Forex-novosti i prognoze od 28-01-2021

According to ActionForex, analysts at TD Bank Financial Group note that the U.S. real GDP grew 4.0% (annualized) in the fourth quarter, in line with consensus expectations, and the rebound over the second half of the year from the worst of the pandemic shutdowns in the spring has left economic activity 2.5% below its year-ago level.

"Consumer spending grew 2.5% (annualized) in the fourth quarter. Growth was driven by a 4% gain in services spending, led by health care. Spending at food services and accommodation and transportation services both fell on the quarter. Spending on goods fell 0.4%, led by a 0.7% decline in nondurable goods, which was primarily food and beverages."

"Non-residential fixed investment posted a solid 13.8% gain. Spending on equipment once again led the way, rising 24.9% in Q4. Equipment is another area where spending is above its year-ago levels, up 3.4%."

"Residential investment surged 33.5% in Q4, reflecting investment in new single-family housing. Even more impressive than durable goods spending gains, residential investment is now up 13.7% versus a year ago."

"International trade continued to recover. Imports jumped 29.5% and exports rose 22%."

"The only major component of GDP to fall in the fourth quarter was government spending, which declined 1.2%. Spending at state and local levels fell (-1.7%) for the third straight quarter. Federal spending was down a more modest 0.5%."

"Overall for 2020, the economy contracted at an annual average rate of 3.5%, the worst performance since 1946. However, this masks a story of steep decline and almost-as-steep recovery. After shrinking by 10.1% in the first half (non-annualized) and rebounding by 8.5% in the second, real GDP ended the year 2.5% smaller than it was pre-crisis."

"The loss of momentum at the end of 2020 is going to hamper growth in the first quarter, which we expect to be more modest than the fourth. That said, it is likely to build through the quarter, as vaccinations ramp up and income supports turn into spending."

The Conference Board announced on Thursday its Leading Economic Index (LEI) for the U.S. rose 0.3 percent m-o-m in December to 109.5 (2016 = 100), following a revised 0.7 percent m-o-m gain in November (originally a 0.6 percent m-o-m advance).

Economists had forecast an increase of 0.3 percent m-o-m.

“The US LEI’s slowing pace of increase in December suggests that US economic growth continues to moderate in the first quarter of 2021. Improvements in the US LEI were very broad-based among the leading indicators, except for rising initial claims for unemployment insurance and a mixed consumer outlook on business and economic conditions,” noted Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “While the resurgence of COVID-19 and weak labor markets remain barriers to growth, The Conference Board expects the economy to expand by at least 2.0 percent (annual rate) in Q1 and then gain momentum throughout the year.”

The report also revealed the Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.3 percent m-o-m in December to 103.3, following a 0.1 percent m-o-m uptick in November. Meanwhile, its Lagging Economic Index (LAG) for the U.S. edged up 0.1 percent m-o-m in December to 107.6, the same pace as in November. 

The U.S. Commerce Department announced on Thursday that the sales of new single-family homes rose 1.6 percent m-o-m to a seasonally adjusted annual rate of 842,000 units in December.

Economists had forecast the sales pace of 865,000 last month.

November’s sales pace was revised down to 829,000 units from the originally reported 841,000 units.

According to the report, new home sales in the South, the largest area, declined 5.1 percent m-o-m in December. Meanwhile, sales in the Midwest surged 30.6 percent m-o-m and those in the West rose 8.8 percent m-o-m. In the Northeast, new home sales decreased 6.1 percent m-o-m in December.

In y-o-y terms, new home sales were up 15.2 percent in December.

Over the whole 2020, 811,000 new homes were sold, up 18.8 percent from 2019.

Statistics Canada announced on Thursday that the value of building permits issued by the Canadian municipalities fell 4.1 percent m-o-m in December, following a revised 12.5 percent m-o-m jump in November (originally a surge of 12.9 percent m-o-m).

Economists had forecast a 5.0 percent decrease in December from the previous month.

According to the report, the value of residential permits fell 0.9 percent m-o-m in December, as permits for multi-family dwellings plunged 7.2 percent m-o-m, while single-family permits climbed 7.0 percent m-o-m.

At the same time, the value of non-residential building permits plunged 10.8 percent m-o-m in December, due to declines in institutional (-24.4 percent m-o-m), commercial (-9.0 percent m-o-m) and industrial (-6.1 percent m-o-m) permits.

In y-o-y terms, building permits rose 1.7 percent in December.

Despite a rebound in the second half of 2020, the total value of building permits dropped 2.3 percent over the year. This was the largest annual decrease since the recession in 2009.

U.S. stock-index futures traded mixed on Thursday, as investors assessed preliminary U.S. Q4 GDP data and the latest batch of earnings reports from U.S. companies, including the tech giants Apple (AAPL), Tesla (TSLA) and Facebook (FB).

Global Stocks:

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

DuPont (DD) downgraded to Neutral from Outperform at Exane BNP Paribas; target $83

Tesla (TSLA) downgraded to Mkt Perform from Mkt Outperform at JMP Securities

American Express (AXP) upgraded to Buy from Hold at DZ Bank; target $130

Twitter (TWTR) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; target $65

The Commerce Department released on Thursday its "advance" estimate for the U.S. gross domestic product (GDP) for the fourth quarter of 2020, which revealed the U.S. economy grew in line with economists’ forecast in the reviewed period.

According to the estimate, the U.S. real GDP rose at an annual rate of 4.0 percent q-o-q last quarter, following a record growth of 33.4 percent q-o-q in the third quarter, reflecting both the continued economic recovery from the steep declines earlier in the year and the ongoing impact of the COVID-19 pandemic, including new restrictions and closures that took effect in some areas of the United States.

Economists had expected GDP to expand by 4.0 percent.

According to the report, the advance in real GDP in the fourth quarter reflected gains in exports, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, and private inventory investment, which, however, were partly offset by drops in state and local government spending and federal government spending. Meanwhile, imports, which are a subtraction in the calculation of GDP, rose.

The data from the Labor Department revealed on Thursday the number of applications for unemployment fell more than expected last week, but remained elevated. 

According to the report, the initial claims for unemployment benefits decreased by 67,000 to 847,000 for the week ended January 23. Still, claims remained well above pre-pandemic levels.

Economists had expected 875,000 new claims last week.

Claims for the prior week were revised upwardly to 914,000 from the initial estimate of 900,000.

Meanwhile, the four-week moving average of rose grew to 868,000 from an upwardly revised 851,750 in the previous week.

Continuing claims fell to 4,771,000 from a downwardly revised 4,974,000 in the previous week.

USD rose against its major rivals in the European session on Thursday as investors' risk sentiment remained dented by concerns about global vaccine rollout and vaccine-fueled economic recovery.

The latest reports about vaccine development showed that the authorities of the developed economies grapple with a slower-than-expected vaccine rollout due to supply shortages. They demanded from the vaccine maker to get all the COVID-19 vaccines they had ordered and paid for. Earlier this week, the European Commission proposed to create a register of vaccine exports in order to monitor where doses are being sent. This raised worries over possible “vaccine protectionism”.

At a post rate decision press conference on Wednesday, the Federal Reserve Chairman Jerome Powell provided a cautious outlook for the U.S. economy, underscoring the challenges faced in vaccine distribution and job creation for the Biden Administration. "The economy is a long way from our employment and inflation goals," Powell said, "and it is likely to take some time for substantial further progress to be achieved." Meanwhile, the European Central Bank's (ECB) chief economist Lane said that he expected the EU's economy to recover to pre-pandemic levels by the end of the summer of 2022.

FXStreet reports that according to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, occasional rallies in EUR/CHF are seen struggling just above the 1.0800-hurdle.

“EUR/CHF came under pressure yesterday and attention has reverted to the 200-day ma at 1.0736. Intraday rallies are likely to struggle 1.0806 (55-day ma) and failure here will leave the market vulnerable on the downside.”

“Below the market lies the late July, August and September lows at 1.0727/12. Below here sits the November trough at 1.0630.”

McDonald's (MCD) reported Q4 FY 2020 earnings of $1.70 per share (versus $1.97 per share in Q4 FY 2019), missing analysts’ consensus estimate of $1.77 per share.

The company’s quarterly revenues amounted to $5.314 bln (-2.1% y/y), roughly in line with analysts’ consensus estimate of $5.350 bln.

MCD fell to $205.80 (-0.58%) in pre-market trading.

FXStreet reports that strategists at TD Securities (TDS) offered a brief preview of Thursday key U.S. macro data – the advance GDP report for the fourth quarter. It will be accompanied by the release of initial weekly jobless claims.

“Real GDP appears to have slowed, potentially to the point of contraction as the quarter ended, but it was likely up moderately at least in Q4 as a whole. Our 3% q/q AR estimate is down from 33.4% in Q3, and below consensus at 4.2%. Most components likely slowed; we estimate a 2.5% pace for real consumption, down from 41.0% in Q3. Our Q4 forecast for real GDP implies a net decline of 2.7% from the cyclical peak in Q4 of 2019, an improvement from -3.4% in Q3 and -10.1% in Q2."

"In addition, we expect claims to remain elevated at 860k for the week of 23 Jan (consensus: 875k). The weekly claims data can be especially volatile near year-end, reflecting big seasonal swings. That cautions against reading much into individual weekly readings, but the trend appears to have moved up since November. At 848k, the four-week average is up from 741k at the end of November.”

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank suggests that AUD/USD could now face some downside pressure.

“AUD/USD’s symmetrical triangle broke downwards, this implies that the market has topped for now and we should see a correction lower take hold. It is now vulnerable to deeper losses to the .7463 December 21 low and also the .7413 September high and the .7340 November 9 high. The 2020-2021 support line lies at .7530.”

Dow (DOW) reported Q4 FY 2020 earnings of $0.81 per share (versus $0.78 per share in Q4 FY 2019), beating analysts’ consensus estimate of $0.67 per share.

The company’s quarterly revenues amounted to $10.706 bln (+4.9% y/y), beating analysts’ consensus estimate of $10.071 bln.

DOW rose to $54.49 (+0.18%) in pre-market trading.

Facebook (FB) reported Q4 FY 2020 earnings of $3.88 per share (versus $2.56 per share in Q4 FY 2019), beating analysts’ consensus estimate of $3.24 per share.

The company’s quarterly revenues amounted to $28.100 bln (+33.2% y/y), beating analysts’ consensus estimate of $26.434 bln.

FB fell to $271.00 (-0.42%) in pre-market trading.

FXStreet reports that economist at UOB Group Lee Sue Ann reviews the latest inflation figures in the Australian economy.

“Australia’s headline CPI came in at 0.9% q/q for 4Q20, higher than the estimate of 0.7% q/q, following the 1.6% q/q reading in the third quarter.”

“Compared to the same period a year ago, CPI advanced 0.9% y/y, up from the 0.7% y/y reading in the previous three months. The increase in annual inflation largely reflects the unwinding of free child care and higher petrol prices, and contributed to the reversal of the June quarter fall of 0.3% y/y. These impacts are largely removed from measures of underlying inflation, with the trimmed mean measure remaining at a record-low of 1.2% y/y (0.4% q/q).”

Tesla (TSLA) reported Q4 FY 2020 earnings of $0.80 per share, missing analysts’ consensus estimate of $1.03 per share.

The company’s quarterly revenues amounted to $10.700 bln (+44.9% y/y), beating analysts’ consensus estimate of $10.384 bln.

The company also said that over a multi-year horizon it expects to achieve 50% average annual growth in vehicle deliveries. In some years, Tesla’s deliveries may grow faster, which it expects to be the case in 2021.

TSLA fell to $822.41 (-4.83%) in pre-market trading.

Apple (AAPL) reported Q1 FY 2021 earnings of $1.68 per share, beating analysts’ consensus estimate of $1.41 per share.

The company’s quarterly revenues amounted to $111.400 bln (+21.4% y/y), beating analysts’ consensus estimate of $103.242 bln.

Q1 FY 2021 better-than-expected results were driven by beat in every category except Macs (Macs revenue amounted to $8.7 bln in the reviewed period, missing analysts’ consensus estimate of $8.8 bln).

The company did not give Q2 FY 2021 guidance.

AAPL fell to $138.99 (-2.16%) in pre-market trading.

FXStreet reports that analysts at TD Securities (TDS) suggest that Germany’s inflation is to turn positive this month.

“We look for German inflation to pick up to 0.6% y/y in January, returning to positive territory for the first time since before the VAT cut in July.”

“There is a huge amount of uncertainty around the number though, as it's always impossible to tell how much of a change in VAT rates ends up getting passed through to consumers.”

FXStreet reports that FX Strategists at UOB Group discuss the prospects of USD/CNH.

Next 1-3 weeks: “About 2 weeks ago, we indicated that ‘a clear break of 6.4900 could lead to a move to 6.5200’. While USD subsequently rose to 6.5075, it was unable to make any further headway on the upside. In our latest narrative from Tuesday (26 Jan, spot at 6.4870), we highlighted that ‘momentum has deteriorated further but only a break of 6.4450 would indicate that USD is not ready to move higher to 6.5200’. In that context, we did not anticipate the strong overnight surge in USD. From here, 6.5200 appears to be within reach and a break of this level would suggest further USD strength towards 6.5360. On the downside, the ‘strong support’ level has moved higher to 6.4650 from 6.4450.”

Bloomberg reports that according to the World Gold Council, global gold demand is set to recover this year, after slumping to the lowest in more than a decade in 2020.

WGC said that with bullion prices climbing to an all-time high and pandemic lockdowns stifling consumption, demand for gold jewelry fell to the lowest on record last year. That decline was led by the key Indian and Chinese markets, which experienced historically weak sales.

Now China’s economic recovery is supporting a rebound in demand, said Louise Street, the WGC’s senior markets analyst.

The outlook partly depends on investment demand, which surged to a record last year as inflows into exchange-traded funds more than doubled.

According to the report from European Commission, in January 2021, the Economic Sentiment Indicator (ESI) edged down in both the euro area (-0.9 points to 91.5) and the EU (-0.6 points to 91.2) on a monthly basis. The Employment Expectations Indicator (EEI) also decreased (-1.6 points to 88.8 in the euro area and -1.3 points to 90.0 in the EU).

In the euro area, the ESI’s decrease in January was driven by sliding confidence in retail trade and smaller losses in services and consumer confidence. Confidence in industry improved, while it remained broadly unchanged in construction. Amongst the largest euro-area economies, the ESI dropped in France (-2.6) and Germany (-2.3), while it improved in Spain (+2.4), the Netherlands (+0.6) and Italy (+0.4).

Industry confidence firmed (+0.9), as managers’ assessments of the current level of overall order books improved for the seventh month in a row. Services confidence weakened further compared to December (-0.7), due to worsened assessments of the past business situation and, to a lesser extent, past and expected demand. The decline in consumer confidence (-1.7) reflected a deterioration in all its four components, i.e. households’ assessments of their past and future financial conditions, their intentions to make major purchases and especially their expectations about the general economic situation. The slide in retail trade confidence (-6.0) was fuelled by managers’ assessments of the past business situation and the adequacy of the volume of stocks, both of which deteriorated to an extent not seen since the first wave of the COVID-19 pandemic in spring 2020. Construction confidence remained broadly unchanged (+0.3), as managers’ improved appraisals of the level of order books were counterbalanced by more muted employment expectations. 

According to the report from Istat, in January 2021, the consumer confidence slackened from 101.1 to 100.7. With regard to its components, the economic climate remained virtually stable, sliping from 83.5 to 83.4, the personal climate and the future one shrunk from 107.0 to 106.5 and from 105.3 to 103.2 respectively, while the current one bettered, passing from 98.3 to 99.0. As for the business confidence climate, the index (IESI, Istat Economic Sentiment Indicator) confirmed its positive trend, bettering from 87.7 to 87.9.

The confidence index in manufacturing declined from 96.0 to 95.1. The confidence index in construction showed improvement, passing from 136.0 to 138.0. The market services confidence index increased from 78.4 to 82.0. The retail trade confidence index lessened from 88.2 to 87.9. In details, the opinions on the current business activity gave less favourable indications, while the expectations on the future sales bettered (the related balances passed from -14.6 to -19.3 and from -0.9 to 6.6, respectively). Finally, the level of inventories increased (the related balance heightened from 13.8 to17.4).

FXStreet reports that analysts at TD Securities (TDS) offer their afterthoughts on the January Fed monetary policy decision.

“Changes to the statement were relatively small, consistent with no near-term plans for policy changes. Nor did the chairman suggest a need for changes to current accommodative policy settings anytime soon. While he expressed some optimism about growth in the year ahead, he emphasized that the economy is a "long way" from the Fed's goals and talk of tapering is "premature."

“We maintain that near-term tactical risks favor a firmer USD and more focus may be placed on FX/equity correlations, which have only recently started to firm. Against this backdrop, the dollar bloc could lead losses, with AUDUSD looking rather precarious.”

Bloomberg reports that ECB Governing Council member Olli Rehn said that the ECB is ready to use all the tools necessary to stimulate inflation, and is keeping a close eye on the euro’s appreciation.

“We are certainly ready to use and adjust all our instruments as appropriate. We are closely monitoring developments in the exchange rate, especially regarding the inflation outlook.” - Rehn said.

Rehn noted that several of his Governing Council colleagues, including Dutch governor Klaas Knot, have recently raised the possibility of cutting interest rates.

Rehn described the region’s inflation outlook as “too low for my taste, and more importantly, too low for our aim.”

Euro-area inflation is currently -0.3%, compared with a medium-term goal of just-under 2%. The jump in the exchange rate over the past year is one factor pushing down on prices, in part by depressing import costs.

“I would not enter into a speculation on one or another instrument in our monetary toolbox,” Rehn said. “I would just say we are indeed ready to use and adjust all our instruments as appropriate.”

CNBC reports that chairman of Chinese investment management firm Citic Capital told that while there may be signs of a bubble forming in global markets, that frothiness is less likely in China.

“Overall, clearly, there is bubble around the world. China, I think, is less so because of … capital control. Second, (the) government is very determined not to create a real estate bubble. So, the banking sector’s been given very specific instructions not to increase lending,” said Zhang Yichen, who is also the chief executive of Citic Capital.

Chinese authorities have clamped down on the country’s property sector as debt risks for property developers mounted last year.

High-profile investors have recently warned of a massive bubble forming on Wall Street as they grow concerned that smaller traders may be getting carried away with speculative trades.

“There has been increased evidence of bubbles in pockets of the market — most recently reflected in Wednesday’s “flash mob” activity by retail traders in some of the most heavily shorted stocks (largely by hedge funds),” the financial research arm of Charles Schwab wrote in note.

“The trading activity is yet another sign of extremely frothy sentiment, which has been building in earnest since last fall. Lately, it has entered a unique new phase driven by retail traders,” the note warned.

During today's Asian trading, the US dollar rose amid risk aversion by investors following the Federal Reserve Board meeting.

The US Central Bank noted a slowdown in the recovery of economic activity and employment in the US due to the renewed increase in the incidence of COVID-19. The future trajectory of the economy will largely depend on the development of the epidemiological situation in the United States, including progress in vaccination, the Federal Open Market Committee (FOMC) said in a statement issued after the meeting.

The Fed has made cautious forecasts for the next few months due to the slow pace of vaccination. "We think we have a fight ahead of us. The pandemic continues to pose serious risks to the economy, " Federal Reserve Chairman Jerome Powell said.

The Federal Reserve left the interest rate on federal loan funds in the range of 0% to 0.25% per annum at the end of the meeting. The central bank also confirmed that it will keep asset repurchases at at least $120 billion a month "until there is significant progress in meeting the committee's goals for maximum employment and price stability."

"The cautious tone adopted by the Federal Reserve regarding the slow pace of vaccination attracted the attention of traders, and this contributed to the strengthening of the dollar," IG experts note.

The ICE dollar index, which tracks its performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.12%.

Reuters reports that the European Central Bank said that nine euro zone banks ate into their capital buffers last year, making use of leeway granted by supervisors to help them cope with the fallout of the coronavirus outbreak.

The ECB did not name the nine banks in its annual review of lenders on its watch but a chart in the report showed four of them barely met their requirements even after taking into account the pandemic-relief measures.

These allowed banks to use some of their capital buffers to absorb losses until the end of 2022, so that they wouldn't cut lending to the economy instead.

"Banks with low capital headroom, that is with a small margin between their capital ratio and minimum requirements, were subject to recommendations to enhance their capital planning," the ECB said in a press release.

It added overall capital buffers remained "ample" but warned of the risk of a sudden surge in loans that go unpaid as government support measures for businesses, households and banks are lifted.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2181 (310)

$1.2154 (629)

$1.2126 (305)

Price at time of writing this review: $1.2088

Support levels (open interest**, contracts):

$1.2058 (1073)

$1.2026 (1785)

$1.1986 (3146)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 5 is 47900 contracts (according to data from January, 27) with the maximum number of contracts with strike price $1,2000 (3146);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3792 (1703)

$1.3763 (1580)

$1.3725 (1126)

Price at time of writing this review: $1.3658

Support levels (open interest**, contracts):

$1.3535 (792)

$1.3485 (1896)

$1.3440 (1033)

Comments:

- Overall open interest on the CALL options with the expiration date February, 5 is 11416 contracts, with the maximum number of contracts with strike price $1,3750 (1703);

- Overall open interest on the PUT options with the expiration date February, 5 is 21008 contracts, with the maximum number of contracts with strike price $1,2500 (2183);

- The ratio of PUT/CALL was 1.84 versus 1.73 from the previous trading day according to data from January, 27

* - 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.

FXStreet reports that analysts at Danske Bank said that the ECB rate cut talks are back.

“ECB rate cut speculation got revived on Bloomberg's sources story on ECB examining the FX drivers, which got further ignited by Dutch Governor Knot's saying ECB could cut the deposit rate and sources stories saying that ECB officials believe that markets underestimate the probability of a rate cut. Front-end pricing point added almost 1.5bp for a rate cut by year-end (60% chance).”

RTTNews reports that according to the report from Statistics New Zealand, in December New Zealand posted a merchandise trade surplus of NZ$17 million following the NZ$252 million surplus in November.

Exports fell NZ$149 million or 2.7 percent on year to NZ$5.35 billion.

New Zealand's biggest goods export, dairy products, fell NZ$377 million (19 percent) in December.

Leading the total falls in December were milk powder, down NZ$227 million, butter, down NZ$62 million, and milk fats, down NZ$51 million on the same month in 2019.

Total dairy exports to China fell NZ$194 million (21 percent) to NZ$740 million in December. This was led by falls in milk powder, down NZ$113 million.

Imports rose NZ$213 million or 4.2 percent on year to NZ$5.33 billion.

Car imports were up NZ$106 million in December 2020 compared with December 2019.

Imports of electrical and machinery products were up NZ$90 million, and iron and steel up NZ$41 million in December.

For the fourth quarter of 2020, exports were up 0.4 percent on quarter to NZ$15 billion and imports were up 4.7 percent on quarter to NZ$14 billion for a trade surplus of NZ$412 million.