Check out the news that happened in the last 24 hours

 1️⃣ Yesterday's main news

 - International oil prices continue to reach new 3-year highs.

 - U.S. monthly retail sales rate recorded a negative value in May.

 - The Fed's use of overnight reverse repurchases fell by the most since April 1.

 The White House's patience for bilateral negotiations on the infrastructure project is said to be nearing its limit.

 - The southwestern United States is facing a once-in-a-thousand-year drought crisis.

 - The US and Europe announced the suspension of retaliatory tariffs on the subsidy dispute between Airbus and Boeing.

 - EU launches bond issuance plan to finance recovery fund, raising 20 billion euros.

 2️⃣ Notable economic events and data today

 - the US will publish the EIA of crude oil inventories through the end of the week of June 11. API crude inventories announced early this morning recorded the fourth consecutive week of decline, in line with expectations, and the level  decrease is the largest.  since January. Crude WTI crude oil futures published in the After data were slightly higher.  Investors can pay attention to possible fluctuations in oil prices tonight.

 - Today, Russian President Putin and US President Biden held a summit.  According to reports, the summit will start on Wednesday. The Kremlin spokesman said the Putin-Biden summit will last 4-5 hours, during which there will be a break.  And change.  Format of the meeting.

 - tomorrow, the Federal Reserve will release interest rate resolutions, policy statements, and economic expectations.  Then, Fed Chairman Powell held a press conference.

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Check out the news that happened in the last 24 hours

 Yesterday's main news

 - Gold, after falling below the level of $ 1850, has risen sharply again.

 - Nasdaq and the S&P 500 index all set new closing highs.

 - The Fed's use of reverse repurchase instruments hit a record high for six consecutive days.

 - New York Fed survey: One-year average inflation expectations could reach an 8-year high.

 - US bipartisan senators reportedly will form infrastructure proposals by the end of the week

 - The UK epidemic control and prevention period has been postponed for 4 weeks.

 - The European Union begins to issue US$1 trillion in bonds.

 - US sanctions on Russian debt come into effect on the 14th.

 - Tudor Jones: Will purely bet on inflation trades.

 2️⃣ Notable economic events and data today

 - Regarding the central bank's dynamics, the Reserve Bank of Australia will release the minutes of its June monetary policy meeting today.  Additionally, today , Bank of England Governor Bailey will deliver a speech on the future of financial services.

 - About the main data, today, the monthly retail rate for May in the US, known as “terrorist” data, will be released.  The expected value is -0.8%, much lower than the previous value of 0%.  If the data is better than expected, it will be able to further support the US dollar and gold causing gold to fall.

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Check out the news that happened in the last 24 hours

 Yesterday's main news

 - US May CPI inflation data hits 13-year high, markets price Fed rate hike in 2023.

 - Former Iranian official lifted sanctions, oil prices fell sharply in the short term.

 - Bipartisan group of US senators reach agreement on tax-free infrastructure plan.

 - The Fed's balance sheet exceeds $8 trillion for the first time.

 Meat giant JBS pays $11 million in Bitcoin to solve hack.

 - The European Central Bank will significantly accelerate its bond purchases and watch the exchange rate go up.

 The Basel Committee listed Bitcoin as the highest risk category in the bank's capital proposal.

 2️⃣ Notable economic events and data today

 - Today the IEA will release its monthly crude oil market report.  Thursday's OPEC monthly report maintains the projected growth rate of global crude oil demand in 2021 at 5.95 million bpd and a recovery in oil demand in the second half  expected to be strong.

 - Today the Prime Minister of the UK and the Governor of the Central Bank attended the event.

 - The next day, the total number of US oil rigs for the week to June 11 will be announced.

 - The 46th G7 Summit will be held from 11-13 to discuss key issues such as corporate tax planning and vaccine financing.
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Weekly Market View on Cryptocurrencies

 MARKET VIEW

Weekly changes: BTCUSD +8.42%

On Thursday, 3 June, bitcoin prices rose again to 39,400 USD. Bitcoin's price began to rise after it fell to 33,300 USD on 30 May. Over the past week, the asset has increased by 8%. Bitcoin capitalization exceeded 730 USD billion, and its market share remained at 40%. The Wall Street Journal believes that the cryptocurrency market will greatly suffer since governments worldwide are planning to tighten the industry regulation, and traders are liquidating their positions in a panic.

Analysts of the consulting company Massari noted that the market drawdown caused by macroeconomic factors to which bitcoin is now tied. Experts said one of the reasons for correcting the overheating economy and the Fed's reaction was that investors were worried that instead of quantitative easing (Q.E.), the market is waiting for quantitative tightening (Q.T.).

KEY POINTS

According to the analytical service Sentiment, large cryptocurrency holders have returned to buying digital coins. The largest holders of bitcoin, whose addresses contain 100 to 100,000 digital coins, have added 50,000 bitcoins (1.8 billion USD at the current exchange rate) to their wallets over the past ten days.

The accumulation of digital coins by 'whales' usually indicates the upcoming growth of quotations, while investors perceive the sale of cryptocurrency by large holders as a signal for a fall. A similar situation happened last month. Large investors and funds began to buy the cryptocurrency during the bitcoin price fall to 30,000 USD. After that, the number of bitcoins on cryptocurrency exchanges reached its minimum in the last four months.

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Check Out The News of The Past 24 Hours By Money Life Research

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 + Check out the news of the past 24 hours:

 

 1️⃣ GBPUSD continues to have a chance to go up thanks to the hearing of the Fed Chairman

 - GBP is in a good position to increase in value because Mr. Powell has the potential to weaken the dollar.  Yohay Elam, Analyst at FXStreet commented: “While investors prefer a faster than the normal economic opening, the UK government's 4-month conservative exit plan has been well received by the market.  , seems convinced that the current blockade is final.  Furthermore, the program received broad support from the public, the opposition, the medical community - and also from the Ministry of Finance. ”

 British Pound also received support from labor data.  While the unemployment rate rose to 5.1% in December, that has met expectations.  On the other hand, wage growth increased by 4.7% (annually) and the number of requests for unemployment benefits decreased by 20,000 in January, also exceeding estimates.

 2️⃣ Notable facts and economic data today, Reserve Bank of New Zealand will announce the interest rate decision and is expected to stand still.  After that, the President of the Reserve Bank of New Zealand Orr will hold a press conference.

 - At tonight, the Governor of the Bank of England Bailey, Deputy Governor Broadbent, Trustees Frieger, and Haskell delivered speeches in the House of Representatives on hopes of economic recovery and policy options.  arouse.

 - tonight, Fed Chairman Powell attended an online hearing held by the US House of Representatives Financial Services Commission to give testimony on the semi-annual monetary report.

 Tonight, Fed Governor Brainard delivered a speech on full responsibility for the Fed.  In the early hours of Thursday morning, Fed Vice Chairman Clarida will also, deliver a speech, investors should pay close attention to the statements of these Fed officials.

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Today's Dax Analysis

Yesterday after falsely breaking the support of 13820, Dax recovered the entire rise and today we have it right at the downtrend line formed in this fall, its overcoming could give new rises at least until the next resistance located at 14025. while that if he does not overcome it well, Dax could go back to yesterday's lows.  Regarding data, there is a testimony of the president of the FED.

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Check out the news of the past 24 hours- 23rd February

  1️⃣ UK announced plans to reopen the economy

 UK Prime Minister Boris Johnson will reveal his plan to get rid of the blockade measures, reopening the UK economy.

 - He is expected to speak on that issue at the Parliament of this country at about 15:30 GMT, before going to Downing Street for an official press conference in the evening.

 - According to leaks from British media revealed that he would loosen the rules for meeting friends and family to compensate for the prolonged blockade affecting economic activities.

 - The plan is supposed to consist of four separate relaxation periods, with a deadline of several weeks between each phase.  According to The Guardian, the roadmap will be:

 - Loosen rules on March 8 for meeting two people in outdoor cafes;

 - Outdoor sports at schools and clubs will be allowed to resume when school is open;

 - Outdoor meeting between 6 people or two families will be allowed from Easter;

 - Sports activities such as tennis and soccer will be allowed from the end of March;

 2️⃣ The EU aims to vaccinate 70% of its adult population by summer

 - EU Economy Minister Paolo Gentiloni said the target to vaccinate 70% of the adult population in the summer is ambitious but achievable, he also commented on some of the economic stimulus measures that  Withdrawing the measures to support the economy too soon will be more dangerous than the delay.

 - However, it should be noted that this word "too early" is quite vague because the disbursement of the EU Recovery Fund will only take place and in the middle of this year - more than a year after the pandemic occurs.

 3️⃣ Notable facts and economic data today

 - tonight, Fed Chairman Powell attended the Senate Banking Committee hearing and delivered testimony on the semi-annual monetary policy report.  Investors should pay attention to the content of Powell's testimony.

23rd Feb

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Checkout the past 24 hours news- Money life research

  1️⃣ Yesterday's main news

 - The Federal Reserve issues money policy reports for the first 2 quarters of the year.

 - Williams called rising US yields a positive sign.

 - The United States officially returned to the Paris Agreement.

 - Biden approved Texas as a "state of great disaster".

 - G7 is committed to continuing to provide fiscal stimulus.

 - Pfizer vaccine does not need refrigeration.

 2️⃣ Notable economic events and data this week

 - This week, Fed Chairman Powell will turn to two hearings in the Senate and the House of Representatives to deliver testimony on the next year's monetary policy report.  Several senior Fed officials, including Fed Vice Chairman Clarida, will also speak.  And European Central Bank President Lagarde will also deliver a speech.

 - The US House of Representatives is scheduled to vote on President Biden's $ 1.9 trillion stimulus plan on Feb. 26. If it can be passed, it will be submitted to the Senate for a vote.  The stimulus may be reduced to a certain extent, but it is expected that it will eventually be adopted.

 - On February 26-27, the finance ministers and central bank governors of the Group of 20 Countries (G20) will hold a video conference, expected to discuss the new pandemic,  possible global economic and collaborative methods.

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Check out the news of the past 24 hours

 1️⃣ BoJ is about to have a big policy change

 - The Bank of Japan (BoJ) may replace some of the directions in buying exchange-traded funds (ETFs) with a commitment to increase buying when the market becomes volatile, three sources familiar with the matter said.

 This move will allow the BOJ to more flexibly slow down buying when the market stabilizes, while reassuring investors that they will act aggressively when shock events cause volatility.

 Although there was no consensus on a final decision, the idea was among the options being made at BOJ before reviewing its policy instruments in March, sources told Reuters  .

 2️⃣ The EU will become tougher

 - The Trade Commissioner said the European Union will become more assertive in trade negotiations and push its international partners to incorporate climate change combat into future agreements.

 - In an interview published in some media about the 27-nation's trade policy review on Thursday, Valdis Dombrovskis said the EU would seek to overhaul its dispute settlement system.  World Trade Organization (WTO) and making sure it sets the rules for digital trade.

 - "In order to protect itself when other parties do not play by the rules, the EU will take tougher and more assertive steps", Dombrovskis was quoted by Politico.  "We will strengthen our tools to protect our rights and values, and protect ourselves from unfair commercial practices."

 - The bloc will also review the due diligence rules to exclude products related to forced labor from the value chain of EU companies and promote the regulatory authorities to protect the EU from action.  forced by third countries.

 3️⃣ Other news

 - US EIA natural gas inventories recorded the strongest drop in two years last week

 - The number of initial unemployment claims in the United States recorded 861,000 last week.

 US Treasury Secretary Yellen: Compared with inflation, the risk of economic injury is greater.

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USD: Fed supplying some room for breathing

 As they struck a cautious tone, the Fed minutes offered some breathing room for risk assets, with the committee seemingly mindful of the potential increase in US inflation in the second quarter and reluctant to overreact until it is sure that inflation will reach 2% for some time. Emerging market FX remains relatively resilient amid the notable increase in US Treasury yields this year. Not only are EM FX valuations not excessively stretched, many EM currencies are benefiting from increasing commodity prices, but this FX segment should continue to display signs of relative resilience as long as the increase in US Treasury yields is followed by improving global economic prospects. Looking forward, if the Fed is able to walk the fine line between improving economic data and communicating it, the consequent orderly increase in treasury yields does not derail the constructive outlook for the coming months for high yielding cyclical EM FX.

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USD: Another possible higher leg, as bonds, can remain fragile

 USD: Another possible higher leg, as bonds, can remain fragile

At the moment, the sell-off in US Treasuries is the key driver of FX, with the dollar eventually seeking help, and not only relative to the normal JPY victim, as commodity currencies are actually hit the hardest. Although reflationary bets are doubling down on the bond market, other assets do not display signs of upbeat risk sentiment. The danger is that the rate of increase in US yields has accumulated in order to begin to be self-defeating and to trigger risk assets to be corrected. In FX, the ideal recipe for a stronger US dollar is indeed the combination of higher US yields and choppy equity results. The announcement of US retail sales for January and the FOMC minutes are the main risk events. As retail sales may be on the strong side and also in the run-up to the FOMC minutes, where investors are likely to factor in some initial debate between members about the timing of unwinding monetary stimulus, the bond market will remain fragile. Therefore, the bar for a hawkish surprise is set very high, and the release of the minutes can alleviate the selling pressure on US Treasuries, likely beginning to re-establish an atmosphere where rising equities are not interfered with by a more regulated increase in yields. The dollar should continue to find some help across the board until then.

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The Main News Yesterday

 1️⃣The main news yesterday

 - Bond yields turned up because of concerns about inflation, USD recovered again

 - Spot gold dropped sharply by 25 USD and hit 1770.

 - US retail sales in January reached the largest increase in 7 months.

 - Minutes of the meeting of the Fed: Will continue to maintain the easing policy.

 - US crude oil output fell by more than 40% due to severe cold weather.

 - Foreign media said that Saudi Arabia will increase production by 1 million barrels/day.

 - The EU and Moderna reach an agreement to supply new vaccines.

 2️⃣ Today's notable facts and data

 - European Central Bank will announce the minutes of the monetary policy meeting Previously, the President of the European Central Bank Lagarde said that the loose monetary policy stance is still an important factor.

 - US will be released on February 13 during the week the initial number of unemployment claims, is expected to be less than the previous value.  In addition, Fed Governor Brainard and Fed official Bostic will deliver speeches later in the evening, and you should be able to pay attention to their statements on the current economic and monetary policy situation.

 - Today, EIA crude inventories will be announced for the week from the US to February 12th. API stocks announced in the morning fell 5.8 million barrels, larger than expected.  ants.  If the EIA inventory also decreased significantly.  is expected to continue to support oil prices.

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Dow Jones, Hang Seng, ASX 200 Outlook

 YIELDS, US DOLLAR, GOLD, INFLATION, ASIA-PACIFIC STOCKS OUTLOOK:

US equity futures edged lower on Wednesday morning after major stock benchmarks closed near record highs overnight. Investors are probably trying to strike a balance between reflation hopes and seemingly overstretched valuations, allowing recent rallies to take a brief pause. The S&P 500 index is trading near 32.3 times price-to-earnings, far above its five-year average of 21.2. Rich multiples may render the index vulnerable to profit-taking should rising yields and a stronger US Dollar trigger a technical pullback.

It is worth noting that the 10-year Treasury yield climbed more than 10bps overnight to 1.321%, the highest level seen in almost a year. Rising yields may exert further downward pressure on precious metal prices because the opportunity cost of holding non-yielding assets becomes higher. For equities, it means that intrinsic value becomes lower when future cash flow streams are discounted back at a higher required rate of return.

Gold prices plunged 1.26% and broke below the US$ 1,800 mark as yield climbed alongside a stronger USD. WTI crude oil prices stayed elevated, however, backed by a cold blast in parts of the US and disruption in crude oil production in Texas.

US 10-Year Treasury Yield vs. Dow Jones

Asia-Pacific equities look set to retreat from Monday’s highs as profit-taking activity kicks in. Futures across Japan, Australia, Hong Kong, Singapore, and India are pointing to a lower start. Mainland Chinese bourses remain shut for the Chinese New Year holiday and will re-open on Thursday. In the currency market, the risk-sensitive Australian and New Zealand Dollars edged lower, suggesting that sentiment is tilted to the bearish side.

Hong Kong’s Hang Seng Index (HSI) advanced 1.9% on Tuesday, breaking through the 30,000 psychological resistance levels with no hesitation. Property and finance sub-sectors were leading, with HSBC (+7.65%) being the single largest contributor to the index’s gain. With the return of mainland investors on Thursday, sectoral rotation may lean towards in favor of technology firms again.

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Today's Bitcoin (BTC) Outlook

Tesla’s $1.5 billion investment in Bitcoin and its plans to begin accepting the popular cryptocurrency as a form of payment, has fostered the anti-fiat asset’s surge higher in recent weeks. Indeed, the digital currency has climbed over 74% for the year and looks set to continue gaining ground on the back of loose monetary policy conditions and the expectation of further financial support out of the US.

Moreover, Bank of New York Mellon’s statement that it would treat BTC the same as any other financial asset and Mastercard’s commitment to integrating Bitcoin into its payment networks, may further validate the cryptocurrency as a mainstream asset and intensify capital inflows in the near term. Here are the key levels to watch for BTC/USD.

The long-term outlook for Bitcoin remains overtly bullish, as price tracks firmly above all six moving averages, and the MACD indicator surges to its highest levels on record.

However, bearish RSI divergence suggests that the relentless surge higher could be running out of steam. With that in mind, failing to gain a firm foothold above 50,000 could trigger a short-term pullback to former resistance-turned-support at the January high (41969).

Breaching opens the door for sellers to drive the cryptocurrency back to psychological support at the 30,000 marks. That being said, an extended pullback seems relatively unlikely given the RSI remains comfortably above 70, and the marked steepening of all six moving averages.

Therefore, a weekly close above 50,000 would likely intensify buying pressure and carve a path for a price to challenge the 261.8% Fibonacci (54866). Clearing that brings the 300% Fibonacci (62402) into the crosshairs.

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How China-ASEAN Relations Impact SGD, IDR, MYR, PHP

 CHINA-ASEAN RELATIONS, SINGAPORE DOLLAR, INDONESIAN RUPIAH, MALAYSIAN RINGGIT, PHILIPPINE PESO – TALKING POINTS

• How do changes in Chinese growth impact ASEAN FX: SGD, IDR, MYR, PHP?
• How did the trade war and coronavirus impact the China-ASEAN relationship?
• How the relationship between China & ASEAN fits into the core-Perimeter model

The Association of Southeast Asian Nations, also known as ASEAN, orbits the world’s second-largest economy – China. The bloc is aimed at helping to promote economic growth in participating countries such as Indonesia, Malaysia, the Philippines, and Singapore. Using the Core-Perimeter model, China functions as the economic powerhouse (core) which ASEAN states strongly rely on as a source of their growth (perimeter).

THE RELATIONSHIP BETWEEN CHINA AND ASEAN (SGD, IDR, MYR, PHP)

On average in 2018, China accounted for one-third of total trade in ASEAN nations, when looking at their top five trading partners. China’s economy has been maturing and gradually shifting away from exports and towards consumption as the primary source of economic growth. This makes the East Asian giant relatively less sensitive to external shocks than its ASEAN neighbors.

This is because those perimeter economies (ASEAN) are more at risk of experiencing external shocks that undermine their growth trajectory than the core (China) due to their cycle-sensitive nature. The latter’s economy has been slowly shifting towards a consumer-based economy, which gives it more insulation to external shocks than outward-facing economies like those in ASEAN.

As Chinese growth began to show signs of stabilization, the prospect of that positive economic reverberation echoing out into its ASEAN neighbors precipitated a rush of capital flowing into the bloc’s assets. Singapore Dollar, Indonesian Rupiah, Malaysian Ringgit, Philippine Peso all rose with other growth-oriented instruments as signs of optimism from the core gave a flicker of hope for an economic recovery in the perimeter.

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DOW JONES & CRUDE OIL PRICE OUTLOOK

DOW JONES & CRUDE OIL FORECAST: WILL A CRUDE BREAKOUT BOOST THE DOW?

The Dow Jones trades at record levels once again after recovering from market turbulence in late January. Not to be outdone, crude oil prices have climbed to their highest levels since January 2020. Encouragingly for the Dow, the recent breakout in the fossil fuel should serve as a tailwind for energy stocks and could translate into greater gains for indices with energy exposure.

That said, the Dow Jones Industrial Average is not what it once was and its exposure to energy has slowly dwindled in recent years. The fall from grace suffered by energy stocks was acutely exemplified when Exxon Mobil (XOM) was removed from the Industrial Average in August 2020 after holding a spot on the index since 1928. XOM shares have outperformed the broader market in the year-to-date, but this outperformance has not been shared with the Dow Jones.

With that in mind, traders searching for exposure to energy stocks in the event crude oil looks to climb higher might find tighter correlations in single stocks or the exchange-traded funds like XLE.

Further still, USD/CAD typically enjoys an inverse correlation with crude oil, meaning if crude prices continue to rise, the pair may fall under pressure. Combined with the reversal in recent USD strength, USD/CAD might serve as a potential proxy for macro traders looking to ride crude oil strength.

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GOLD NEWS HEADLINES- Money Life Research

Gold went down last week because of advances in vaccines stimulating the outlook for a recovery from the coronavirus pandemic. The metal's appeal as a secure haven is diminishing as investors compare this view to the likelihood that further stimulus could weaken the dollar and approach consumer prices.

Gold was steady after the most important two-day gain during a month as investors weighed prospects for more stimulus within the U.S. and therefore the possibility of upper consumer prices against attention on Bitcoin and stocks at a record.

Bullion rose on Monday as Democrats released the primary draft of key legislation which will comprise President Joe Biden’s Covid-19 relief bill. Bets on a strong package are helping to underpin market-derived inflation expectations, which are at multi-year highs, and have fanned the so-called reflation trade.

Gold is rebounding after last week’s get back rock bottom level since the beginning of December when a stronger dollar and rising U.S. Treasury yields weighed on the haven asset that doesn’t offer interest. A report on Wednesday is forecast to point out U.S. consumer prices rising at a quickening pace.

“Gold is rallying from a two-month low as Biden’s massive $1.9 trillion plan is close to becoming a reality,” said Edward Moya, senior analyst at Oanda Corp. “The economic recovery is weak, and prospects are growing that more is going to be done. The reflation trade is occurring tons faster than expected.”

Spot gold was steady at $1,832.68 an oz by 8:25 a.m. in Singapore, after a 2.1%, two-day gain. Silver rose with platinum, while palladium was little changed. The Bloomberg Dollar Spot Index was flat after easing 0.1% Monday.

Meanwhile, traders were also watching a surge in Bitcoin, which hit a record on Monday after Tesla Inc. bought $1.5 billion of the cryptocurrency. The automaker said revised policies also permit it to take a position in gold.

KEY POINTS

The price of gold was way oversold, and this has provided the right catalyst for retracement later last week.

Non-farm payroll data has reaffirmed the necessity for an additional round of stimulus, which can help the gold price to recover.

Important levels: 1,784, 1,814, 1,827, and 1,848.

USD Dollar Update Today's

 

USD: Dollar correlations with other stalling asset groups

The trade-weighted dollar is up from its lows in early January by just over 2 percent. The declining negative correlation of the dollar with stock markets is noticeable and it is difficult to put a finger on what drives this. True, US yields have picked up marginally, but last week's increase in German Bund yields matched that of US Treasuries. And, of course, the US vaccine roll-out looks far more promising than in Europe, while year-to-date returns in the US S&P 500 are just slightly higher than those of the Eurostoxx 50. Here, heavy short dollar positioning is likely to play a major role and would again seem vulnerable if any portion of the employment data for non-farm payrolls were welcomed positively. After the 140k decline in December, Consensus is looking for around a 100k gain. Any upside surprise might see DXY extend its rally at 91.88 to the 100-day moving average, but we still prefer to see this as a rally for the bear market.

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Weekly Overview on Market

  1️⃣ The main news over the weekend

 Democrats pave the way for Biden's $ 1.9 trillion COVID-19 rescue plan.

 - Biden: It can take 10 years to fully restore employment to current rates and needs an emergency relief plan.

 - US Treasury Secretary Yellen: Without strong relief measures, the economic recovery will be long and slow.

 - Lower-than-expected "non-farm" data.  The unemployment rate dropped to a record low for nearly a year.

 The AstraZeneca vaccine has limited effectiveness against the new South African variant of the coronavirus.

 Nigeria, the world's second-largest bitcoin market, bans cryptocurrency trading.

 - Germany plans to expand the blockade.

 - Bank of England Governor Bailey: Expect a boom in consumption after the blockade is lifted.

 2️⃣ Notable facts and data this week

 This week investors should pay attention to the speeches of several central bank officials:

 * On Tuesday, the President of the European Central Bank Lagarde joined the European Parliament's debate over the European Central Bank's 2019 Annual Report.

 * On Wednesday, Lagarde took part in a webinar on news figures organized by The Economist.

 * On Thursday, Fed Chairman Powell delivered a speech at an online event hosted by the Economic Club of New York.

 * From Wednesday to Thursday, the three major organizations EIA, IEA, and OPEC will release their monthly reports, if the report shows that the oil market is optimistic it may boost oil prices further.

Short Term Stock Tips

EUR/USD Outlook Bleak as Traders Rush for US

• Traders have become addicted to the US Dollar as a high US vaccination rate, the prospect of a strong economic recovery, and the likelihood that the Federal Reserve will start to tighten monetary policy soon make it their currency of choice.
• That is bad news for EUR/USD, with the Eurozone seen as lagging behind on vaccinations, an economic recovery is seen as still far away and another interest rate cut still a possibility.
• 
  

EURO PRICE AT RISK OF FURTHER FALLS

Last Thursday’s drop in EUR/USD below 1.20 for the first time since December 1, 2020, was highly significant not just technically but also psychologically. It provided a stark reminder to traders that the Eurozone is lagging far behind the US (and the UK) in vaccinating its citizens against coronavirus and that any economic recovery will therefore likely lag behind too.

In recent months, the US Dollar has become the markets’ favorite safe haven but when the global economic recovery arrives it could well prove to be the leader on the way up too. As mentioned earlier, traders are confident that the currencies of countries that are ahead in vaccinating their citizens against the coronavirus, like the US and the UK, will be the first to recover economically from the slump caused by the pandemic.

That means central banks like the Federal Reserve and the Bank of England will also be the first to begin tightening monetary policy, perhaps while the European Central Bank is still considering a rate cut to boost activity.

This is all bad news for EUR/USD, which is now back to where the ECB would prefer it to be and could conceivably drop to the lows around 1.16 last seen in early November – though not, of course, in the short-term.

WEEK AHEAD: GERMAN INFLATION, TRADE, AND INDUSTRIAL PRODUCTION

Turning to the data in the week ahead, there is little market-moving on the agenda. The highlight could be Wednesday’s final German inflation data for January, expected to show a rise to 1.0% year/year after the previous 0.3% fall. Otherwise, German and Eurozone industrial production and German trade figures are on the calendar too.

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