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25
Jan

Ifo Survey, Chicago Fed National Activity Index

calendar 25/01/2021 - 11:17 UTC

The weak performance of the dollar, allowed also emerging market pairs like the USD/INR pushed lower, reaching the lowest level since June 2020. Meanwhile the USD/RUB pair jumped higher on Friday trading again above 75.

Major cryptos were moving higher by Monday, with one Ethereum token again worth more than $1,400 and Bitcoin also moving higher after the consolidation at the end of the previous week.

Sentiment in the equity markets was mixed by Monday morning, with US indices pushing higher, given hopes that the new administration in the US is pushing forward with another $1.9 trillion stimulus deal. The US Tech 100 index even reached yet another all-time high, while the Volatility Index VIX continued on a slow decline. Meanwhile the performance in other markets was not all positive with the Spain 35 index continuing to move lower, declining by four per cent over the past two weeks despite the otherwise positive market developments in other regions.

On Monday German Ifo survey data on business expectations will be released. Also on Monday a few speeches from central bankers, including ECB President Lagarde and German Bundesbank Weidmann can be expected.

EUR/USD

The weak performance of the dollar allowed the EUR/USD pair to rise as high as 1.219. The expectations that the new US President might push more stimulus legislation forwards might also affect the markets in the near term.

While service PMI data took a hit, manufacturing sentiment was relatively unaffected and the French manufacturing PMI even improved from 51.1 in the previous reading, up to 51.5. Still, the composite PMI for the EU was down as overall anticipated from 49.1 to 47.5.

For Tuesday US data on the housing market, consumer and manufacturing confidence can be expected.

EUR/USD

Gold

Despite the weakness of the dollar, gold was down on Friday and extended its move lower by Monday morning. Other precious metals like silver and platinum also retraced lower towards the end of the week.

Weekly Commitment of Traders (COT) statistics published by the US CFTC indicated an almost unchanged number of speculative net positions in gold futures in the market at 246.6 thousand.

Given the expectations that governments might be forced to expand their already wide-reaching stimulus measures in place is said to be driving the demand for physical gold. However, the sentiment in other gold markets without physical settlement appears to be mixed and as official inflation figures continue showing rather restrained inflation data, it remains to be seen what impact the policy actions will have over the near term.

Gold

WTI Oil

Oil prices closes with a sizable downside on Friday and thus erasing practically all gains of the day. Weekly EIA data indicated a sizable increase in crude oil stockpiles by 4.35 million barrels. US Baker Hughes Oil Rig Count data indicated meanwhile again a small uptick in the number of operating oil rigs as the count rose from 287 in the previous week, up to 289.

On Tuesday the American Petroleum Institute (API) publishes its weekly statistical bulletin, which includes data on inventory changes on stockpiles and on Wednesday the Energy Information Administration (EIA) releases its weekly report on crude oil, gasoline and distillate inventory changes.

WTI Oil

US 500

After a strong dip in the equity markets on Friday morning, indices like the US 500 recovered most of these losses by the end of the trading session. By Monday morning the sentiment was again positive, with some indices like the US Tech 100 even reaching yet another all-time high.

One of the weaker performing sectors was the chip sector (US Semiconductors ETF -1.78%) especially given the weak performance of Intel (-9.15%). Intel stocks spiked the week before given the announcement that the company’s CEO would be leaving the company. However, the announcement by the new leadership team that the company would “stay the course” and did not announce drastic changes might have come as a disappointment to inventors. Over the past years Intel has been losing its edge against its key competitor in the CPU business AMD, which benefitted from smaller scale technology, while Intel, which relies on its own production facilities faced significant issues in that direction.

Another established tech company closing with a strong downside was IBM (-10.04%) after quarterly results presented were quite disappointing to inventors. Especially the weak growth of its revenue from the cloud business compared to some of its key competitors like Amazon was of concern to the markets.

More earnings will be released in the coming days, including data on Microsoft, Verizon and Texas Instruments on Tuesday.

US 500

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