ahead on the economic calendar, with 73 stats in focus in the week ending 5th March. In the week prior, 52 stats had been in focus.

For the Dollar:

It’s a busy week ahead.

Private sector PMI and ADP employment change figures for February are in focus in the 1st half of the week.

For the private sector the ISM Manufacturing and Non-Manufacturing PMIs are due out on Monday and Wednesday.

On Wednesday, ADP Nonfarm Employment Change figures for February will also be in focus.

The market focus will then shift to the weekly jobless claim figures on Thursday ahead of the labor market numbers on Friday.

On Friday, expect the unemployment rate and nonfarm payroll figures to be the key drivers.

Other stats in the week include finalized Markit survey PMI numbers, factory orders, and trade data. We don’t expect the stats to have a material impact on the markets, however.

The Dollar Spot Index ended the week up by 0.57% to 90.879.

For the EUR:

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

On Monday and Wednesday, private sector PMI numbers for Italy and Spain are due out.

Finalized numbers for France, Germany, and the Eurozone will also draw interest.

Following impressive prelim manufacturing PMI numbers, however, only a marked downward revision would test EUR support.

On Tuesday, German retail sales and unemployment figures will provide the EUR with direction.

The focus will then shift to retail sales and unemployment figures for the Eurozone on Thursday.

German factory orders for January wrap things up. The numbers will need to be aligned with recent survey-based numbers to support the EUR and the broader market.

From the ECB, the Economic Bulletin on Thursday will also draw plenty of interest. How the ECB’s views inflation and the economic outlook will be key…

The EUR ended the week down by 0.36% to $1.2075.

For the Pound:

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

Finalized manufacturing and service PMI numbers are due out on Monday and Wednesday.

Expect any revisions to provide the Pound with direction ahead of construction PMI numbers on Thursday.

While we can expect the numbers to influence, progress on the vaccination front remains key near-term.

From the UK government, the government will also release its annual budget on Wednesday. The markets will be looking to see by how much the UK government has loosened the purse strings to support an economic recovery. Government debt has already rocketed to pre-1970 levels as percentage of GDP…

The Pound ended the week down by 0.59% to $1.3933.

For the Loonie:

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

4th quarter and December GDP numbers are due out Tuesday ahead of trade data on Friday.

Other stats in the week include labor productivity and Ivey PMI numbers that will likely have a muted impact on the Loonie.

While key stats will influence, crude oil inventories will also provide direction in the week.

The Loonie ended the week down by 0.98% to C$1.2738 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a busy week.

In the early part of the week, manufacturing and gross operating profit figures are in focus.

The focus will then shift to 4th quarter GDP numbers on Wednesday. Following the RBA’s monetary policy decision from February, expect plenty of sensitivity to the numbers.

Retail sales and trade data wrap things up on Thursday. January numbers will need to impress to support the Aussie Dollar

On the monetary policy front, the RBA monetary policy decision on Tuesday will set the tone.

The Aussie Dollar ended the week down by 2.07% to $0.7706.

For the Kiwi Dollar:

It’s a quiet week ahead.

Economic data is limited to building consent figures due out on Wednesday.

The numbers are unlikely to have a material impact, however.

With economic data on the lighter side, expect market risk sentiment to drive the Kiwi in the week.

China’s private sector PMI figures for February will influence in the 1st half of the week.

The Kiwi Dollar ended the week down by 0.90% to $0.7233.

For the Japanese Yen:

It is also a quiet week ahead.

Jobs data and 4th quarter capital spending figures are due out early in the week.

Expect capital spending to draw the greatest interest.

Finalized private sector PMI figures for February are also due out on Monday and Wednesday. Barring any material revision from prelim figures, however, the numbers should have limited impact on the Yen and the broader market.

The Japanese Yen ended the week down by 1.06% to ¥106.57 against the U.S Dollar.

Out of China

It’s a busier week ahead. The market’s preferred Caixin Manufacturing PMI on Monday will set the tone for the week.

On Wednesday, the Caixin Services PMI for February will also influence market risk sentiment.

Ahead of the stats, NBS private sector numbers from the weekend will also influence at the start of the week.

The Chinese Yuan ended the week down by 0.25% to CNY6.4737 against the U.S Dollar.

Geo-Politics

U.S Foreign Policy

Iran is back in the spotlight, as the EU and the U.S look to begin talks on the nuclear agreement.

Airstrikes last week were a clear message of intent from the new U.S administration.

How Iran responds will be of particular interest. Further destabilization in the Middle East will be something the markets would prefer to avoid.

While U.S and Iran relations will be front and center, U.S – China news will also need monitoring in the week.

U.S Mortgage Rates Jump on Rising Treasury Yields as Reinflation Jitters Hit the Markets

Mortgage rates were on the rise for a 2nd consecutive week in the week ending 25th February. Following an 8-basis point rise from the week prior, 30-year fixed rates jumped by 16 basis points to 2.97%.

Compared to this time last year, 30-year fixed rates were down by 48 basis points.

30-year fixed rates were also down by 197 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively quiet first half of the week on the economic data front.

Key stats from the U.S included consumer confidence figures for February and housing sector data.

The stats were skewed to the positive, with consumer confidence on the rise and new home sales also seeing solid growth.

In January, new home sales increased by 4.3%, following a 5.5% jump in December.

More significantly, house prices were also on the rise. The S&P/CS HPI Composite – 20 n.s.a. was up by 10.1% year-on-year in December. In November, prices had risen by 9.2%.

In February, the CB Consumer Confidence Index increased from 88.9 to 91.3, also supporting riskier assets.

On the monetary policy front, FED Chair Powell delivered testimony to lawmakers midweek. The FED Chair looked to ease market fears of a shift in monetary policy stemming from a build-up in inflationary pressures.

10-year U.S Treasury yields hit a 1-year high in the week, driven by a shift in sentiment towards inflation and interest rates, however.

Freddie Mac Rates

The weekly average rates for new mortgages as of 25th February were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 16 basis points to 2.97% in the week. This time last year, rates had stood at 3.45%. The average fee fell from 0.7 to 0.6 points.
  • 15-year fixed rates rose by 13 basis points to 2.34% in the week. Rates were down by 61 basis points from 2.95% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates surged by 22 basis point 3.99%. Rates were down by 21 points from 3.20% a year ago. The average fee fell from 0.2 points to 0.1 point.

According to Freddie Mac,

  • Optimism continues as the economy slowly regains its footing, driving mortgage rates up.
  • Though rates may continue to rise, they remain near historic lows.
  • However, combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.

Mortgage Bankers’ Association Rates

For the week ending 19th February, the rates were:

  • Average interest rates for 30-year fixed to conforming loan balances increased from 2.98% to 3.08%. Points increased from 0.43 to 0.46 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 2.93% to 3.00%. Points rose fell 0.37 to 0.33 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances rose from 3.11% to 3.23%. Points increased from 0.35 to 0.43 (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, slid by 11.4% in the week ending 19th February. In the previous week, the index had fallen by 5.1%.

The Refinance Index slid by 11.0% and was 50% higher than the same week a year ago. The index had fallen by 5.0% in the week prior.

In the week ending 19th February, the refinance share of mortgage activity fell from 69.3% to 68.5%. In the week prior, the share had fallen from 70.2% to 69.3%.

According to the MBA,

  • Mortgage rates have increased in six of the last eight weeks, with the 30-year fixed rate climbing above 3% to its highest level since Sept-2020.
  • As a result, overall refinance activity fell 11% to its lowest level since Dec-2020.
  • Additionally, the severe winter weather in Texas affected many households and lenders. This caused more than a 40% drop in both purchase and refinance applications in the state last week.
  • The housing market in most of the country remains strong, with activity last week 7% higher than a year ago.
  • Overall loan size of purchase applications increased to a record $418,000.

For the week ahead

It’s a relatively busy first half of the week on the U.S economic calendar. Key stats include ISM Manufacturing and Non-Manufacturing PMI and ADP nonfarm employment change figures for February.

Positive stats, particularly non-manufacturing and ADP numbers would support a further pickup in Treasury yields.

With the market focus now back on inflation and policy outlook, central bank chatter in the week will also influence rates.

From elsewhere, private sector PMIs from China will also draw attention in the week.

Away from the economic calendar, U.S foreign policy will be in the spotlight, with Iran and China areas of focus.

The Crypto Daily – Movers and Shakers – February 28th, 2021

Bitcoin, BTC to USD, fell by 0.07% on Saturday. Following a 1.77% decline on Friday, Bitcoin ended the day at $46,238.0.

A mixed start to the day saw Bitcoin fall to an early morning low $46,173.0 before making a move.

In spite of the early pullback, Bitcoin avoided the 23.6% FIB of $45,501 and the first major support level at $44,083.

Finding early morning support, Bitcoin rose to a mid-morning intraday high $48,407.0 before hitting reverse.

Coming within range of the first major resistance level at $48,497, Bitcoin slid back to sub-$47,000 levels.

After a range-bound afternoon and a return to $47,000 levels, a bearish end to the day left Bitcoin in the red.

A late sell-off saw Bitcoin fall to an intraday low $45,511.0. Bitcoin fell through the 23.6% FIB of $45,501 before wrapping up the day at $46,200 levels.

The near-term bullish trend remained intact in spite of the current week reversal. 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.

Crypto.com Coin fell by 5.55% to join Bitcoin in the red.

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

Polkadot rallied by 6.73% to lead the way, with Cardano’s ADA (+5.64%) and Chainlink (+4.16%) also finding strong support.

Binance Coin (+1.53%), Ethereum (+1.07%), Litecoin (+1.02%), and Ripple’s XRP (+1.82%) saw relatively modest gains on the day.

Bitcoin Cash SV ended the day flat.

In the current week, the crypto total market cap rose to a Monday high $1,748.98bn before sliding to a Tuesday low $1,291.06bn. At the time of writing, the total market cap stood at $1,394.46bn.

Bitcoin’s dominance rose to a Tuesday high 64.74% before falling to a Saturday low 60.94%. At the time of writing, Bitcoin’s dominance stood at 61.57%.

This Morning

At the time of writing, Bitcoin was down by 0.32% to $46,089.0. A mixed start to the day saw Bitcoin fall to an early morning low $45,662.0 before rising to a high $46,425.0.

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

Elsewhere, it was a mixed start to the day.

Binance Coin (+0.02%) and Polkadot (+0.12%) found early support.

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

At the time of writing, Crypto.com Coin was down by 1.27% to lead the way down.

BTCUSD 280221 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to move through the pivot level at $46,582 to bring the first major resistance level at $48,063 into play.

Support from the broader market would be needed for Bitcoin to break back through to $48,000 levels.

Barring an extended crypto rally, the first major resistance level and Saturday’s high $48,407 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $50,000 before any pullback. The second major resistance level sits at $49,889.

Failure to move through the $46,582 pivot would bring the 23.6% FIB of $45,501 and the first major support level at $44,756 into play.

Barring an extended sell-off on the day, Bitcoin should steer clear of sub-$43,000 levels. The second major support level at $43,275 should limit the downside.

European Equities: A Month in Review – February 2021

The Majors

It was bullish month for the European majors in February, reversing January’s COVID-19 driven losses. The upside came in spite of a bearish final week of the month.

The CAC40 rallied by 5.63%, with the DAX30 and EuroStoxx600 ending the month with gains of 2.63% and 2.31% respectively.

In the final week of the month, market concerns over reinflation and impact on central bank monetary policy pared some of the gains, however.

Better than expected economic data from the Eurozone and the U.S and optimism towards the economic recovery delivered support.

Corporate earnings also delivered support in the month.

The Stats

It was a busy month on the Eurozone economic calendar and an important one. The stats revealed that the impact of 2nd lockdown measures was less severe than from the first time around.

Key takes away from the economic calendar included a marked pickup in manufacturing sector activity in February.

The French manufacturing PMI and Germany’s manufacturing PMI both jumped to 3-year highs, driving the Eurozone manufacturing PMI to a 3-year high.

Service sector activity continued to struggle, however, with the pace of contraction picking up as a result of extended lockdown measures.

The Eurozone’s services PMI fell to a 3-month low 44.7 in February, according to prelim figures.

Other stats of significance included German ifo and GfK business and consumer sentiment figures, both of which were market positive.

2nd estimate GDP numbers for the 4th quarter were mixed, however. While Germany and the Eurozone saw upward revisions, France saw a downward revision.

The devil was in the details, with the numbers revealing that domestic consumption will need to see a marked pickup to support an economic recovery.

Of concern for the markets, however, was a pickup in inflationary pressures, leading to a late pullback in the European majors.

For the Eurozone, the annual core rate of inflation accelerated from 0.2% to 1.4% in January.

From the U.S

Economic data delivered mixed results once more.

Retail sales bounced back in January, with service sector activity also picking up in January, according to the all-important ISM survey-based figures.

Consumer confidence numbers were mixed, however. While the market’s preferred CB survey showed a pickup in confidence, Michigan survey-based figures showed sentiment waning in February.

Also negative was slower growth in the manufacturing sector.

Labor market numbers also delivered mixed results. While initial jobless claims fell to a February low 730k, NFP numbers for January disappointed.

Following a 227k slide in December, nonfarm payrolls increased by just 49k in January.

While the numbers were mixed, progress towards a U.S stimulus package and continued support from the FED fueled optimism for what lies ahead.

Progress on the COVID-19 vaccine front was also positive for riskier assets. It ultimately culminated, however, in jitters over reinflation and a possible need for central banks to shift position on monetary policy.

Monetary Policy

The ECB and the FED stood pat on monetary policy once more. Significantly, FED Chair Powell looked to assure the markets of continued monetary policy support by ruling out any tapering.

Late in the month Powell also testified on Capitol Hill, again reassuring the markets that the FED would stand pat for the foreseeable future.

The markets were not convinced, however. ECB President Lagarde faced similar pressure to comfort the markets over rising bond yields early in the week. Again, the markets ultimately brushed aside the assurances of unwavering support.

The Market Movers

For the DAX: It was a bullish month for the auto sector in February. Volkswagen and Daimler rallied by 10.19% and by 14.19% respectively to lead the way. BMW and Continental saw relatively modest gains of 2.14% and 2.81% respectively.

It was a mixed month for the banks, however. Deutsche Bank surged by 22.40%, while Commerzbank ended the month down by 0.91%.

From the CAC, it was a particularly bullish month for the banking sector. BNP Paribas and Credit Agricole jumped by 23.88% and by 23.77% respectively. Soc Gen led the way, however, surging by 32.97%.

It was also a bullish month for the auto sector. Renault rose by 5.33%, with Stellantis NV ended the month up by 7.27%.

Air France-KLM and Airbus SE reversed January’s losses, with gains of 14.37% and 15.28% respectively.

On the VIX Index

It was back into the red for the VIX in February, leading to just a 2nd monthly fall in 7-months. Partially reversing a 45.45% jump from February, the VIX fell by 15.53% to end the month at 27.95.

In January, NASDAQ rose by 0.93%, while the Dow and S&P500 ending the month up by 3.17% and by 2.61% respectively.

VIX 270221 Monthly Chart

The Month Ahead

We can expect more of the same in the month ahead on the Eurozone economic calendar. While the markets will look for manufacturing sector activity to deliver, service sector conditions will also need to improve.

Consumer spending will need to pick up across the Euro bloc to support a more sustained economic recovery.

From the U.S, nonfarm payrolls, service sector activity, and consumer confidence will remain key areas of focus.

Out of China, trade data and private sector PMIs will also provide direction.

On the monetary policy front, expect any hawkish chatter to catch the markets off-guard.

Central banks will need to be agile near-term to manage any material shift in economic indicators. The markets will be looking to pre-empt any shift in central bank forward guidance.

Away from the economic calendar, expect COVID-19 news and geopolitics to also influence. In particular, the markets will be looking for an easing to lockdown measures as progress is made on the COVID-19 vaccination front.

Geopolitically, Iran’s nuclear agreement is back in the spotlight. The U.S attack on Iran-linked groups in Syria in late February will set to the tone as both sides look to return to the negotiating table.

From China, not only will the markets need to see continued improvement in economic indicators but also better relations with the U.S on foreign policy and trade…

The Weekly Wrap – Reinflation Fears Overshadowed Economic Data to Drive Dollar Demand

The Stats

It was a quieter week on the economic calendar, in the week ending 26th February.

A total of 52 stats were monitored, following 72 stats from the week prior.

Of the 52 stats, 27 came in ahead forecasts, with 19 economic indicators coming up short of forecasts. There were 6 stats that were in line with forecasts in the week.

Looking at the numbers, 26 of the stats reflected an upward trend from previous figures. Of the remaining 26 stats, 22 reflected a deterioration from previous.

For the Greenback, it was back into the green, following two consecutive weeks in the red. The Dollar Spot Index rose by 0.57% to end the week at 90.879. In the previous week, the Dollar had fallen by 0.13% to 90.364.

Out of the U.S

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

The first half of the week was relatively quiet, however, with consumer confidence figures the key stat on Tuesday.

Consumer confidence was on the rise in February, supporting the market’s optimistic outlook on the economic recovery.

On Thursday, jobless claims and core durable goods orders were also positive.

Initial jobless claims fell back from 841k to 730k in the week ending 19th February.

There was also an upward revision to 4th quarter GDP figures. The U.S economy expanded by 4.1%, up from a 1st estimate 4.0%.

At the end of the week, inflation and personal spending figures also drew plenty of attention.

In January, personal spending jumped by 2.4%, more than reversing a 0.4% decline from December.

Inflationary pressures were also on the rise, albeit marginally. The FED’s preferred Core PCE Price Index ticked up from 1.4% to 1.5% at the start of the year.

On the monetary policy front, FED Chair Powell looked to calm market nerves over inflationary jitters over 2-days of testimony.

The calming was short-lived, however, which ultimately led to a jump in the Dollar at the end of the week to close out in positive territory.

In the equity markets, the NASDAQ slid by 4.92%, with the Dow and S&P500 falling by 1.78% and by 2.45% respectively.

Out of the UK

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

On Tuesday, December’s unemployment rate and January’s claimant count figures were in focus.

Claimant counts rose by 20k, reversing a 20.4k fall from December. The unemployment rate ticked up from 5.0% to 5.1% in December.

While the numbers were Pound negative, government plans to ease lockdown measures supported the Pound early in the week. The Pound had visited $1.41 levels before risk aversion sent the Pound back to sub-$1.40 levels.

In the week, the Pound fell by 0.59% to end the week at $1.3933. In the week prior, the Pound had risen by 1.21% to $1.4016.

The FTSE100 ended the week down by 2.12%, reversing a 0.52% gain from the previous week.

Out of the Eurozone

It was a relatively busy week on the economic data front, with the French and German economies in focus.

From Germany, both business and consumer confidence improved in February and March respectively. Better than expected figures provided EUR support ahead of a pullback later in the week.

German GDP numbers for the 4th quarter were also better than 1st estimate figures giving further support to the EUR.

At the end of the week, however, numbers from France disappointed. The French economy contracted by more than previously thought, with consumer spending sliding in January.

While the stats were skewed in favor of the EUR, risk aversion weighed at the end of the week to leave the EUR in the red.

On the monetary policy front, ECB President Lagarde spoke early in the week, stating that the ECB was monitoring bond yields closely. The comments came as market jitters began to creep in over possible reinflation that could curb spending and shift central bank policy outlooks.

For the week, the EUR fell by 0.36 % to $1.2075. In the week prior, the EUR had fallen by 0.01% to $1.2119.

For the European major indexes, it was bearish week. The CAC40 and the DAX30 fell by 1.22% and by 1.48% respectively, with the EuroStoxx600 sliding by 2.38%.

For the Loonie

It was a quiet week. The markets had to wait for Friday for RMPI numbers, the only stat of the week.

The RMPI jumped by 5.7% in January, following a 3.5% rise in December.

In spite of the positive numbers, however, risk aversion plagued the Loonie late in the week.

Mid-week the Loonie had visited C$1.24 levels, with a week high $1.24679 before falling back into the red.

In the week ending 26th February, the Loonie fell by 0.98% to C$1.2738. In the week prior, the Loonie had increased by 0.64% to C$1.2615.

Elsewhere

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

In the week ending 26th February, the Aussie Dollar slid by 2.07% to $0.7706, with the Kiwi Dollar ending the week down by 0.90% to $0.7233.

A Friday sell-off left the pair in the red for the week.

For the Aussie Dollar

It was a relatively quiet week.

Key stats included 4th quarter wage growth, construction work done, new CAPEX, and January private sector credit figures.

It was a mixed set of numbers that had limited impact on the Aussie Dollar.

Wage growth rose by 0.6% in the 4th quarter, following a 0.1% rise in the 3rd quarter, while construction work took an unexpected fall.

Private new CAPEX impressed, rising by 3% to reverse a 3% fall from the 3rd quarter.

On the credit side, however, private sector credit saw a softer increase, weighed by a further fall in personal credit.

While the stats were mixed, it was a shift in market sentiment late in the week pulled the Aussie Dollar into the red.

For the Kiwi Dollar

It was a busy week.

Retail sales, business confidence and trade data were in focus in the week.

The stats were skewed to the negative, with retail sales falling by more than expected in Q4.

Business confidence also softened in February, with new Zealand’s annual trade surplus narrowing in January.

On the monetary policy front, the RBNZ kept policy unchanged, which was in line with expectations. Unlike the RBA, the RBNZ held back from any surprise moves, giving the Kiwi Dollar a boost.

Risk aversion late in the week reversed the gains, however. The Kiwi Dollar had visited $0.74 levels before a late pullback.

For the Japanese Yen

It was a relatively quiet week, with no major stats until Friday.

At the end of the week, inflation, industrial production, and retail sales were in focus.

While retail sales were down by 2.4% in January, year-on-year, industrial production impressed, rising by 4.2%. In December, industrial production had fallen by 1.0%, with retail sales having fallen by 0.2%.

Deflationary pressure eased in February, which was also positive. Tokyo core consumer prices fell by 0.3% year-on-year, following a 0.4% decline in January.

While the stats were skewed in favor of the Yen, demand for the Dollar spiked as the week progressed, pulling the Yen into the red.

The Japanese Yen fell by 1.06% to ¥106.57 against the U.S Dollar. In the week prior, the Yen had fallen by 0.49% to ¥105.45.

Out of China

It was a particularly quiet week on the data front. There were no stats to provide the markets with direction in the week.

In the week ending 26th February, the Chinese Yuan fell by 0.25% to 6.4737. In the week prior, the Yuan had risen by 0.01% to CNY6.4577.

The CSI300 tumbled by 7.65%, with the Hang Seng sliding by 5.43%.