Forex-novosti i prognoze od 20-01-2021

According to ActionForex, analysts at RBC Financial Group note that the Canadian consumer price growth slowed in December – to 0.7% compared to a year ago versus 1.0% in November. 

"Weak demand for transportation continued to weigh on airfares – which were down 14.5% from a year ago on much weaker-than-normal holiday travel demand. Food price growth also slowed to 1.1% from 1.9% in November. Energy prices were still down 4% from a year ago despite a 2% increase from November levels."

"The Bank of Canada’s preferred ‘core’ CPI measures (which are a better gauge of underlying inflation pressures) also slowed supporting our view that the Bank of Canada will maintain their highly stimulative monetary stance."

The National Association of Homebuilders (NAHB) announced on Wednesday its housing market index (HMI) fell 3 points to 83 in January from 86 in December. This was the lowest reading since September.

Economists had forecast the HMI to stay at 86.

A reading over 50 indicates more builders view conditions as good than poor.

All three HMI components recorded declines this month. The indicator gauging current sales conditions fell 2 points to 92 in January, while the measure charting sales expectations also dropped 2 points to 83 and the component measuring traffic of prospective buyers declined 5 points to 68.

NAHB Chairman Chuck Fowke noted: “Despite robust housing demand and low mortgage rates, buyers are facing a dearth of new homes on the market, which is exacerbating affordability problems. Builders are grappling with supply-side constraints related to lumber and other material costs, a lack of affordable lots and labor shortages that delay delivery times and put upward pressure on home prices. They are also concerned about a changing regulatory environment.”

Meanwhile, NAHB Chief Economist Robert Dietz said: “While housing continues to help lead the economy forward, limited inventory is constraining more robust growth. A shortage of buildable lots is making it difficult to meet strong demand and rising material prices are far outpacing increases in home prices, which in turn is harming housing affordability.”

The Bank of Canada (BoC) maintained its benchmark interest rates unchanged at 0.25 percent on Wednesday, as widely expected.

In its policy statement, the Canadian central bank noted:

• It is maintaining its extraordinary forward guidance, reinforced and supplemented by its QE program, which continues at its current pace of at least CAD4 billion per week;
• Uncertainty is still elevated, and outlook remains highly conditional on the path of the virus and the timeline for the effective rollout of vaccines;
• Arrival of effective vaccines combined with further fiscal and monetary policy support have boosted medium-term outlook for growth;
• BoC projects global growth to average just over 5 percent per year in 2021 and 2022, before slowing to just under 4 percent in 2023;
• Global financial markets and commodity prices have reacted positively to improving economic prospects;
• Broad-based decline in US exchange rate combined with stronger commodity prices have led to further appreciation of Canadian dollar;
• Resurgence of coronavirus cases and reintroduction of lockdown measures are serious setback; growth in Q1 is expected to be negative;
• Q2 rebound is expected to be strong;
• BoC sees decline in real GDP of 5.5 percent in 2020 to be followed by +4 percent in 2021 and almost +5 percent in 2022, and around +2.5 percent in 2023;
• CPI inflation is forecast to rise temporarily to around 2 percent in the first half of the year;
• Inflation is expected to return sustainably to 2 percent target in 2023;
• Governing Council will hold its policy interest rate at effective lower bound until economic slack is absorbed so that 2 percent inflation target is sustainably achieved. In our projection, this does not happen until into 2023;
• To reinforce this commitment and keep interest rates low across yield curve, Bank will continue its QE program until the recovery is well underway;
• As Governing Council gains confidence in strength of recovery, the pace of net purchases of Government of Canada bonds will be adjusted as required;
• We remain committed to providing appropriate degree of monetary policy stimulus to support recovery and achieve inflation objective

The job support plan is reported to be laid out in the March 3 budget.

U.S. stock-index futures rose on Wednesday, as inventors assessed a raft of earnings reports, while awaiting the inauguration of President-elect Joe Biden.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Statistics Canada reported on Wednesday the country’s consumer price index (CPI) fell 0.2 percent m-o-m in December, following a 0.1 percent m-o-m gain in the previous month. This was the first decline since September.

On the y-o-y basis, Canada’s inflation rate increased 0.7 percent last month after advancing 1.0 percent in November.

Economists had predicted inflation would be flat m-o-m and increase 1.0 percent y-o-y in December.

According to the report, consumer price growth slowed on lower air transportation prices (-14.5 y-o-y) and reduced food price growth (+1.1 percent y-o-y).

Meanwhile, the closely watched the Bank of Canada's core index rose 1.5 percent y-o-y in December, the same pace as in November.

GBP rose against most of its major counterparts in the European session on Wednesday, supported by the improvement in investors' risk appetite  as well as the relief the impact of Brexit had not caused the damage some feared. In addition, the Bank of England (BoE) governor Andrew Bailey downplayed the possibility of negative interest rates last week, stating that there were “lots of issues” with cutting rates below zero.

Market participants also received strong inflation data from the UK. The Office for National Statistics (ONS) reported that that the UK's inflation accelerated to 0.6 percent y/y from 0.3 percent y/y in November. The rate was above economists' forecast of 0.5 percent y/y. On m/m basis, consumer prices rose 0.3 percent, following a 0.1 percent drop in November and faster than the expected rate of 0.2 percent.

FXStreet notes that silver maintains a bullish bias as XAG/USD has based at the 24.20 Fibonacci support and strategists at Commerzbank look for it to re-try the topside.

“Silver has sold off and recovered from support at 24.20 last week (61.8% retracement). We suspect that the market has seen an interim base here and should once again recover. This together with the December lows at 23.56 guard the 200-day ma at 22.49.” 

“Recovery off the 24.20/23.56 band should see the market re-try the topside but the recent high at 27.97 and Fibo resistance at 28.12 are a tough barrier to overcome. This is seen as the last defence for the 28.93 and 29.89 peaks from last year.”

USD/JPY sticks to the consolidative mood - UOB

FX Strategists at UOB Group note that USD/JPY is still expected to navigate within the 103.40-104.40 range in the next weeks.

24-hour view: “USD briefly rose to 104.08 yesterday before easing off to trade mostly sideways. Momentum indicators are mostly neutral and USD could continue to trade sideways, likely between 103.70 and 104.15.”

Next 1-3 weeks: “One week ago (13 Jan, spot at 103.75), we indicated that the outlook is mixed and USD ‘could trade between 103.00 and 104.40’. Our view was not wrong as USD traded in a relatively quiet manner for the past week. There is no change in our view even though the low volatility suggests a 103.40/104.40 range is likely enough to contain the price actions from here.”

Procter & Gamble (PG) reported Q2 FY 2021 earnings of $1.64 per share (versus $1.42 per share in Q2 FY 2020), beating analysts’ consensus estimate of $1.51 per share.

The company’s quarterly revenues amounted to $19.745 bln (+8.3% y/y), beating analysts’ consensus estimate of $19.228 bln.

The company also issued upside guidance for FY2021, projecting EPS of +8-10% y/y to ~ $5.53-5.63 versus analysts’ consensus estimate of $5.59 (up from prior guidance of +5-8%) and revenues of +5-6% y/y to ~$74.50-75.21 bln versus analysts’ consensus estimate of $74.61 bln (up from prior guidance of +3-4%).

PG rose to $136.48 (+2.16%) in pre-market trading.

U.S. weekly mortgage applications drop 1.9 percent

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. fell 1.9 percent in the week ended January 15, following a 16.7 percent surged in the previous week.

According to the report, refinance applications declined 4.7 percent, while applications to purchase a home increased 2.7 percent.

Meanwhile, the average fixed 30-year mortgage rate rose from 2.88 percent to 2.92 percent.

“Market expectations of a larger than anticipated fiscal relief package, which is expected to further boost economic growth and lower unemployment, have driven Treasury yields higher the last two weeks,” noted Joel Kan, MBA’s associate vice president of economic and industry forecasting. “After a post-holiday surge of refinances, higher rates chipped away at refinance demand.”

EUR/USD to prolong the corrective phase while below 1.2231 - Credit Suisse

FXStreet reports that the Credit Suisse analyst team notes that EUR/USD has recovered strongly after holding as expected the 38.2% retracement of its November/January rally and 55-day average at 1.2065/54, but with a break above 1.2223/31 needed to confirm the correction is over and the core uptrend resumed.

“EUR/USD has recovered as expected after falling to test and hold our first downside objective at 1.2067/54 – the December low, 38.2% retracement of the November/January rally and rising 55-day average. Strength though has been capped at the 13-day average, currently at 1.2167 and with a small ‘head & shoulders’ top still in place there remains the risk for further corrective weakness yet before the broader uptrend resumes.” 

“Support moves to 1.2102/00 initially, then 1.2085. Below 1.2054 on a closing basis can see support next at the September high at 1.2011 ahead of the 23.6% retracement of the entire 2020/2021 uptrend at 1.1945.” 

“Above 1.2167 can see strength extend further to 1.2179/80, then 1.2223/31, but with this needing to be cleared to negate the top to suggest the corrective setback is coming to an end for a move back to the 1.2350/55 highs.”

UnitedHealth (UNH) reported Q4 FY 2020 earnings of $2.52 per share (versus $3.90 per share in Q4 FY 2019), beating analysts’ consensus estimate of $2.39 per share.

The company’s quarterly revenues amounted to $65.467 bln (+7.5% y/y), roughly in line with analysts’ consensus estimate of $64.979 bln.

The company also reaffirmed its guidance for FY21, projecting EPS of $17.75-18.25 versus analysts’ consensus estimate of $18.19.

UNH fell to $352.00 (-0.05%) in pre-market trading.

FXStreet reports that Ho Woei Chen, CFA, an economist at UOB Group, assesses the latest GDP figures in the Chinese economy.

“China’s GDP growth accelerated further to 6.5% y/y in 4Q20 from 4.9% y/y in 3Q20, above Bloomberg’s consensus poll and our forecast of 6.2%. The economy has fully recovered from the coronavirus pandemic with the pace of GDP rising above the level in the same quarter a year ago. The growth rates of the secondary and primary industries were above their pre-pandemic levels while tertiary industry growth has also returned to trend in 4Q20. On the seasonally-adjusted basis, GDP rebounded by 2.6% q/q from 3.0% in 3Q20 as the recovery momentum continued to be sustained."

“China’s full-year 2020 GDP growth came in at 2.3%, standing out as one of the few economies with positive growth amidst the pandemic. We have raised our forecast for 2021 GDP growth to 8.5% from the previous 8.2% in anticipation of stronger pent-up demand as vaccination programs worldwide get underway. This will also underpin a stronger recovery in the domestic private consumption this year."

Netflix (NFLX) reported Q4 FY 2020 earnings of $1.19 per share (versus $1.30 per share in Q4 FY 2019), missing analysts’ consensus estimate of $1.41 per share.

The company’s quarterly revenues amounted to $6.644 bln (+21.5% y/y), roughly in line with analysts’ consensus estimate of $6.624 bln.

Netflix also reported global streaming paid net adds in Q4 FY2020 of +8.51 mln versus its prior guidance of +6.00 mln and versus +2.20 mln in Q3 FY2021.

The company issued upside guidance for Q1 FY2021, projecting EPS of approx. $2.97 versus analysts’ consensus estimate of $2.15 and revenues of approx. $7.129 bln versus analysts’ consensus estimate of $7.03 bln. It also guided Q1 global streaming net adds of +6.00 mln.

NFLX rose to $569.46 (+13.49%) in pre-market trading.

FXStreet reports that according to the Credit Suisse analyst team, EUR/JPY has recovered strongly after holding as expected the “neckline” to its “head & shoulders” base and 55-day average at 125.37/11 and above 126.54 should confirm the corrective setback is over.

“EUR/JPY has seen its expected recovery from the ‘neckline’ to the existing large ‘head & shoulders’ base and rising 55 -day average, seen starting at 125.37 and stretching down to 125.11, but with strength from here also capped as looked for at the ‘neckline’ to the top and price resistance at 126.22/54.” 

“Above 126.22/54 remains needed to suggest the worst of the setback has been seen, clearing the way for a resumption of the core uptrend for strength back to retest 127.51/52 and eventually our 128.67/70 main objective.” 

eFXdata reports that Danske Research discusses EUR/USD outlook.

"We view fair value for EUR/USD to be a 1.08-1.20 range, depending on the model employed. Either way, at current levels, valuation is neutral. US assets’ trend performance continues to be strong relative to European counterparts and the COVID19 pandemic has fast-forwarded the adoption of technology, favouring flows into the US. EUR/USD thus faces structural decline due to a lack of competitiveness. In our view, a lower EUR/USD could come from rising US real rates, fading EU optimism and/or falling equities," Danske adds.

FXStreet reports that economists at MUFG Bank discusses EUR/USD prospects.

“We are more inclined to view the price action as a temporary correction lower rather than the start of a more sustained reversal. It also fits with the usual seasonal pattern for EUR/USD performance. The US dollar tends to underperform in December and then rebounds in January. We expect the pair to begin to consolidate at higher levels in the month ahead.”

“The main trigger for the short-term correction lower for EUR/USD has been a shift in US fiscal policy expectations. The incoming Biden administration is now expected to deliver a bigger stimulus having won a narrow majority in the Senate. The Fed has moved quickly though to dampen expectations for a faster pace of QE tapering in response to looser fiscal policy. The Fed’s commitment to maintain loose policy should prevent a more sustainable rebound for the US dollar at the current juncture.”

According to the report from the Eurostat, in December 2020, the euro area annual inflation was -0.3% for the fourth consecutive month. A year earlier, the rate was 1.3%. Core figures rose by 0.2% versus +0.2% previous and +0.2% expectations.

European Union annual inflation was 0.3% in December 2020, up from 0.2% in November. A year earlier, the rate was 1.6%. 

The lowest annual rates were registered in Greece (-2.4%), Slovenia (-1.2%) and Ireland (-1.0%). The highest annual rates were recorded in Poland (3.4%), Hungary (2.8%) and Czechia (2.4%). Compared with November, annual inflation fell in nine Member States, remained stable in eight and rose in ten.

In December, the highest contribution to the annual euro area inflation rate came from services (+0.30 percentage points, pp), followed by food, alcohol & tobacco (+0.25 pp), non-energy industrial goods (-0.14 pp) and energy (-0.68 pp).

FXStreet reports that FX Strategists at UOB Group still believe USD/CNH could edge higher in the next weeks.

Next 1-3 weeks: “We highlighted on Monday that ‘upward momentum is beginning to improve and a clear break of 6.4900 could lead to a move to 6.5200’. While USD subsequently broke 6.4900, it retreated quickly after touching 6.5075. Upward momentum has been dented somewhat but there is still chance for USD to move 6.5200. Only a break of 6.4450 (no change in ‘strong support’ level) would indicate that USD is not ready to move to 6.5200 just yet.”

Bloomberg reports that the ECB is emulating its Asia-Pacific peers by controlling government borrowing costs, just in a uniquely European way.

The ECB is buying bonds to limit the differences between yields for the strongest and weakest economies in the euro zone, according to officials familiar with the matter, with one person saying the central bank has specific ideas on what spreads are appropriate.

Investors have long wondered whether the central bank has specific levels in mind when it tries to cap bond yields. The latest insight into its strategy sheds light on how policy makers are navigating euro-area complexities that make publicly targeting bond levels difficult.

Sovereign yields are key to fighting the pandemic crisis. Not only do they influence all other loan costs, but keeping government borrowing affordable has become a critical part of monetary policy as companies and workers rely on massive, debt-financed fiscal support.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, discusses AUDUSD's prospects.

“AUD/USD has recently eroded its 20-day ma at 0.7687, but no close below here has been seen. We suspect that near-term rallies will struggle around 0.7750.53, which will leave it vulnerable to deeper losses to the 0.7463 December 21 low and also the 0.7413 September high and the 0.7340 November 9 high.”

“Above 0.7836 (2016 high) we have resistance at 0.7925 and there is scope for this to be reached, however, we suspect that this will then hold the initial test.”

CNBC reports that the oil cartel’s Secretary General Mohammed Barkindo told that oil-producing group OPEC will continue to strengthen its relationship with the U.S. energy industry under Joe Biden’s new administration.

Barkindo congratulated Biden for his upcoming inauguration during a virtual panel hosted by the Atlantic Council Global Energy Forum, and said: “We continue to deepen this relationship, which we found mutually beneficial to all of us.”

“And we intend to continue along this fashion going forward and the administration of President Biden,” he told CNBC.

OPEC leaders were known to have at times communicated with outgoing President Donald Trump, who was particularly vocal and active about the oil markets and what he believed oil-producing countries should do to alter crude prices.

Asked if he had been in touch with Biden yet, Barkindo replied: “No, not at all.”

“We believe that we have established very mutually beneficial productive relationships with the industry in the United States. And I think we have no option but to continue to strengthen this relationship under President Biden,” he added.

During today's Asian trading, the US dollar fell against the world's major currencies.

Investors are assessing the latest comments from Janet Yellen, the former chairman of the Federal reserve system (Fed), nominated by US President-elect Joe Biden for the post of Treasury Secretary. In a speech at a Senate Finance Committee hearing on Tuesday, Yellen called on lawmakers to "act on a large scale" to avert a prolonged economic downturn, and brushed aside concerns about the growing volume of the US national debt.

At the same time, Yellen confirmed her commitment to market-based exchange rate formation and made it clear that the US does not seek a weaker national currency to gain competitive advantages. She called the attempts of some countries to artificially manipulate their currency unacceptable.

On Wednesday, Biden will be inaugurated. Last week, Biden proposed a new package of stimulus measures, including, in particular, another round of direct payments to Americans, an increase in additional payments to unemployment benefits and an extension of this program for a longer period.

Meanwhile, the People's Bank of China (PBOC) kept its benchmark loan interest rate (LPR) unchanged for the ninth straight month as the economy continues to recover from the COVID-19 pandemic crisis. The annual LPR remained at the level of 3.85% per annum. The last time this rate was lowered was in April 2020. The rate on five-year loans was kept at 4.65%, the NBK said. Experts also did not expect a change in rates.

The ICE U.S. Dollar index, which shows the value of the U.S. dollar against six major world currencies, fell 0.23%.

FXStreet reports that UOB Group’s FX Strategists see EUR/USD grinding lower to 1.2010 if 1.2080 is cleared in the near-term.

Next 1-3 weeks: “We highlighted on Monday that EUR is likely to weaken further and ‘the next level to focus on is at 1.2010’. EUR subsequently dropped to 1.2052 before staging a strong rebound yesterday (high of 1.2144). Shorter-term momentum has improved a tad and a break of 1.2170 (no change in ‘strong resistance’ level) would indicate that EUR is not ready to move to 1.2010 just yet. In order to rejuvenate the flagging downward momentum, EUR has to move and stay below 1.2080 within these 1 to 2 days or the odds for a move lower to 1.2010 would diminish quickly.”

eFXdata reports that Credit Agricole CIB Research adopts a cautious bias on GBP.

"We are sceptical that the GBP could struggle to extend its recent gains on a sustained basis. A more cautious view is further warranted ahead of this week’s retail sales and PMI data as well as speeches by a number of BoE policymakers. In particular, the data releases could determine whether the BoE will need to cut rates at its February meeting or not. The January PMI data in particular could show the economic strains from the fresh lockdown measures introduced last week. All in all, we expect data disappointments this week to weigh on the GBP once again," CACIB adds.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2241 (887)

$1.2212 (255)

$1.2189 (594)

Price at time of writing this review: $1.2154

Support levels (open interest**, contracts):

$1.2100 (2259)

$1.2079 (1188)

$1.2052 (1106)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 5 is 47350 contracts (according to data from January, 19) with the maximum number of contracts with strike price $1,2000 (3226);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3795 (1680)

$1.3763 (1564)

$1.3711 (1127)

Price at time of writing this review: $1.3662

Support levels (open interest**, contracts):

$1.3525 (778)

$1.3459 (1689)

$1.3378 (1536)

Comments:

- Overall open interest on the CALL options with the expiration date February, 5 is 11551 contracts, with the maximum number of contracts with strike price $1,4000 (1724);

- Overall open interest on the PUT options with the expiration date February, 5 is 19462 contracts, with the maximum number of contracts with strike price $1,2500 (2183);

- The ratio of PUT/CALL was 1.68 versus 1.77 from the previous trading day according to data from January, 19

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

According to the report from the Federal Statistical Office (Destatis), in December 2020, the index of producer prices for industrial products increased by 0.2% compared with the corresponding month of the preceding year. In November the annual rate of change all over had been –0.5%. Compared with the preceding month November the overall index increased by 0.8% in December 2020 (+0.2% in November).

Prices of intermediate goods increased by 0.8% compared to December 2019. Prices increased especially regarding precious metals (+18.4%), metallic secondary raw material (+17.0%) and copper (+11.5%). Prices of durable consumer goods increased by 1.6% compared to December 2019, capital goods by 0.9%.

Energy prices as a whole decreased by 0.1% compared to December 2019 but increased by 2.3% compared to November 2020. On an annual basis, prices of petroleum products were down 13.5% and prices of natural gas (distribution) decreased by 3.3%. By contrast electricity prices increased by 5.9%.

The overall index disregarding energy was 0.3% up on December 2019.

According to the report from Office for National Statistics, the Consumer Prices Index (CPI) 12-month rate was 0.6% in December 2020, up from 0.3% in November. Economists had expected a 0.5% increase. On a monthly basis, CPI grew by 0.3% in December 2020, following a 0.1% fall in November. Economists had expected a 0.2% increase.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 0.8% in December 2020, up from 0.6% in November.

The largest contribution to the CPIH 12-month inflation rate came from recreation and culture (0.35 percentage points).

Rising transport costs contributed 0.11 percentage points to the monthly change, while increasing prices for clothing, and recreation and culture items both contributed 0.10 percentage points to help increase inflation; these were partially offset by a downward contribution from falling food and non-alcoholic beverage prices.

On a monthly basis, the CPIH grew by 0.2% in December 2020, following a 0.1% fall in November.

As a result of restrictions caused by the coronavirus (COVID-19) pandemic easing in some areas in December 2020, the number of CPIH items identified as unavailable was nine, accounting for 2.0% of the basket by weight; this number had decreased from 72 in November; for the December collection (which took place on or around 15 December 2020), we collected a weighted total of 81.5% of comparable coverage collected before the first lockdown (excluding unavailable items).