COVID-19 Vaccine Update – UK Government Ramps up Vaccinations

U.K Vaccination Rates

Late last week, the British Government announced an initiative to ramp up vaccination rates in a bid to combat the COVID-19 pandemic.

A reintroduction of lockdown measures over the holiday season was a severe blow to the economic outlook.

Approval of the AstraZeneca vaccine, however, provided the UK economy more than a glimmer of hope.

Armed with a UK manufactured vaccine, rather than dependent upon supply from overseas, the UK government changed its battle plan.

As at 12th January, the UK vaccination rate climbed to 4.26 doses per 100 people. This was up from 2.99 as at 10th January.

Expectations are for the number of new cases and COVID-19 related deaths to begin easing.

Coupled with a marked increase in vaccinations, the UK could be in a position to begin easing containment measures before the end of the 1st quarter.

When considering disappointing vaccination rates elsewhere, the UK economy could be one of the 1st out of the blocks…

Vaccination Rates

Over the weekend, the vaccination rate in the UK had stood at 2.99 per 100 people. While the number looked low, only a handful of nations were ahead.

These included Israel at 20.08 per 100, the UAE at 10.11 doses per 100, and Bahrain at 6.01 doses administered per 100.

For the U.S, skepticism towards the vaccine saw the vaccination rate lag at just 2.44 doses per 100 people.

Of greater concern for the incoming Joe Biden, however, will likely be the vaccination rates of below 50% in the worst affected states.

Over the weekend, California and Florida had reported vaccination rates of 31.7% and 44.0% respectively. These fell well short of Connecticut, which had reported a vaccination rate of an impressive 71.8%.

As at the time of writing, the U.S had administered 9.4 million, according to Bloomberg’s vaccine tracker. This is up from 8.02m that had been administered from 14th December until 10th January.

While we have seen an uptick over the last few days, just 36% of shots distributed to states have been administered. This was unchanged from the weekend.

For a full state-by-state breakdown of vaccination rates, please click here.

Impressively, however, COVID-19 vaccines administered globally has shot up from 25.84m doses to 30.57m doses.

As at 12th January, Israel continues to lead the way, with the vaccination rate climbing to 20.67%.

The UAE remains a distant second, with 11.87 doses per 100, with Bahrain’s vaccination rate standing at 6.24 per 100 as at 11th January.

EU Vaccination Rates

While we have seen vaccination rates on the rise in the UK, the EU remains a major laggard.

As at 12th January, the EU’s rate of vaccination stood at just 0.72 doses administered per 100 people.

The figures are according to the Bloomberg COVID-19 tracker.

Amongst the worst affected member states, France continued to trail significantly. As at 12th January, France had a vaccination rate of 0.29 doses per 100 people. This compared with a vaccination rate of 1.25 for Italy and 1.05 for Spain.

Comparing the rates to 11th January, the latest figures should remain a concern.

France had a vaccination rate of a woeful 0.14 doses per 100 people over the weekend. With the French Presidential Election next year, pressure on Macron is building.

Trailing the EU on vaccination rates will likely deliver more economic woes. While voters have a short memory, few will likely forget the burden of the COVID-19 pandemic.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 92,126,741 confirmed COVID-19 cases globally and 1,972.902 related deaths.

By geography, the U.S had reported 23,369,732 cases, with India reporting 10,495,816 cases.

Brazil reported the 3rd highest, with 8,195,637 cases, followed by Russia (3,471,053) and the UK (3,164,051).

France (2,806,590), Italy (2,303,263), Spain (2,137,220), and Germany (1,960,915) reported a combined 9,207,988 cases.

Looking Ahead

The market remains relatively insensitive towards the relationship between vaccination rates and rise in COVIV-19 cases.

In reality, however, we can expect the relationship to assert itself should certain governments fail to ramp up vaccination rates.

Near-term, the U.S and the Eurozone must be the main areas of focus.

In consideration must be the upward trend in new COVID-19 cases versus vaccination rates.

At present, the numbers are certainly not in favor of a marked economic recovery through the 1st quarter…

Asia-Pacific Indexes Finish Mixed as Coronavirus Concerns Cap Risk Sentiment

The major Asia-Pacific stock indexes finished mixed on Wednesday as investors continued to monitor developments on the coronavirus front as the region tries to prevent an out of control spread. Meanwhile, political turmoil in the Washington had little bearing on the price action. Investors also kept an eye on the activity in the U.S. Treasury markets after the yield on the benchmark 10-year Treasury note briefly traded at 1.187%, its highest level since March.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 28456.59, up 292.25 or +1.04%. Hong Kong’s Hang Seng Index finished at 28235.60, down 41.15 or -0.15% and South Korea’s KOSPI Index closed at 3148.29, up 22.34 or +0.71%.

In China, the benchmark Shanghai Index settled at 3148.29, up 22.34 or +0.71% and the Australian S&P/ASX 200 Index finished at 6686.60, up 7.50 or +0.11%.

Renewed Coronavirus Concerns

The Japanese government is set to expand the state of emergency to more areas on Wednesday, according to local media reports.

Kyodo News reported that Japan’s Prime Minister Yoshihide Suga is set to extend the current state of emergency to another seven prefectures including Osaka and Aichi on Wednesday, as the country’s cumulative total of coronavirus cases exceeded 300,000.

The government informed an advisory board of the planned expansion, which is expected to be approved by a government task force later in the day.

In China, local authorities in regions near Beijing are stepping up restrictions on social activity as new coronavirus cases grow.

Washington Developments

Investors watched for developments from Washington, as U.S. Vice President Mike Pence said Tuesday night he will not remove President Trump from office. That came before the Democratic-held House approved a resolution urging Pence and the Cabinet to push Trump out of the White House after he allegedly incited last week’s riot on the Capitol.

Hong Kong Shares End Lower as Investors Pause After Recent Rallies

Hong Kong shares ended lower on Wednesday, with consumer shares leading the declines, as investors paused after a rally fueled by the south-bound bargain hunting from mainland investors.

In recent sessions, as U.S. investors dump shares in Chinese companies blacklisted by outgoing President Donald Trump, bargain hunters in China are taking the opposite side of that trade, wagering that a Joe Biden presidency will reverse the investment ban.

Bumper Jobs Data, US Stimulus Bets Push Australia Shares Higher

Australian shares settled higher on Wednesday as upbeat data pointed towards improving employment figures on the horizon, with energy stocks leading the charge on an upswing in oil prices.

Australian job vacancies in the country surged 23.4% to hit an all-time high in the November quarter, data showed, signaling the likelihood for stronger employment growth in the offing.

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

European Equities: Eurozone Industrial Production and COVID-19 in Focus

Economic Calendar:

Wednesday, 13th January

ECB President Lagarde Speaks

Eurozone Industrial Production (MoM) (Nov)

Thursday, 14th January

ECB Monetary Policy Meeting Minutes

Friday, 15th January

French CPI (MoM) (Dec) Final

French HICP (MoM) (Dec) Final

Spanish CPI (YoY) (Dec) Final

Spanish HICP (YoY) (Dec) Final

Eurozone Trade Balance (Nov)

The Majors

It was a mixed day for the European majors on Tuesday, with the DAX30 and CAC40 falling by 0.08% and by 0.20% respectively. The EuroStoxx600 recovered from early losses to the back day up by 0.05%.

Concerns over the continued rise in new COVID-19 cases and low vaccination rates across the Eurozone pinned back the majors.

Hopes of an economic recovery were evident, however, with autos, banks, and travel stocks amongst the front runners.

The Stats

It was a particularly quiet day on the economic calendar. There were no material stats to provide the majors with direction on the day.

From the U.S

It was a quiet day on the economic calendar. JOLTs job openings for November were in focus late in the European session.

In November, JOLTs job openings fell from 6.632m to 6.527m. With the U.S struggling to bring the COVID-19 pandemic under control, however, the numbers had a muted impact on the European majors.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. Continental rallied by 3.19% to lead the way, with BMW and Daimler gaining 1.25% and 1.28% respectively. Volkswagen saw a more modest 0.10% rise on the day.

It was also a bullish day for the banks. Deutsche Bank rose by 1.00, with Commerzbank gaining 1.43%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 0.80% and by 0.57% respectively, with Credit Agricole gaining 1.28%.

It was also a bullish day for the French auto sector. Peugeot rallied by 3.13%, with Renault rising by 1.74%.

Air France-KLM rallied by 3.57%, with Airbus SE eking out a 0.20% gain.

On the VIX Index

It was back into the red for the VIX on Tuesday, marking a 7th day in the red from 9 sessions. Partially reversing an 11.69% gain from Monday, the VIX fell by 3.11% to end the day at 23.33.

With economic data limited to JOLTs job openings, the U.S equity markets avoided another day in the red. Support came in spite of lingering concerns over the continued rise in new COVID-19 cases.

While hopes of significant stimulus remained positive for riskier assets, there was also some apprehension ahead of earnings season.

The NASDAQ rose by 0.28%, with the Dow and the S&P500 ending the day with gains of 0.19% and by 0.04% respectively.

VIX 130121 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the economic calendar. Industrial production figures for the Eurozone are due out in the early part of the session.

Following impressive figures from Germany last week and a pickup in Manufacturing sector activity, the numbers should have a limited impact on the majors.

From the U.S, inflation figures for December are due out. Barring particularly dire numbers, however, the stats should also have limited impact on the majors.

Progress towards Eurozone-wide vaccinations and hopes of more fiscal stimulus support from the U.S should leave the markets in forgiving mood.

On the monetary policy front, however, ECB President Lagarde could move the dial in a scheduled speech early in the session.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 5 points.

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

European Equities: Futures Point Northwards with no Economic Data to Influence

Economic Calendar:

Wednesday, 13th January

ECB President Lagarde Speaks

Eurozone Industrial Production (MoM) (Nov)

Thursday, 14th January

ECB Monetary Policy Meeting Minutes

Friday, 15th January

French CPI (MoM) (Dec) Final

French HICP (MoM) (Dec) Final

Spanish CPI (YoY) (Dec) Final

Spanish HICP (YoY) (Dec) Final

Eurozone Trade Balance (Nov)

The Majors

It was a bearish start to the week for the European majors, with the DAX30 falling by 0.80% to lead the way down. The CAC40 and EuroStoxx600 weren’t far behind, with losses of 0.78% and 0.67% respectively.

A lack of economic data left COVID-19 in focus.

Across the EU, low vaccination rates and a spike in new COVID-19 cases, in spite of containment measures, weighed.

In China, reports of a spike in new COVID-19 cases added to the market angst on the day.

The Stats

It was a particularly quiet day on the economic calendar. There were no material stats to provide the majors with direction at the start of the week.

From the U.S

It was also a particularly quiet day on the economic calendar, with no material stats to influence following last week’s data dump.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Monday. BMW and Continental slid by 2.06% and by 2.64% respectively. Daimler and Volkswagen saw more modest losses of 0.95% and 1.10% respectively.

It was a bullish day for the banks, however. Deutsche Bank rose by 0.42%, with Commerzbank rallying by 2.12%.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 0.67%, with Credit Agricole and Soc Gen declining by 1.36% and by 1.35% respectively.

It was also a bearish day for the French auto sector. Peugeot and Renault ended the day with losses of 1.59% and 1.02% respectively.

Air France-KLM fell by 1.52%, with Airbus SE ending the day down by 0.36%.

On the VIX Index

A run of 4 consecutive days in the red came to an end for the VIX on Monday, marking just a 2nd day in the green from 8 sessions. Reversing a 3.62% fall from Friday, the VIX rose by 11.69% to end the day at 24.08.

Market reaction to the continued rise in COVID-19 cases and low vaccination rates weighed on riskier assets at the start of the week.

The NASDAQ slid by 1.25%, with the Dow and the S&P500 falling by 0.29% and by 0.66% respectively.

VIX 120121 Daily Chart

The Day Ahead

It’s another quiet busy day ahead on the economic calendar, with no material stats due out of the Eurozone to provide direction.

From the U.S, JOLTs job openings are due out. Barring particularly dire numbers, however, the numbers will likely have a muted impact on the European majors.

The markets are in forgiving mood on the data front, with COVID-19 vaccines and fiscal stimulus expected to reboot the economy.

The lack of stats will, therefore, leave the majors in the hands of Capitol Hill and COVID-19 vaccine news.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 43 points, with the DAX up by 51 points.

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

Asia-Pacific Stocks Mostly Lower as Promise of New US Fiscal Stimulus Stokes Global Reflation Trade

The major Asia-Pacific stock indexes were mostly lower on Monday as profit-takers came in after last week’s strong performance. Driving the price action was a surge in Treasury yields to a 10-month high. Investors were also increasing bets on “trillions” in new U.S. fiscal stimulus plans that were set to be unveiled this week as part of President-elect Joe Biden’s economic recovery program. Rising rates are also stoking the global reflation trade.

In the cash market on Monday, Hong Kong’s Hang Seng Index settled at 27908.22, up 30.00 or +0.11 and South Korea’s KOSPI Index finished at 3148.45, down 3.73 or -0.12%.

China’s Shanghai Index settled at 3531.50, down 38.61 or -1.08% and Australia’s S&P/ASX 200 closed at 6697.20, down 60.70 or -0.90%.

The markets in Japan were closed on Monday for a bank holiday.

Price Action Driven by Rising US Yields

Longer-term U.S. Treasury yields were at their highest since March after Friday’s weak jobs report only fanned speculation of more U.S. fiscal stimulus now that the Democrats have control of the government.

President-elect Joe Biden is due to announce plans for “trillions” in new relief bills this week, much of which will be paid for by increased borrowing.

At the same time, the Federal Reserve is sounding content to put the onus on fiscal policy with Vice Chair Richard Clarida saying there would be no change soon to the $120 billion of debt the Fed is buying each month.

With the Fed reluctant to purchase more longer-dated bonds 10-year Treasury yields jumped almost 20 basis points last week to 1.12%, the biggest weekly rise since June.

Apple, Hyundai Set to Agree Electric Car Tie-Up, says Korea IT News

Hyundai Motor and Apple Inc plan to sign a partnership deal on autonomous electric cars by March and start production around 2024 in the United States, local newspaper Korea IT News reported on Sunday.

The report follows a statement on Friday from Hyundai Motor that it was in early talks with Apple after another local media outlet said the companies aimed to launch a self-driving electric car in 2027, sending Hyundai shares up nearly 20%.

Hyundai Motor declined to comment on the report on Sunday, and reiterated Friday’s comments that it has received requests for potential cooperation from various companies on developing autonomous EVs.

China Inflation News

China’s Producer Price Index fell 0.4% in December as compared to a year earlier, according to the country’s Bureau of Statistics. That was a smaller decline than the 0.8% fall expected in a median forecast of a Reuters poll. Meanwhile, China’s Consumer Price Index rose 0.2% year-on-year in December, against expectations of a 0.1% increase in a Reuters poll.

Gold Miners Drag Down Australian Shares

Australian shares settled lower on Monday as cases of highly transmissible new COVID-19 variants dimmed hopes for a quick economic recovery, with gold miners leading the retreat on bullion sell-offs.

With New South Wales eased lockdown measures introduced to contain an outbreak in its northern coastal suburbs, health officials said over the weekend that they were on high alert after cases of the COVID-19 variants discovered in Britain and South Africa were identified in the country.

Gold stocks dropped as bullion prices slumped to a near six-week low on a firmer U.S. Dollar and higher Treasury yields. Newcrest Mining gave up 3.6% and AngloGold Ashanti eased 4.3% to be the biggest drags on the sub-index.

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

Bitcoin Down 20% from Top; Any Technical Experts Brave Enough to Call it Bearish?

Cryptocurrencies are down sharply across the board on Monday, with Bitcoin dropping more than 15% to a one-week low. Some traders are saying rising U.S. yields are hurting the non-income paying assets. Others are saying the bubble has burst on its parabolic rise, putting it in a position to plunge substantially.

At 07:25 GMT, Bitcoin is trading 33850, down 5670 or -14.35%.

Before I go on, I just want to mention that I don’t own Bitcoin at the moment and in fact, I don’t and never have owed any cryptocurrencies. I mention this because I want to give those who think I’m not qualified to comment on the market since I don’t have any skin in the game to stop reading any further.

I don’t analyze Bitcoin on a daily basis, but since it is a competing asset with stocks, bonds and gold to name a few, I am aware of the price action in the market. So I wouldn’t call myself completely naïve to its movement.

In 2020, I wrote only one article on Bitcoin. It was published on October 23 on FXEmpire.com. I didn’t just wake up that day and decide to write about. I saw some movement in the market on the chart that raised my interest and I decided to investigate it further.

I concluded at that time that PayPal’s entry into the cryptocurrency market was behind the move. This wasn’t a guess, but rather my knowledge and experience behind what moves a market. I am mainly a technician, but after years of experience, I think I have a good grasp on how the fundamentals and technicals work together.

I believe the technicals precede the fundamentals, which is why the 5% spike in prices encouraged me to delve into the fundamental reason behind the move.

What really surprised me about Bitcoin wasn’t the price action, but the lack of really good technical and fundamental analysis. I acknowledge that I’ve seen the articles on halving and mining, and such, but I’m confused by most of the analysis.

I read comments and analysis but I don’t know if these experts are long-term investors or short-term traders. I do know this, just about every Bitcoin analyst slaps a few percentage retracement lines on a chart and thinks they are helping an investor decide what to do. But my biggest beef is that very few every day analysts are telling me if I should buy it or sell it. But mostly, what’s my exit if I’m wrong.

Prior to the big rally from about $12,000 to $42,730, there were very few fresh articles published on FXEMPIRE, but once it started to climb sometimes thousands of dollars per day and it took out the $20,000 level, many articles were published. And of course, the obligatory $100,000 target pieces were written.

What I’ve concluded is that Bitcoin analysts love momentum when its breaking out to the upside, but when it comes to sell-offs, very little is written. I mean, who doesn’t like a volatility breakout when all you have to do is throw out targets.

Daily Bitcoin

The Challenge

As of early Monday, Bitcoin is down more than 20% from its top. My question for Bitcoin experts, are we in a bear market? I mean on the way up, you seem to think conventional technical analysis works so why wouldn’t it work on the downside. Do you have the courage and conviction in your analysis to say that Bitcoin is now in a bear market since it has corrected more than 20% from its top?

Maybe 20% isn’t the figure. Perhaps it is 30% or 40%.

My point is, it’s easy to whip out the Elliott Wave when Bitcoin is rising. It’s easy to make predictions like it’s going to $100,000 when it’s moving higher exponentially, but what about the downside when investors need you most.

Where are the longs wrong? If you think Bitcoin is overvalued, where is the value zone for the next buy? Does technical analysis really work for Bitcoin since it is supposed to be such a unique financial instrument?

I don’t have the answers, but if I was pressed to make a prediction, I would say that $24203 to $19830 is a good place to start looking for value.

Bull market or bear market, it doesn’t matter to me, but what I would like to see is some decent analysis when Bitcoin is going down, not just crickets.

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

European Equities: Capitol Hill and U.S Stimulus and COVID-19 in Focus

Economic Calendar:

Monday, 11th January

ECB President Lagarde Speaks

Wednesday, 13th January

ECB President Lagarde Speaks

Eurozone Industrial Production (MoM) (Nov)

Thursday, 14th January

ECB Monetary Policy Meeting Minutes

Friday, 15th January

French CPI (MoM) (Dec) Final

French HICP (MoM) (Dec) Final

Spanish CPI (YoY) (Dec) Final

Spanish HICP (YoY) (Dec) Final

Eurozone Trade Balance (Nov)

The Majors

It was a bullish end to the week for the European majors on Friday. The CAC40 and EuroStoxx600 rose by 0.66% and by 0.65% respectively, with the DAX30 gaining 0.58%.

Economic data from Germany coupled with hopes of further U.S stimulus supported demand for riskier assets.

While Germany’s trade surplus narrowed, both imports and exports rose by more than expected in November.

Coupled with a rise in factory orders and industrial production and a pickup in manufacturing sector activity, the stats painted a positive outlook.

From the U.S, disappointing economic data had a muted impact on the majors.

The Stats

It was a relatively busy day on the economic calendar. German industrial production and trade figures, together with French consumer spending were in focus.

In November, industrial production rose by 0.9%, following a 3.4% jump in October. Economists had forecast a 0.7% increase.

According to Destatis,

  • Production in industry excluding energy and construction rose by 1.2%.
  • Within industry, the production of intermediate goods increased by 2.4%, with the production of capital goods up by 1.3%.
  • The production of consumer goods fell by 1.7%.
  • Outside of industry, energy production was down by 3.9%, while the production in construction increased by 1.4%.
  • Compared with February 2020, production in November was 3.8% lower.

Germany’s trade surplus narrowed from €18.2bn to €16.4bn in November.

According to Destatis,

  • Exports were up 2.2%, and imports 4.7% on October 2020.
  • Germany exported goods to the value of €111.7bn and imported goods to the value of €94.6bn compared with Nov-19.
  • Compared with Nov-19, exports declined by 1.3%, and imports by 0.1%.
  • Exports to EU countries fell by 1.7%, while imports grew by 2.6%, compared with Nov-19.
  • To Euro area countries, exports fell by 2.2%, while imports from Euro countries rose by 0.5%.
  • Exports to non-EU countries fell by 0.9% compared with Nov-19, with imports sliding by 3.2%.
  • Compared with Nov-19, exports to the UK increased by 6.6%, while imports from the UK slid by 9.7%.

From France, consumer spending disappointed, with spending tumbling by 18.9%. In October, spending had risen by 3.9%.

According to Insee.fr,

  • Purchases of manufactured goods slumped by 30.1%.
  • Spending on textile-clothing more than halved. A 53% fall was attributed to a slump in spending on clothing & footwear.
  • Energy expenditure slid by 19.2%, with food consumption falling by a more modest 5.8%.
  • Compared with November 2019, household consumption expenditure on goods was 17.1% lower.

From the Eurozone, unemployment figures for the Eurozone provided support, with the unemployment rate falling from 8.4% to 8.3%.

According to Eurostat, the Eurozone’s unemployment rate had stood at 7.4% in November 2019.

From the U.S

It was a busy day on the economic calendar, with nonfarm payrolls in focus.

In December, nonfarm payrolls fell by 140K in December, partially reversing a 336k rise from November.

In spite of the decline, the unemployment rate held steady at 6.7%, with the participation rate holding steady at 61.5%.

A sharp pickup in hourly earnings was of little comfort at the end of the year. In December, average hourly earnings rose by 0.8%, following a 0.3% increase in November.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. BMW and Volkswagen fell by 1.11% and by 1.28% respectively, with Daimler declining by 0.31%. Continental bucked the trend, however, rising by 0.93%.

It was also a mixed day for the banks. Deutsche Bank rose by 0.17%, while Commerzbank slid by 4.24%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen slid by 2.21% and by 2.01% respectively, with Credit Agricole declining by 0.74%.

It was also a bearish day for the French auto sector. Peugeot fell by 2.17%, with Renault sliding by 4.00%.

Air France-KLM fell by 1.0%, while Airbus SE bucked the trend, rising by 0.54%.

On the VIX Index

It was a 4th consecutive day in the red the VIX on Friday, marking a 6th day in the red from 7 sessions. Following on from a 10.77% slide on Thursday, the VIX fell by 3.62% to end the day at 21.56.

The NASDAQ rallied by 1.03%, with the Dow and the S&P500 rising by 0.18% and by 0.55% respectively.

VIX 110121 Daily Chart

The Day Ahead

It’s a quiet busy day ahead on the economic calendar, with no material stats due out of the Eurozone to provide direction.

There are also no material stats due out of the U.S to provide the majors with direction late in the session.

The lack of stats will leave the majors in the hands of COVID-19 news and updates from Capitol Hill.

While the Democrats look to oust President Trump, any chatter on further stimulus would support the majors.

On the monetary policy front, ECB President Lagarde is also scheduled to speak. Expect any forward guidance ahead of the monetary policy meeting minutes on Thursday to also influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 113 points, while the DAX was up by 11 points.

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

The Week Ahead – Economic Data, COVID-19, and Capitol Hill in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 42 stats in focus in the week ending 15th January. In the week prior, 61 stats had been in focus.

For the Dollar:

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

In the 1st half of the week, JOLTs job openings and inflation figures are due out.

The numbers are unlikely to have a material impact on the Dollar and market risk sentiment, however.

Expectations are for labor market conditions and consumption to improve as the U.S government administers vaccinations.

In the 2nd half of the week, it gets a little busier.

The weekly jobless claims figures will draw attention on Thursday.

At the end of the week, consumer sentiment and industrial production will also provide direction.

On the monetary policy front, FED Chair Powell could move the dial on Thursday.

Away from the economic calendar, expect chatter from Capitol Hill and COVID-19 news to also influence.

The Dollar Spot Index ended the week up by 0.18% to 90.098.

For the EUR:

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

Industrial production and trade data for the Eurozone are due out on Wednesday and Friday.

We would expect the industrial production figures to garner the greatest interest.

Finalized December inflation figures for Spain and France are also due out. These are likely to have a muted impact on the EUR, however.

On the monetary policy front ECB President Lagarde has 2 scheduled speeches in the 1st half of the week. Expect any forward guidance to influence. On Thursday, the ECB’s monetary policy meeting minutes are also due out but should have a muted impact.

The EUR ended the week up by 0.02% to $1.2218.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. Key stats include November industrial and manufacturing production, and GDP figures for November.

December retail sales and November trade figures are also due out but would likely have a muted impact on the Pound.

Away from the economic calendar, expect COVID-19 news to also influence. With the UK in lockdown, strong progress towards the vaccination of priority groups should ease pressure on the Pound.

The Pound ended the week down by 0.76% to $1.3568.

For the Loonie:

It’s a particularly quiet week ahead.

There are no material stats to provide direction in the week.

The lack of stats will leave the Loonie in the hands of crude oil inventory numbers and COVID-19 news updates.

OPEC’s monthly report will also provide direction.

The Loonie ended the week up by 0.20% to C$1.2702 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week on the economic data front.

November retail sales figures are due out on Monday along with consumer sentiment numbers on Tuesday

With no other stats to consider, expect plenty of interest in the numbers. For the RBA, consumer consumption remains key to any economic recovery.

Away from the economic calendar, COVID-19 news will remain a key driver in the week.

The Aussie Dollar ended the week up by 0.82% to $0.7757.

For the Kiwi Dollar:

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

Key stats include building consent figures and electronic card retail sales figures.

Expect electronic card retail sales figures to have the greatest impact in the week.

Away from the calendar, COVID-19 will continue to provide direction. Any supply hiccups issues would test support for the Kiwi Dollar.

The Kiwi Dollar ended the week up by 0.75% to $0.7242.

For the Japanese Yen:

It is a particularly quiet week ahead.

Economic data is limited to November current account figures that are likely to have a muted impact on the Yen.

The focus will remain on COVID-19 updates and sentiment towards the economic outlook. A spike in new COVID-19 cases in Japan will be of concern, with the economy continuing to struggle.

The Japanese Yen ended the week down by 0.72% to ¥103.94 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead.

December inflation and trade figures are due out on Monday and Thursday.

While inflation figures will influence, expect trade data to have the greatest impact.

The Chinese Yuan ended the week up by 0.81% to CNY6.4746 against the U.S Dollar.

Geo-Politics

U.S Politics

U.S politics will likely remain the key drive in the week ahead.

Following the scenes on Capitol Hill, the Democrats are looking to oust Trump from office.

Trump is unlikely to go quietly, however. His actions have split the Republican Party. He has also united the Democrats, who now have control of both Houses.

With Inauguration Day approaching, the markets will be looking for Biden’s early goals.

News of plans to deliver further stimulus details this week should support riskier assets further.

European Equities: A Week in Review – 08/01/21

The Majors

It was a bullish start to the year for the European majors. In the week ending 8th January, the EuroStoxx600 rallied by 3.04%. The CAC40 and the DAX30 weren’t far behind, with gains of 2.80% and 2.41% respectively.

Early in the week, the EU’s approval of the Moderna Inc. vaccine delivered support to the European majors.

Adding to the upside in the week was expectations of more U.S fiscal stimulus to support the U.S economic recovery.

A “Blue Wave” will now allow Joe Biden and the incoming U.S administration to deliver stimulus unhindered. The Democrats won the Georgia run offs, taking control of the Senate.

The upside in the week came in spite of Germany extending its lockdown period and France considering a reintroduction of containment measures.

For the markets, the combination of COVID-19 vaccinations and U.S stimulus expectations was good enough.

The Stats

It was a busy week on the economic calendar.

The private sector, French consumer spending, and the German economy were in the spotlight in the week.

The Private sector

In December, the manufacturing sector saw a pickup in activity, driven by Germany that saw its PMI hit a 34-month high 58.3. The Eurozone’s manufacturing PMI increased from 53.8 to 55.2 in December, down marginally from a prelim 55.5.

New export sales saw a marked increase at the end of the year. painting a rosier picture for 2021.

While the service sector continued to contract, the rate of contraction eased. The Eurozone’s services PMI rose from 41.7 to 46.4 in December, down from a prelim 47.3.

At composite level, the Eurozone’s PMI increased from 45.3 to 49.1, which was also down from a prelim 49.8.

Containment measures across the Eurozone continued to pin back service sector activity at the end of the year.

The German Economy

From Germany, trade. retail sales, unemployment, and factory order figures were also upbeat, supporting the majors.

In November, retail sales saw an unexpected 1.9% rise, following a 2.6% increase in October.

Unemployment figures also impressed, with unemployment falling by 37K in December, following a 40K slide in November.

Economists had forecasted retail sales to fall by 2% and for unemployment to rise by 10K.

Late in the week, factory orders jumped by 2.3% in November, versus a forecasted 1.2% decline. The upside came off the back of a 3.3% increase in October.

Industrial production figures also came in ahead of forecasts, with production up by 0.9%, following a 3.4% jump in October. Economists had forecast a 0.7% rise.

On the negative, however, was a narrowing in Germany’s trade surplus from €18.2bn to €16.4bn in November.

The narrowing resulted from a larger increase in imports than exports, rather than a slide in exports, however, suggesting strong demand.

Exports rose by 2.2%, with imports jumping by 4.7%.

The Rest

Also on the negative was French consumer spending figures. As a result of lockdown measures, spending tumbled by 18.9% in November. In the month prior, spending had risen by 3.9%.

Other stats in the week included December prelim inflation figures and retail sales and unemployment figures for the Eurozone.

These stats had a muted impact on the majors, however, as did the ECB’s Economic Bulletin.

From the U.S

Economic data was also on the busier side.

Private sector PMI and labor market numbers were the key drivers in the week.

In December, the ISM Manufacturing PMI rose from 57.6 to 60.7, with the Services PMI climbing from 55.9 to 57.2.

A 123k fall in nonfarm payrolls in December, according to the ADP failed to spook the markets ahead of the official government figures.

Jobless claims figures eased any major concerns over a further deterioration in labor market conditions. In the week ending 1st January, initial jobless claims slipped from 790k to 787k.

At the end of the week, nonfarm payrolls fell by 140K in December, partially reversing a 336k increase in November.

In spite of the fall, the unemployment rate held steady at 6.7%, with the participation rate holding steady at 61.5%.

Optimism towards the economic outlook, stemming from fiscal stimulus expectations and COVID-19 vaccinations muted the effects of the NFP figures.

On the monetary policy front, the FOMC meeting minutes had a muted impact on the majors, with U.S politics in the spotlight.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Volkswagen slid by 3.63%, with BMW and Continental falling by 2.45% and by 1.77% respectively. Daimler saw a more modest 0.22% loss in the week.

It was a particularly bullish week for the banking sector, however. Deutsche Bank rallied by 6.48%, with Commerzbank gaining 3.80%.

From the CAC, it was a bullish week for the banks. BNP Paribas rallied by 5.06%, with Credit Agricole and Soc Gen rising by 3.39% and by 4.47% respectively.

It was a mixed week for the French auto sector, however. Peugeot fell by 1.30%, while Renault ended the week up by 2.46%.

Air France-KLM reversed a 5.28% gain with a 5.02% slide, while Airbus ended the week up by 0.36%

On the VIX Index

It was a 3rd week in the red from 4 for the VIX. In the week ending 8th January, the VIX fell by 5.23%. Reversing a 5.67% gain from the previous week, the VIX ended the week at 21.56.

For the week, NASDAQ rallied by 2.43%, with the Dow and S&P500 gaining 1.61% and 1.83% respectively.

The U.S majors hit record highs in the week, supported by expectations of substantial fiscal stimulus to support an economic recovery.

Mid-week, the Democrats won the Senate race, giving them control of both houses.

Following chaos on Capitol Hill on Wednesday, Biden was certified as the U.S President, with Trump stating that there would be an orderly handover on Inauguration Day.

VIX 080121 Weekly Chart

The Week Ahead

It’s a particularly quiet week ahead on the economic calendar. Key stats include November industrial production and trade data for the Eurozone.

Barring particularly dire trade figures, expect the industrial production figures to have the greatest influence.

Finalized December inflation figures for France and Spain are also due out but should have a muted impact on the majors.

From the U.S, inflation, the weekly jobless claims figures, retail sales and consumer sentiment figures will influence in the week.

Out of China, expect trade data to also provide direction.

Away from the economic calendar, COVID-19 news and chatter from Capitol Hill will continue to remain in focus.

The Weekly Wrap – U.S Politics, Stats, and COVID-19 Vaccine News were Key Drivers

The Stats

It was a particularly busy week on the economic calendar, in the week ending 8th January.

A total of 61 stats were monitored, following 15 stats from the week prior.

Of the 61 stats, 23 came in ahead forecasts, with 33 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 20 of the stats reflected an upward trend from previous figures. Of the remaining 41 stats, 34 reflected a deterioration from previous.

For the Greenback, it was a mixed week. After falling to a week low 89.209, the U.S Dollar Spot Index rebounded to end the week up by 0.18% to 90.098. The weekly gain marked a 3rd gain in 8-weeks. In the week prior, the Dollar Spot Index had fallen by 0.32% to end the week at 89.937.

In the week, the Democrats won the Senate race, delivering expectations of substantial fiscal support. Optimism towards the economic outlook was also fueled by COVID-19 vaccine news.

Out of the U.S

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

Private sector PMI and labor market numbers were the key drivers in the week.

In December, the ISM Manufacturing PMI rose from 57.6 to 60.7, with the Services PMI climbing from 55.9 to 57.2.

A 123k fall in nonfarm payrolls in December, according to the ADP failed to spook the markets ahead of the official government figures.

In the week ending 1st January, initial jobless claims slipped from 790k to 787k.

At the end of the week, nonfarm payrolls fell by 140K in December, partially reversing a 336k increase in November.

In spite of the fall, the unemployment rate held steady at 6.7%, with the participation rate holding steady at 61.5%.

In the equity markets, the S&P500 and Dow rose by 1.61% and by 1.83% respectively. The NASDAQ led the way, however, rallying by 2.43%.

Out of the UK

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

Finalized manufacturing and service sector PMI and Construction PMI figures for December were in focus.

The stats were skewed to the negative, with services PMI, composite PMI, and construction PMI coming up short of expectations.

An upward revision to December’s manufacturing PMI was brushed aside, with service sector activity key.

At the end of the week, December house price figures numbers had a muted impact.

With stats skewed to the negative, a reintroduction of lockdown measures added further pressure on the Pound in the week.

Ongoing vaccinations, following the approval of the AstraZeneca vaccine limited the downside, however.

In the week, the Pound fell by 0.76% to $1.3568. In the week prior, the Pound had risen by 0.85% to $1.3672.

The FTSE100 ended the week up by 6.39%, reversing a 0.64% loss from the previous week.

Out of the Eurozone

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

Private sector PMI figures for Italy and Spain and finalized figures for France, Germany, and Italy were in focus.

From Germany, retail sales, unemployment, factory orders, industrial production, and trade figures also influenced.

French consumer spending numbers also drew interest at the end of the week.

Eurozone unemployment, retail sales, trade data, and inflation figures had a muted impact on the EUR and European majors, however.

It was a mixed bag on the economic data front.

Manufacturing sector activity picked up in December, supported by another sharp increase in new orders.

Service sector conditions improved, though not enough for the sector to return to expansion.

Economic data from Germany was also impressive.

Retail sales saw an unexpected rise in November, with unemployment seeing a surprise fall to leave the unemployment rate at 6.1%.

Factory orders and industrial production also saw further upside in November, while trade data disappointed. In November, Germany’s trade surplus narrowed from €18.2bn to €16.4bn.

French consumer spending also disappointed, with lockdown measures in November weighing. Spending tumbled by 18.9% in November, reversing a 3.9% rise from October.

While economic data from Germany impressed, an extension to lockdown measures in Germany limited the impact of dated numbers.

France was also considering a reintroduction of lockdown measures, adding further pressure on the EUR.

Approval of the Moderna Inc. vaccine, however, limited the impact of planned containment measures in the week.

For the week, the EUR rose by 0.02% to $1.2218. In the week prior, the EUR had risen by 0.18% to $1.2215.

For the European major indexes, it was another bullish week. The EuroStoxx600 rallied by 3.04%, with the CAC40 and DAX30 gaining 2.80% and 2.41% respectively.

U.S politics and vaccine approvals contributed to the upside for the majors in the week.

For the Loonie

It was a relatively busy week on the economic data front. November trade and December Unemployment figures were key stats in the week.

In November, the trade deficit narrowed from C$3.73bn to C$3.34bn.

Employment figures were skewed to the negative, however, with employment falling by 62.6K. As a result of the decline, Canada’s unemployment rate ticked up by 8.5% to 8.6%.

Other stats in the week included RMPI and Ivey PMI numbers that had a muted impact in the week.

Supporting the upside for the Loonie, however, was a jump in crude oil prices and hopes of more U.S stimulus.

In the week ending 8th January, the Loonie rose by 0.20% to C$1.2702. In the week prior, the Loonie had risen by 1.06% to C$1.2728.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar, following solid gains from the previous week.

In the week ending 8th January the Aussie Dollar rose by 0.82% to $0.7757 with the Kiwi Dollar ending the week up by 0.75% to $0.7242.

For the Aussie Dollar

It was a quiet week on the economic calendar.

November building approvals and trade data were in focus in the week.

It was a mixed bag on the economic data front, however. While building approvals were on the rise, Australia’s trade surplus narrowed from A$7.456bn to A$5.022bn.

In spite of the narrowing, the Aussie Dollar found strong support on optimism towards the economic outlook.

Expectations of more U.S stimulus and the ongoing COVID-19 vaccinations delivered support for riskier assets.

For the Kiwi Dollar

It was also a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

The lack of stats left the Kiwi in the hands of COVID-19 news and U.S politics in the week.

For the Japanese Yen

It was a relatively busy week on the economic calendar. Finalized privates sector PMI figures for December were in focus, along with November household spending data.

The stats were mixed. While the manufacturing and service sector PMIs saw upward revisions, household spending disappointed.

In November, household spending slid by 1.8%, reversing a 2.1% rise from October.

A jump in new COVID-19 cases in Japan added to the negative sentiment in the week.

The Japanese Yen fell by 0.72 % to ¥103.94 against the U.S Dollar. In the week prior, the Yen had risen by 0.22% to ¥103.20.

Out of China

Private sector PMIs for December were in focus in the first half of the week, with the stats skewed to the negative.

In December, the Caixin Manufacturing PMI fell from 54.9 to 53.0, with the services PMI falling from 57.8 to 56.3

While the stats were on the weaker side, the private sector continued to expand at a solid pace.

On the negative, however, was news of U.S plans to delist Chinese entities from the NYSE.

In the week,  the Chinese Yuan rose by 0.81% to CNY6.4746. In the week prior, the Yuan had risen by 0.22% to CNY6.5272.

The CSI300 rallied by 5.45%, with the Hang Seng ended the week up by 2.38%.

European Equities: Futures Point Northwards Ahead of U.S Nonfarms

Economic Calendar:

Friday, 8th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone Unemployment Rate (Nov)

The Majors

It was another bullish day for the European majors on Thursday, following Wednesday’s broad-based market rally.

The CAC40 rose by 0.70% to lead the way, with the DAX30 and EuroStoxx600 gaining 0.55 % and 0.51% respectively.

Following Wednesday’s chaos on Capitol Hill, news of Trump stating that there would be an orderly transition on 20th January delivered support.

With the blue wave now affirmed, hopes of substantial stimulus to support the U.S economic recovery added to the upside on the day.

The Stats

It was a relatively busy day on the economic calendar. German factory orders and construction PMI and Eurozone retail sales figures were in focus along with prelim December inflation figures.

From the ECB, the Economic Bulletin and monetary policy meeting minutes had a muted impact on the majors.

Germany

In November, factory orders increased by 2.3%, following a 3.3% rise in October. Economists had forecast a 1.2% decline.

According to Destatis,

  • Domestic orders increased by 1.6% and foreign orders by 2.9% in November, month-on-month.
  • New orders from the euro area rose by 6.1% and by 0.9% from other countries.
  • The manufacturers of intermediate goods saw new orders increased by 4.9%, with capital goods manufacturers reporting a 1.1% rise.
  • Consumer goods manufacturers saw a more modest 0.5% increase in new orders, however.
  • Compared with Feb-2020, new orders in November 2020 were 4.0% higher.

In December, the IHS Markit Construction PMI rose from 45.6 to 47.1.

The Eurozone

From the Eurozone, retail sales slid by 6.1% in November, month-on-month, reversing a 1.4% rise in October. Economists had forecast a 3.4% decline.

Inflation figures provided little support, as deflationary pressures persisted at the end of the year.

For the Eurozone, core consumer price rose by 0.2% in December, following a 0.2% increase in November. Consumer prices continued to decline, however, with the consumer price index falling by 0.3%. In November, consumer prices had also fallen by 0.3%, year-on-year. Economists had forecast a 0.2% decline.

From the U.S

It was a relatively busy day on the economic calendar, with the weekly jobless claims and the market’s preferred ISM Services PMI in focus.

In the week ending 1st January, initial jobless claims stood at 787K, which was down from 790K from the previous week. Economists had forecast an increased to 800k.

In December, the ISM Services PMI increased from 55.9 to 57.2, coming in ahead of a forecasted 54.6.

Trade data for November had a muted impact on the European majors.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Continental and Daimler rallied by 2.12% and by 2.83 % respectively, while BMW and Volkswagen saw more modest gains of 0.71% and 1.06% respectively.

It was also a bullish day for the banks. Deutsche Bank rallied by 2.12%, with Commerzbank gaining 0.81%

From the CAC, it was a bullish day for the banks. BNP Paribas rallied by 2.25%, with Credit Agricole and Soc Gen rising by 0.75% and 1.04% respectively.

It was also a bullish day for the French auto sector. Peugeot rose by 1.99%, with Renault rallying by 4.16%.

Air France-KLM and Airbus SE bucked the trend, however, with losses of 1.62% and 0.61% respectively.

On the VIX Index

It was a 3rd consecutive day in the red the VIX on Thursday, marking a 5th day in the red from 6 sessions. Following on from a 1.07% fall on Wednesday, the VIX slid by 10.77% to end the day at 22.37.

Supported by Biden’s certification and the “Blue Wave”, the U.S majors hit record highs on Thursday.

The NASDAQ rallied by 2.56%, with the Dow and the S&P500 rising by 0.69% and by 1.48% respectively.

Following Wednesday’s protests, hopes of substantial fiscal stimulus to support the economy drove demand for riskier assets.

VIX 080121 Daily Chart

The Day Ahead

It’s another relatively busy day ahead on the economic calendar.

Key stats include German industrial production and trade data along with unemployment figures for the Eurozone. French consumer spending figures are also due out.

Germany’s industrial production and trade figures and French consumer spending figures will likely have the greatest influence on the European majors.

From the U.S, nonfarm payrolls and the unemployment rate for December will also influence late in the session.

Chatter from Capitol Hill will also need monitoring along with COVID-19 news updates.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 76 points, with the DAX up by 66 points.

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

Among Threats of Pandemic and Recession, Fed Already Discussing How to Tweak Economic Support

Ahead of the release of the minutes of the Federal Reserve’s December 15-16 monetary policy meeting on Wednesday, investors were hoping the minutes would detail what drove its decision to leave its monthly bond purchases unchanged. The news rattled investors at the time because most thought the central bank should have expanded the program to better support the economy through the coronavirus pandemic.

Investors were also hoping the minutes of that meeting would detail just what drove that decision and how the Fed is factoring the promise of a coronavirus vaccine into its plans. Of greatest interest was any insight those minutes offer into what it would take for central bankers to shift monetary policy in coming months if widespread immunization triggers a stronger economic rebound.

Judging from the response in the markets to the release of the minutes at 19:00 GMT on Wednesday, it looks as if the Fed sufficiently responded to those issues.

Fed Already Discussing Next Phase

Even before the minutes were released, policymakers already had begun sketching out the next phase of their debate as discussions likely hinged on how successful the country is in delivering coronavirus shots to its 330 million residents.

“The faster we get that under control the more robust this recovery is going to look,” Atlanta Federal Reserve President Raphael Bostic said in an interview with Reuters this week. “We just have to ride out this time, continue to follow public health recommendations and try to minimize the spread,” while the vaccine is distributed.

Bostic said he thought it is possible that by late spring or summer, businesses that have kept off line and people that have been kept inside because of the pandemic may resume “more normal types of interaction…the middle part of the year will be quite strong.”

Fed Minutes Highlights

The Federal Reserve was nearly unanimous in its decision last month to leave its bond-buying program unchanged, but left a wide berth for officials to decide in the future if and when changes should be made, according to minutes of the U.S. central bank’s December policy meeting.

“All participants” agreed the Fed should commit to leaving the program in place until there was “substantial further progress” towards its economic goals, and “nearly all” favored keeping the current mix of assets purchased intact rather than focusing, for example, on longer-term Treasury bonds as some analysts had advocated, said the minutes, which were released on Wednesday.

But in terms of how to judge when “substantial further progress” had been achieved, “participants commented that this judgement would be broad, qualitative, and not based on specific numerical criteria or thresholds.”

Distribution of a coronavirus vaccine, Fed officials said in the minutes, was also an “upside risk.”

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

Most Asian Stock Indexes Rise on Growth Optimism; China Telco Shares Pressure Hang Seng Index

The major Asia-Pacific stock indexes finished mixed but mostly higher on Thursday following Wall Street’s lead after the blue chip Dow Jones Industrial Average closed at a record high the previous session. The lone loser was the Hong Kong’s Hang Seng, which fell after the New York Stock Exchange changed its mind and moved to delist Chinese telecoms firms again.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 27490.13, up 434.19 or +1.60. Hong Kong’s Hang Seng Index finished at 27548.52, down 143.78 or -0.52% and South Korea’s KOSPI Index closed at 3031.68, up 63.47 or +2.14%.

China’s Shanghai Index settled at 3576.20, up 25.33 or +0.71% and Australia’s S&P/ASX 200 Index finished at 6712.00, up 104.90 or +1.59%.

Hong Kong Stocks Ended Lower on NYSE’s U-Turn to Delist 3 Chinese Telecoms

Hong Kong’s main Hang Seng Index ended Thursday lower, after the New York Stock Exchange moved to delist Chinese telecoms firms again. The New York Stock Exchange said on Wednesday it would delist three Chinese telecom companies, confirming its latest U-turn on the matter.

The NYSE’s announcement came a day after U.S. Treasury Secretary Steve Mnuchin told the NYSE chief he disagreed with an earlier decision to reverse the delistings. Hong Kong shares of China Unicom led losses among the three telecom stocks, falling 11.35% at market close, the biggest loser on the Hang Seng for the day. China Mobile fell 7.18% and China Telecom Corp dropped 9.38% at market close.

In other related news the Trump administration is considering adding tech giants Alibaba and Tencent to a blacklist of firms allegedly owned or controlled by the Chinese military, two people familiar with the matter said.

Japan’s Nikkei Hits 30-year High as Financials Gain on Democrat Control of Senate

Japanese shares ended higher on Thursday, with the Nikkei touching a 30-year peak, powered by financials as U.S. bond yields climbed on expectations of larger stimulus following a Democrat sweep in two Senate runoffs in Georgia.

The Nikkei average closed 1.60% higher at 27, 490.13, hitting its highest level since August 1990 at one point during the session and snapping a four-day losing streak.

Shares of Japanese banks and insurers, big investors in U.S. debt, are highly correlated with U.S. bond yields and were boosted by moves in the Treasury market.

Aussie Shares Close Higher

Australian markets rallied as a Democrat sweep in the U.S. Senate race lifted stimulus hopes. Closer home, Prime Minister Scott Morrison said the national cabinet will meet a month earlier than scheduled to discuss strengthening border processes amid the spread of a more contagious variant of COVID-19 that emerged in Britain.

Woodside Petroleum, Oil Search and Santos surged 5-7 percent as oil prices rose for a third day on data showing a bigger-than-expected drop in U.S. crude stockpiles and amid Saudi Arabia’s pledge to cut output.

The big four banks rose 2-4 percent, while gold miners ended broadly lower after gold futures settled with a loss of more than 2 percent on Wednesday.

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

U.S Civil Unrest Shocks the World, as Trump Looks to Dismantle the Foundations of Democracy

The Promise

Back in 2016, Donald Trump’s victory surprised the world. The polls had Hillary Clinton out in front and the U.S was set for 4 more years of Democrats in office.

President Obama had paved the way for economic prosperity. With the support of now President-Elect Joe Biden, the Obama administration had navigated the U.S out of the Global Financial Crisis.

While there had been many sceptics over Trump’s ability to run the U.S, optimism of a red-tape free 4-years favoring economic growth supported riskier assets.

Throughout Trump’s campaign and in the early days of his presidency, there was plenty of talk of making America Great Again. The U.S President had planned to reunite the U.S.

Fast forward four years and the world is in shock. This time around, however, the shock is for all of the wrong reasons.

Capitol Hill and Democracy

On Wednesday, protesters stormed Capitol Hill in a bid to reverse the U.S Presidential Election outcome from November.

This was not a peaceful protest that delayed the certification of Joe Biden as the President of the United States.

One woman reportedly died amidst the chaos, with law enforcement having to lockdown Capitol Hill.

Once considered the bastion of democracy and capitalism, the United States appeared to be in a time warp.

Worse yet, dire labor market conditions and the continued rise in new COVID-19 cases have left people helpless.

With nothing to lose and a U.S President goading supporters into action, things could have been far worse.

Many who voted for U.S President Trump back in 2016 and this time around will question the logic behind the vote.

At no point has Trump accepted the voice of the American people. Instead, he has falsely claimed fraud.

It is almost ironic that the very same claims had been laid out against Trump back in 2016.

Either way, it is time for the U.S President to leave and to leave quietly.

Leaving Quietly?

Leaving quietly does not appear to be on the cards, however, with yesterday’s events stemming from Trump’s attempts to break down the democratic process.

Even Twitter and Facebook have reportedly had to block Trump.

Unfortunately, it’s too little too late for U.S democracy, with pro-Trump protestors reflective of the “Trump effect” over 4-years.

Looking back over Trump’s presidency, a marked shift in U.S foreign policy should have been the warning sign.

Canoodling with the likes of Vladimir Putin and Kim Jong-un, while putting world peace at risk by withdrawing from the Iran Nuclear Agreement. It was a questionable start that left world leaders in limbo. Few wanted to upset the applecart so early into the U.S Presidency.

An extended trade war with China that resulted in a dubious phase 1 trade agreement was also a question mark.

And, after having survived and impeachment scare, Trump mishandled the COVID-19 pandemic.

U.S unemployment, an economic meltdown, and 369,990 COVID-19 related deaths are among Trump’s low points.

Wednesday’s incitement of violence that ultimately led to action from social media sites was a culmination of 4-years of Trump messaging.

International Horror

It’s hardly surprising that world leaders responded in horror to the scenes broadcasted from Capitol Hill.

Whether this puts the U.S on a weaker footing on the international stage remains to be seen. In Joe Biden’s favor is a lifelong career in U.S politics and his two terms as Obama’s running mate.

Addressing the social and civil unrest and restoring America’s image will be a must for the Biden administration.

A continued rise in tension and more unrest over the next 4-years would distract the administration from delivering on campaign pledges.

Such an eventually would be a disaster for a nation that needs to restore diplomatic ties not to mention reunite a nation.

Failure to achieve both would further remove the U.S from the international stage. With China taking more control of its future, many will be looking for Biden to turn it around.

Getting through the next 2-weeks and Inauguration Day will now be key. Following yesterday’s scenes, there is certainly cause for concern, with more civil unrest plausible.

Policy and Market Risk

For the global financial markets, the hope of more U.S stimulus has fueled demand for riskier assets. A distracted administration grappling with domestic unrest would be an issue.

The good news for now is that the Democrats have control of both houses and don’t need Republican votes to push policy.

The bad news, however, is that it may take more than 4-years to repair the damage.

There are likely to be a number of nations that will look to take advantage of America’s apparent weakness. This will need to be another area to monitor in the weeks and months ahead.

At the time of writing, the U.S Dollar Spot Index was down by 0.57% to 89.422 for the current week. An escalation from yesterday’s protests would likely add further pressure on the Greenback near-term.

US Dollar Index 070121 Weekly Chart

European Equities: Economic Data, the Democratic Victory, and News from Capitol Hill in Focus

Economic Calendar:

Thursday, 7th January

German Factory Orders (MoM) (Nov)

German IHS Markit Construction PMI (Dec)

Italian CPI (MoM) (Dec)

Eurozone CPI (YoY) (Dec)

Eurozone Retail Sales (MoM) (Nov)

Friday, 8th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone Unemployment Rate (Nov)

The Majors

It was a particularly bullish day for the European majors, which bounced back from Tuesday’s pullback.

The DAX30 rallied by 1.76% to lead the way, with the CAC40 and EuroStoxx600 gaining 1.39% and 1.36% respectively.

An EMA announcement of the recommendation for approval of the Moderna Inc. COVID-19 virus supported the majors. News of Germany extending its lockdown was muted by the vaccine news, in spite of France also facing the possibility of another lockdown.

From Capitol Hill, the Democrats looked set to take control of the Senate, raising the prospects of more fiscal stimulus, which also supported the upside.

The Stats

It was a busy day on the economic calendar, with the private sector PMI and inflation figures in focus.

Key stats included December service sector and composite PMI figures for Italy and Spain. Finalized PMIs from France, Germany, and the Eurozone were also in focus.

Italy’s services PMI rose from 39.4 to 39.7 in December, versus a forecasted rise to 45.3. In November, the PMI had tumbled from 46.7 to 39.4.

From Spain, the services PMI increased from 39.5 to 48.0, versus a forecasted rise to 45.0. In November, the services PMI had fallen from 41.4 to 39.5.

France’s services PMI came in at 49.1, which was down from a prelim 49.2, while up from a November 38.8.

In December, Germany’s PMI rose from 46.0 to 47.0, which was down from a prelim 47.7.

For the Eurozone, the services PMI came in at 46.4, which was down from a prelim 47.3. In November, the PMI had risen from 46.9 to 41.7.

According to the December survey,

  • The Composite PMI rose from 45.3 to 49.1 in December, revised down from a prelim 49.8.
  • Services remained a drag on private sector output, with activity falling for a 4th consecutive month.
  • Manufacturing sector activity, by contrast, expanded for a 6th consecutive month.
  • Ireland sat at the top of the table, with a 4-month high composite PMI of 53.4.
  • Germany ranked 2nd, with a 2-month high composite PMI of 52.0.
  • Italy sat at the bottom of the table, with a 2-month high composite of 43.0.

From the U.S

It was a busy day on the economic calendar, Finalized service and composite figures were in focus along with ADP nonfarm and factory order numbers late in the European session. The stats were skewed to the negative.

ADP nonfarm employment change figures were particularly disappointing. According to the ADP, nonfarm employment fell by 123K in December, partially reversing a 304k rise in November.

In December, the Services PMI came in at 54.8 which was down from a prelim 55.3 and a November 58.4. The composite PMI came in at 55.3 which was down from a prelim 55.7 and November’s 58.6.

On the positive, factory orders rose by 1.0% in November, following a 1.3% increase in October. Economists had forecast a 0.7% rise.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. Continental and Daimler slid by 1.41% and by 1.51% respectively, while BMW and Volkswagen saw relatively modest losses of 0.59% and 0.35% respectively.

It was a bullish day for the banks, however, supported the prospects of the Democratic control of the Senate. Deutsche Bank and Commerzbank rallied by 4.68% and by 5.63% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole saw gains of 5.52% and 4.05% respectively, with Soc Gen rallying by 6.83%.

It was another mixed day for the French auto sector, however. Peugeot slid by 2.68%, while Renault rose by 0.19%.

Air France-KLM found much-needed support, rallying by 3.44%, with Airbus SE ended the day up by 0.38%.

On the VIX Index

It was a 2nd consecutive day in the red the VIX on Wednesday, marking a 4th day in the red from 5 sessions. Following on from a 6.04% fall on Tuesday, the VIX fell by 1.07% to end the day at 25.07.

The Dow and the S&P500 rose by 1.44% and by 0.57% respectively, while the NASDAQ fell by 0.61%.

For the U.S, both the Dow and the S&P500 gave up some of their gains as protests over Trump’s election loss hit Capitol Hill.

The blue wave materialized, with the Democrats taking control of the Senate. Expectations of more fiscal stimulus drove demand for banks and industrials, while tech stocks struggled. Greater regulatory oversight for the tech sector is anticipated following the Democrat victory, which weighed on the NASDAQ.

VIX 070121 Daily Chart

The Day Ahead

It’s a busy day ahead on the economic calendar.

Key stats include German factory orders and Eurozone retail sales figures for November.

German construction PMI and Italian and Eurozone inflation figures for December are also due out.

Barring particularly dire numbers, however, the stats are unlikely to provide the majors with direction.

From the U.S, trade data and the market’s preferred ISM services PMI figures are due out.

Expect the services PMI to have the greatest impact late in the European session.

Away from the economic calendar, the outcome of the Senate race and the violence on Capitol Hill will set the tone going into the open.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 57 points.

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

COVID-19 Vaccine Update – EMA Recommends Moderna Inc. Vaccine.

The Latest

Following the authorization for the BioNTech/Pfizer Inc. vaccine authorization late last year, the EMA was back in action this week.

Today, the EMA’s human medicines Committee (“CHMP”) recommended the COVID-19 Moderna Inc. vaccine for authorization.

According to the EMA, the CHMP thoroughly assessed the data on the quality, safety, and the efficacy of the vaccine.

The EMA recommended by consensus a formal conditional marketing authorization be granted by the EU Commission.

Emer Cooke, the Executive Director of the EMA, stated that the vaccine provides the EU with another tool to overcome the current emergency.

The EMA also noted:

  • A very large clinical trial showed that the COVID-19 Vaccine Moderna was effective at preventing COVID-19 in people from 18 years of age.
  • Efficacy was calculated in around 28,000 people from 18 to 94 years of age. All had no sign of previous infection.
  • The trial showed a 94.1% reduction in the number of symptomatic COVID-19 cases in the people who received the vaccine.
  • Additionally, the trial also showed 90.9% efficacy in participants at risk of severe COVID-19.
  • Healthcare providers must give two injections of the COVID-19 Vaccine Moderna, 28 days apart.

As a result of the recommendation, the EU Commission will now fast-track the approval process.

Once the EU Commission has granted conditional marketing authorization for the vaccine, Moderna Inc. can begin to distribute the vaccine across the region.

Vaccine Orders

Late last year, the EU had ordered an additional 80m doses of the Moderna Inc. vaccine. The latest order was in addition to 80m doses that had been previously ordered.

While the distribution of the Moderna Inc. vaccine likely to commence in a matter of days, the EMA has yet to review the AstraZeneca vaccine.

According to the latest reports, the EMA is awaiting additional data in order to being the review process.

Speed of distribution of the vaccine and vaccination rates will now be key in the fight against the pandemic.

Asia-Pacific Markets Mixed; China, Hong Kong Tech Shares Surge, Regional Energy Stocks Jump

The major Asia-Pacific stock indexes finished mixed with China and Hong Kong posting solid gains. Driving the price action in those two regions were developments out of Washington that centered on Chinese tech giants. In all of the areas, regional energy stocks took center stage with strong advances.

The gains in China and Hong Kong were driven by strength of shares of Chinese tech giants Tencent and Alibaba which rose after U.S. President Donald Trump signed an executive order banning transactions with eight Chinese software applications, including WeChat Pay and Ant Group’s Alipay. The order is only set to go into effect after Trump leaves office.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 27055.94, down 102.69 or -0.38%. Hong Kong’s Hang Seng Index finished 27692.30, up 42.44 or +0.15% and South Korea’s KOSPI Index closed 2968.21, down 22.36 or -0.75%.

China’s Shanghai Index settled at 3550.88, up 22.20 or +0.63% and Australia’s S&P/ASX 200 Index finished at 6607.10, down 74.80 or -1.12%.

In other news, regional energy stocks also advanced in Wednesday trade after Saudi Arabia agreed to voluntary production cuts in February and March. Also, a private survey showed services sector activity in China expanded at a slower pace in December.

Trump Bars US Transactions with Eight Chinese Apps Including Alipay

U.S. President Donald Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay mobile app, the White House said, escalating tensions with Beijing two weeks before President-elect Joe Biden takes office.

The move, first reported by Reuters, is aimed at curbing the threat to Americans posed by Chinese software applications, which have large user bases and access to sensitive data, a senior administration official told Reuters.

China’s Blue-Chip Index Ends at 13-year High Led by Gains in Banking, Healthcare Stocks

China’s blue-chip index closed on Wednesday at its highest level in nearly 13 years after rising for five consecutive sessions, as investors expect the government to sustain policy supports to counter COVID-19’s persisting impact on the economy.

In other news, a private survey showed services sector activity in China expanding at a slower pace in December, with the Caixin/Markit services Purchasing Managers’ Index coming in at 56.3. That compared against November’s reading of 57.8.

Hong Kong Shares End Higher on Energy, Tech Supports

Hong Kong shares extended gains on Wednesday after rising for six consecutive sessions, led by energy and tech shares. At the close of trade, the benchmark Hang Seng Index was trading at its highest level since last February.

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

COVID-19 Vaccine Update – U.S Vaccination Rates Should be of Concern

The Latest

Late last year, the global equity markets found further upside, supported by the rollout of multiple vaccinations.

Unprecedented progress by global pharmas towards COVID-19 vaccines has given governments a choice of 5 vaccines to date.

A 6th vaccine is expected shortly, with Johnson & Johnson expected to be the next pharma to deliver a vaccine.

While the availability of multiple vaccines is certainly a positive, availability of vaccines and vaccination rates remain key to bringing an end to the COVID-19 pandemic.

This week, the U.S government published the best and worst vaccination rates across U.S hospitals.

When considering the impact of the COVID-19 pandemic on the U.S economy and beyond, low vaccination rates should be of some concern.

While the U.S government has enforced containment measures, there has been no enforcement on vaccinations.

To make matters worse, limited supply of COVID-19 vaccines have added to a slow rate of inoculation across the country.

According to the U.S government, the number of vaccines administered have fallen well short of the 20 million that the Trump administration had projected before the end of 2020.

Supply and demand have both contributed to the lower rate of vaccinations across the country.

All of this ultimately means that the vaccination of phase 1 groups a, b and c will take far longer than initially predicted.

The Latest COVID-19 Numbers

At the time of writing, the total number of confirmed COVID-19 cases stood at 86,834.916, with the total number of related deaths rising to 1,875,520.

In the U.S, the total number of cases now stands at 21,578,606, with 356,620 related deaths.

The total number of cases in the U.S is double that of India’s 10,375,478, which is the 2nd most affected nation.

Across the 4 most adversely affected EU member states, the total number of cases stood at 8,658,967, with 230,551 related deaths.

The Outlook

An introduction of AstraZeneca’s vaccine to the U.S and a successful end to Johnson & Johnson’s clinical trials would ease supply issues.

This won’t address issues that governments face in terms of demand, however.

For those that don’t fall within priority groups, the bigger question is whether the slow rollout will further delay mass vaccinations.

With many nations now going through the winter months, vaccinations would need to be completed before next winter.

This gives governments as little as 9-months before seasonal changes kick and raise the prospects of another pickup in new cases.

From a market perspective, bringing an end to the COVID-19 pandemic before the summer would support a strong economic recovery.

A post-summer end, however, could result in a slower pace of recovery or even bring into doubt a recovery.

Looking at the U.S, U.S labor market conditions remain woeful. Failure to take control of Operation Warp Speed would weigh heavily on consumption.

At some point, therefore, we could see a greater influence of vaccination rates and supply on the global financial markets.

Daily vaccination rates and new daily COVID-19 cases will need to be monitored near-term. At a minimum, we will need to see an improving trend between daily vaccinations and new daily cases

No Enforcement at Federal Level

Across the U.S, more than 200,000 new COVID-19 cases are being reported each day. At the current rate of spread, the number of COVID-19 vaccines administered fall short of the number of new daily cases.

Less than 10% of the U.S population have caught the COVID-19 virus to date. The number of new cases would, therefore, likely continue to spike.

Such an eventuality would have a far more material impact on the U.S economy and labor market conditions.

It is, therefore, in the best interest of the U.S government to enforce vaccinations. Particularly in more adversely affected U.S states.

Until now, there has yet to be any talk of enforcement at federal or even state level…

European Equities: Service Sector PMIs, U.S Stats, and the Senate Race in Focus

Economic Calendar:

Wednesday, 6th January

Spanish Services PMI (Dec)

Italian Services PMI (Dec)

French Services PMI (Dec) Final

German Services PMI (Dec) Final

Eurozone Markit Composite PMI (Dec) Final

Eurozone Services PMI (Dec) Final

German CPI (MoM) (Dec)

Thursday, 7th January

German Factory Orders (MoM) (Nov)

German IHS Markit Construction PMI (Dec)

Italian CPI (MoM) (Dec)

Eurozone CPI (YoY) (Dec)

Eurozone Retail Sales (MoM) (Nov)

Friday, 8th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone Unemployment Rate (Nov)

The Majors

It was a bearish day for the European majors on Tuesday, with the DAX30 falling by 0.55% to lead the way down. The CAC40 and the EuroStoxx600 saw relatively modest losses of 0.44% and 0.19% respectively.

Uncertainty ahead of the outcome to the Georgia runoff pegged the European majors back.

Concerns over the continued spike in new COVID-19 cases and the impact on the speed of the economic recovery also lingered.

COVID-19 vaccinations across Europe limited the downside, however, with the markets expecting the economy to rebound.

The Stats

It was a relatively busy day on the economic calendar, with the German economy in focus.

Key stats included November retail sales figures and December unemployment change numbers and unemployment rate.

In November, retail sales rose by 1.90%, month-on-month, following a 2.6% increase from October. Economists had forecast a 2% decline.

In December, unemployment decreased by 37k, following on from a 39k fall from November. The unemployment rate held steady at 6.1%. Economists had forecast a 10k rise in unemployment.

From the U.S

The market’s preferred ISM Manufacturing PMI figures were in focus late in the European session.

In December, the ISM Manufacturing PMI jumped from 57.5 to 60.7. Economists had forecast a fall to 56.5.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Continental and Daimler rose by 0.17% and by 0.37% respectively, while BMW and Volkswagen fell by 0.88% and by 0.70% respectively.

It was a bullish day for the banks. Deutsche Bank rose by 1.44%, with Commerzbank rallying by 2.52%

From the CAC, it was a mixed day for the banks. BNP Paribas fell by 0.09%, while Credit Agricole and Soc Gen rose by 0.03% and by 0.11% respectively.

It was also a mixed day for the French auto sector. Peugeot slipped by 0.01%, while Renault rose by 0.81%.

Air France-KLM followed Monday’s 4.88% slide with a 0.88% decline, with Airbus SE ended the day down by 0.07%.

On the VIX Index

It was back in the red the VIX on Tuesday, marking a 3rd day in the red from 4 sessions. Partially reversing a 18.55% jump on Monday, the VIX fell by 6.04% to end the day at 25.34.

The NASDAQ and the S&P500 rose by 0.95% and by 0.71% respectively, with the Dow ending the day up by 0.55%.

VIX 060121 Daily Chart

The Day Ahead

It’s yet another busy day ahead on the economic calendar, with the Eurozone’s private sector back in focus.

December’s service sector and composite PMIs for Italy and Spain are due out later this morning. Finalized PMIs for France, Germany, and the Eurozone are also due out.

Barring any marked revisions from prelim figures, the focus will likely be on the Eurozone’s Composite PMI.

From the U.S, it’s also a busy day ahead on the economic calendar. ADP nonfarm employment change, factory orders, and the finalized Services PMI are due out late in the session.

The ADP figure will likely have the greatest influence on the European majors.

Away from the economic calendar, updates from Capitol Hill on the Georgia runoffs will continue to influence along with COVID-19 news.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 20 points, while the DAX was up by 38 points.

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

Commodity Market Wrap-Up: WTI Crude Breaches $50 for First Time in 11 Months

Domestic and international crude oil benchmarks rallied late in the session on Monday, reversing earlier losses on reports that Saudi Arabia will make voluntary cuts to its oil output in February and March. Natural gas futures extended yesterday’s gains after the latest forecasts projected weather-driven demand. Gold up but steady ahead of Georgia election results.

Oil Prices Jump 4% on OPEC+ Output Talks

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures climbed more than 4% on Tuesday as OPEC+ was nearing a compromise to hold crude production steady in February.

During talks with the Organization of the Petroleum Exporting Countries and others including Russia, Saudi Arabia offered to make voluntary cuts to its oil production in February, two OPEC+ sources said.

Saudi Arabia said it would unilaterally cut 1 million barrels a day of its current crude production next month, a surprise move that comes after it agreed earlier in the day with other big producers to keep their collective output flat.

Saudi Arabia and Russia reached a compromise on oil policy among the world’s biggest producers, agreeing to maintain output levels through February and delay any increase until March, according to officials familiar with negotiations.

The producer group was setting aside a possible output increase on fears that the market could be flooded with crude if new coronavirus lockdowns further depress demand, four OPEC+ sources told Reuters on Tuesday.

An OPEC document dated January 4 showed the group was studying a range of scenarios including more production, no change or cutting output by 500,000 barrels per day (bpd) in February.

The bullish news sent U.S. prices above $50 for the first time since February.

Natural Gas Futures Extend Gains on Fresh Demand Forecasts

February natural gas futures continued to build on Monday’s gains, while moving closer to its December 22 top at $2.775, a potential breakout point.

The American Global Forecast System (GFS) model added 12 heating degree days (HDD) overnight, while the European model picked up 3-4 HDD by trending slightly colder for the January 16-19 time frame, according to NatGasWeather.

Meanwhile, in the six- to 10-day period, covering Sunday through January 14, Maxar made colder adjustments to its latest forecast for the Midwest and South.

Gold Futures Reach Two-Month High

February gold futures popped to a two-month high early Tuesday, underpinned by growing concerns about COVID-19 and the possibility of new restrictions and lockdowns that could slow the global economic recovery. Some traders were also reacting to the weaker dollar and the possibility it could drop even further if the Democrats win special U.S. Senate run-offs in Georgia.

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