Tin tức thì trường

The Commerce Department announced on Monday that construction spending surged 1.7 percent m-o-m in January 2021 after a revised 1.1 percent m-o-m gain in December 2020 (originally a 1.0 percent m-o-m advance). This was the largest monthly increase in construction spending since October 2020.

Economists had forecast construction spending rising 0.8 percent m-o-m in January.

According to the report, spending on private construction jumped 1.7 percent m-o-m, while investment in public construction also surged 1.7 percent m-o-m.

On a y-o-y basis, construction spending rose 5.8 percent in January. 

• So much as recent yield rise is unwarranted, ECB must react against it
• ECB is ready to just all of its instruments and policy options
• Options include deposit rate cut if needed
• There is no risk of overheating in Europe
• ECB should be ready to accept inflation above target for some time after past shortfal
• Forward guidance could be strengthened to make tolerance for inflation overshoot explicit
• So much as recent yield rise is unwarranted, ECB must react against it
• First tool is actively using flexibility of PEPP purchases

A report from the Institute for Supply Management (ISM) showed on Monday the U.S. manufacturing sector’s activity expanded more than expected in February.

The ISM's index of manufacturing activity came in at 60.8 percent last month, up 2.1 percentage points from an unrevised January reading of 58.7 percent. The February reading pointed to the fastest expansion in factory activity since February 2018.

Economists' had forecast the indicator to edge up to 58.8 percent.

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

According to the report, the New Orders Index stood at 64.8 percent, up 3.7 percentage points from the January reading, while the Production Index came in at 63.2 percent, a climb of 2.5 percentage points compared to the January reading, the Employment Index was at 54.4 percent, 1.8 percentage points higher from the January reading, the Backlog of Orders Index registered 64 percent, 4.3 percentage points above the January reading and the Supplier Deliveries Index recorded 72 percent, up 3.8 percentage points from the January figure. Meanwhile, the Inventories Index registered 49.7 percent, 1.1 percentage points lower than the January reading. On the price front, the Prices Index posted 86 percent, up 3.9 percentage points compared to the January reading of 82.1 percent.

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted that the manufacturing economy continued its recovery in February. “Survey committee members that their companies and suppliers continue to operate in reconfigured factories”, he said, adding: "Issues with absenteeism, short-term shutdowns to sanitize facilities, and difficulties in hiring workers remain challenges and continue to cause strains that limit manufacturing-growth potential. Optimistic panel sentiment increased, with five positive comments for every cautious comment, compared to a 3-to-1 ratio in January.” He also said that the past relationship between the PMI and the overall economy indicated that the PMI for February (60.8 percent) corresponds to a 5-percent increase in real gross domestic product (GDP) on an annualized basis.

The latest report by IHS Markit revealed on Monday the seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index(PMI) came in at 58.6 in February, down from 59.2 in January but slightly up from the earlier released “flash” reading of 58.5. The February reading pointed to the second-strongest improvement in factory activity since April 2010.

Economists had forecast the index to stay unrevised at 58.5.

According to the report, the headline figure was supported by sharp increases in output and new orders. In addition, employment grew at the steepest rate since September 2014, as business confidence also improved.

• Pandemic showed flaws in financial system
• Outflows from money market funds, in particular, showed ideas like swing pricing, minimum deposits, may be needed to stop redemption runs from developing
• Overall result showed system was resilient, proved the value of things like central clearing
• We need to consider reforms to protect against future shocks
• Central clearing platforms could still review margin rules, other requirements, to see what could be improved

U.S. stock-index futures surged on Monday, as hopes of U.S. economic recovery heightened on encouraging vaccine and stimulus news.

Global Stocks:

• We want to be in a position that if things didn't get better as we are forecasting, the tool of negative rates can be feasibly used if at the time we made the policy decision to use it
• Contingency planning is very different from thinking negative rates will be used
• Some people have been able to accumulate lot of savings but those people are typically more in high-income brackets

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

Yandex N.V. (YNDX) upgraded to Overweight from Equal-Weight at Morgan Stanley

FXStreet reports that the S&P 500 Index has tested and held as expected what is seen as more important supports at 3792/74 – the early February price gap and rising 63-day average – and the bias of the Credit Suisse analyst team remains for this to remain a floor to define the lower end of a sideways range.

“S&P 500 setback has extended to test and hold as expected what we see as more important supports at 3792/74 – the early February price gap and rising 63-day average – and our bias remains for this to remain a floor, for now at least, to define the lower end of a sideways ranging phase.” 

“Immediate resistance is seen at 3861, then the 13-day exponential average and price resistance at 3872/76, back above which is needed to ease the immediate downside bias, for strength back to the near-term downtrend at 3917/18, potentially the 3929/34 highs of last week.” 

Germany's Federal Statistical Office (Destatis) reported on Wednesday the country’s consumer price index (CPI) is expected to increase 0.7 percent m-o-m in February after gaining 0.8 percent m-o-m in the previous month.

On the y-o-y basis, Germany’s CPI is seen to surge 1.3 in February, following a 1.0 percent climb in February. This represents the largest advance since March 2020.

Economists had predicted inflation would rise 0.5 percent m-o-m and 1.2 percent y-o-y in February.

According to the report, food price rose 1.4 percent y-o-y in February after a 2.2 percent y-o-y increase in January. Services costs also grew 1.4 percent y-o-y in February, the same pace as in the previous month. Energy prices went up 0.3 percent y-o-y after a 2.3 percent y-o-y decline in January.

Meanwhile, the harmonized index of consumer prices for Germany (HICP), which is calculated for European purposes, is expected to rise 0.6 percent m-o-m and 1.6 percent y-o-y.

GBP rose against most of its major counterparts in the European session on Monday, as bets for a swift recovery of the UK's economy heightened as the country moved fast with the implementation of its COVID-19 vaccination program. 

Official data showed that more than 20 million people in Britain have received their first dose of a COVID-19 vaccine. The UK's prime minister (PM) Boris Johnson said the milestone is a "huge national achievement", adding that "every jab makes a difference in our battle against Covid". The government's target is to offer all adults the first shot by the end of July. Britain also reported that nearly 800,000 people have received a second dose.

The UK's factory activity data for February and mortgage approvals figures also offered cause for optimism. 

The latest survey from IHS Markit revealed that the UK’s manufacturing activity grew slightly faster than initially estimated in February. The IHS Markit/CIPS UK Manufacturing PMI was revised slightly higher to 55.1 in February 2021 from a preliminary of 54.9 and 54.1 in January. Economists had forecast the indicator to remain unrevised. IHS Markit noted that the February upturn of the UK manufacturing sector was constrained by supply-chain disruption and increasing cost pressure, keeping output growth only marginal despite a slight improvement in new order intakes. 

Meanwhile, the Bank of England (BoE) announced that the number of approvals for house purchase in the UK, which is an indicator of future lending, dropped to 98,994 in January from 102,809 in December. This exceeded economists’ forecast of 96,000 mortgage approvals for January. 

Market participants also await the announcement of the budget by the British finance minister Rishi Sunak on Wednesday. On Sunday, Sunak pledged to support the economy while the country remains under coronavirus restrictions. It is expected that the finance minister will announce more borrowing on top of his almost GBP 300 billion of COVID-19 spending and tax cuts.

FXStreet reports that analysts at Credit Suisse note that USD/CAD extended its gains further on Friday, completing a minor base, but with strength remaining capped at the pivotal 55-day average.

“We ideally look for 1.2731/49 to ideally cap for a turn back lower and see support initially at 1.2678/61, removal of which would ease the recent upside pressure. Below here can see 1.2587 next, beneath which would negate the small base and see a move back to the current low for the year at 1.2468, just shy of the mid-February 2018 low at 1.2452, where a more concerted effort to hold is expected.” 

“Above 1.2749 would suggest an even deeper correction higher than expected and reassert the broader range, with resistance initially seen at 1.2763/66.”

FXStreet reports that economist Lee Sue Ann at UOB Group suggests the RBA is likely to leave its monetary conditions unchanged at its Tuesday’s meeting.

“So far, the RBA’s rhetoric has reinforced our view that it will hold off bringing the policy rate into negative territory (for now). We thus look for the OCR to remain unchanged at 0.10%.”

“On the term funding facility (TFF), we think the RBA could let it end at its scheduled date of June 2021.”

FXStreet reports that analysts at Credit Suisse expect EUR/GBP to see near-term consolidation above 0.8627/17, but with the broader trend seen lower for a retest of a cluster of Fibonacci supports at 0.8543/20.

“Our ideal roadmap is for further near-term weakness to 0.8627/17, but with this ideally holding for now for the unfolding of a near-term consolidation phase.” 

“Big picture, we look for a break in due course for a retest of more important Fibonacci support, seen starting at 0.8549 and stretching down to 0.8520 – the 38.2% retracement of the entire 2015/2020 bull trend.” 

1. We're at the point where there's daylight on the horizon for U.S. economy
2. U.S. economy will continue recovering from the coronavirus pandemic this year
3. Expects inflation to rise, but not to problematic levels
4. I would be disappointed if we didn't see yields rise as the outlook improves
5. Bond yields remain meaningfully lower than pre-pandemic levels
6. Says he remains confident that Fed will reach its goal of getting inflation sustainably up to 2% over the long run

FXStreet reports that according to economists at Charles Schwab, the days of  low volatility are likely behind us.

“With real yields still in negative territory, there is plenty of room for them to normalize longer term if the economy’s prospects continue to improve. Even without rising inflation, yields can continue to rise. While the Federal Reserve may try to temper the move up in bond yields, if it is too fast or appears likely to hinder the economic recovery, the trend is likely to be higher over time.”

“Short-term interest rates tend to reflect expectations for the path of the federal funds rate and usually don’t diverge that much from the Fed’s estimates. However, over the past week even two-year yields crept up a bit. More importantly, intermediate-term yields moved up sharply. The move suggests that the market is pricing in the risk that the Fed will be hiking rates sooner, and perhaps by more than indicated by the Fed’s projections.”

“Given the improving outlook for the economy coupled with a central bank willing to tolerate higher inflation, we would expect bouts of volatility ahead as markets reprice for a different environment in 2021 and beyond. Over the long-run, high yields driven by stronger economic growth are positive, but the process can be volatile.”

According to preliminary estimates from Istat, in February 2021 the rate of change of the Italian consumer price index for the whole nation (NIC) was +0.1% on monthly basis and +0.6% on annual basis (from +0.4%).

The slight speed up of All items index was mainly due to the less amplitude of the decrease of prices of Non-regulated energy products (from -6.3% to -3.6%) and to the trend reversal of prices of Services related to transport (from -0.1% to +1.0%).

Core inflation (excluding energy and unprocessed food) and inflation excluding energy slightly sped up respectively to +1.0% and to +0.9% (both from +0.8% in the previous month).

The increase on monthly basis was mainly due to the prices of Non-regulated energy products (+1.4%), of Tobacco and of Services related to transport (+0.4% for both).

In February 2021 the rate of change of the Italian harmonized index of consumer prices (HICP) was -0.2% with respect to the previous month and +1.0% on annual basis (from +0.7% in January).

According to the report from the Bank of England, british consumer borrowing fell at its fastest pace in January since May last year as the country went back into a coronavirus lockdown.

Unsecured lending to consumers fell by 2.4 billion pounds, the biggest fall since last May’s 4.6 billion-pound drop. That took the year-on-year fall to 8.9%, the biggest decline since monthly records began in 1994.

Net mortgage borrowing remained robust at £5.2 billion in January. There were 99,000 mortgage approvals for house purchase in January, in line with the average of 100,000 since October 2020. Effective interest rates on new mortgage borrowing fell to 1.85%.

Private non-financial companies borrowed £4.3 billion from capital markets in January. Net bank borrowing by small and medium sized businesses remained at £0.5 billion in January, whilst large businesses made net repayments of £1.5 billion.

Households deposited an additional £18.5 billion in January. Deposit interest rates remained at historically low levels.

FXStreet reports that FX Strategists at UOB Group now sees the likeliness of USD/CNH to advance to the 6.5150 level in the next weeks.

Next 1-3 weeks: “There is not much to add to our update from last Friday. As highlighted, ‘upward momentum has been boosted’ and ‘there is room for USD to move towards 6.5150’. For now, there is no change to the ‘strong support’ level at 6.4400. A break of the ‘strong support’ would indicate the positive phase in USD that started more than a week ago has run its course.”

According to the report from IHS Markit/CIPS, the upturn of the UK manufacturing sector was constrained by supply-chain disruption and rising cost pressure in February, keeping output growth only marginal despite a modest improvement in new order intakes.

The seasonally adjusted manufacturing PMI rose to 55.1 in February, up from 54.1 in January and above the flash estimate of 54.9. The PMI has signalled growth for nine months in a row.

Output rose at the weakest pace during the current nine month sequence of increase. New orders expanded following a slight decrease in January, as domestic demand improved and new export business inched higher. Companies reported improved demand from several markets – including the US, Asia, Scandinavia and (in a few cases) mainland Europe - but noted that the ongoing impact of COVID-19, Brexit complications and shipping difficulties also constrained export order growth.

Investment goods was the best performing sector during February, registering the fastest growth of output, new orders, new export business and employment of the three industries covered by the survey. Intermediate goods also saw production and new business increase, in contrast to the continued downturn at consumer goods producers.

Business optimism rose to a 77-month high in February, with over 63% of companies reporting that they expect output to be higher in one year's time. Positive sentiment was linked to continued recovery from the pandemic, reopening of the global economy (including less transport restrictions) and reduced Brexit uncertainties.

According to the report from IHS Markit, the eurozone’s manufacturing economy performed strongly in February as operating conditions improved to the greatest degree for three years. 

Seasonally adjusted headline PMI rose to 57.9, up from 54.8 in January and better than the earlier flash reading. The index was above the 50.0 no-change mark that separates growth from contraction for an eighth successive month. All three broad market groups recorded an improvement in operating conditions during February. Investment goods producers registered the strongest growth (the best since January 2018), followed by intermediate goods. Although consumer goods recorded comparatively modest growth, it was nonetheless its best performance since last September.

The headline eurozone manufacturing PMI was driven higher by sharper gains in both output and new orders, which in each case were the best since last October’s recent peaks. Higher exports were a key driver of overall new order gains, with latest data showing the strongest rise in new export trade since January 2018. A noticeable feature of February’s survey data was the continued lengthening of delivery times for inputs. Latest figures showed the second-greatest deterioration in lead times since data were first available nearly 24 years ago. 

Finally, confidence about the future continued to strengthen, with the latest survey showing that optimism hit its highest ever level (expectations data were first available in mid-2012). Growth projections were linked to hopes of a successful rollout of vaccination programmes and a resolution to the pandemic in the coming months.

FXStreet reports that analysts at ANZ Bank maintain the year-end target of AUD/USD at 0.82.

“Domestically, despite a couple of COVID-19 scares, labour market data and business conditions continue to surprise to the upside. Improving data and easy financial conditions globally suggest domestic policy will emerge as a tailwind for the AUD, as an extension of the RBA’s QE program is drawn into question.”

“Globally, we expect risk appetite and confidence in the reflation dynamics to be the key driver for the currency. A broad vaccine rollout is expected to evolve into a strong growth rebound as key industries reopen.” 

“We maintain our AUD/USD year-end target at 0.82 and expect the AUD to outperform most G10 peers as the global recovery matures.”

During today's Asian trading, the US dollar fell against the euro and the pound, but stabilized against the yen.

Growing expectations of the adoption by the US Congress of a new package of measures to support the economy, proposed earlier by US President Joe Biden, contribute to an increase in risk appetite in world markets and, consequently, a decrease in demand for dollars.

The House of Representatives over the weekend approved Biden's proposed $1.9 trillion stimulus package, which includes, among other things, an increase and extension of federal unemployment benefits, direct payments to Americans of $1,400 per person, the allocation of $350 billion to states and local governments, as well as funding for vaccination programs.

The bill, approved by the lower house of the US Congress, will be sent to the Senate for consideration, which is likely to make changes to it. After that, the House of Representatives will have to re-approve the package of measures, already in an amended form, before sending it to the president for signature. Biden urged the Senate not to delay approval of the bill, saying that " there is no time to lose."

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.08%.

FXStreet reports that economists at Rabobank expect choppy trading in the coming months, but the USD could prove to be more resilient than the consensus is expecting.

“The US does appear to be better placed than some major economies for the recovery and this suggests that the USD could start to find its feet in the months ahead. The fact that the Fed made better progress than its peers in normalizing interest rate policy in the years following the Global Financial Crisis coupled with the enormity of the proposed Biden stimulus bill is likely to keep alive speculation that the Fed may be among the first to change tack on interest rate policy. While we continue to see scope for EUR/USD to push to 1.23 as risk appetite recovers and the USD retreats again, we expect a choppy path ahead for EUR/USD which may make it difficult for the currency pair to escape this year’s trading range.”

According to the report from the Federal Statistical Office (FSO), turnover adjusted for sales days and holidays fell in the retail sector by 0.9% in nominal terms in January 2021 compared with the previous year. Seasonally adjusted, nominal turnover fell by 4.9% compared with the previous month. The economic sectors were affected to varying degrees.

Real turnover adjusted for sales days and holidays fell in the retail sector by 0.5% in January 2021 compared with the previous year. Real growth takes inflation into consideration. Economists had expected a 4.5% increase. Compared with the previous month, real, seasonally adjusted retail trade turnover registered a decline of 5.3%.

While retail sales of food, drinks and tobacco recorded an increase in nominal turnover of 13.7% (in real terms +13.9%) the non-food sector registered a nominal minus of 10.4% (in real terms –10.1%). 

Adjusted for sales days and holidays, the retail sector excluding service stations registered a 1.0% growth in nominal turnover in January 2021 compared with January 2020 (+1.3% in real terms). The result for service stations was a loss of turnover of 22.2% (in real terms –16.4%).

Excluding service stations, the retail sector showed a seasonally adjusted decline in nominal turnover of 5.1% compared with the previous month (in real terms –5.5%). Retail sales of food, drinks and tobacco registered a nominal minus of 1.2% (in real terms –0.9%). The non-food sector showed a minus of 11.0% (in real terms –11.6%).

eFXdata reports that ANZ Research discusses its latest outlook for Gold.

"The US 10y Treasury yield recently pushed above 1.4%, representing its highest point since the start of the pandemic. More importantly for gold, the 30y Treasury yield has climbed 20 basis points over the past month to hit 2.18%. With policy makers still advocating immense policy support, the likelihood of bond yields falling is low. However, we now expect US inflation to hit 2.5% this year. Combined with further depreciation in the USD, we see gold’s fair value at USD2,000/oz in the second half of the year," ANZ adds.

RTTNews reports that latest survey from Caixin showed that the manufacturing sector in China continued to expand in February, albeit at a slower pace, with a 

In February, the manufacturing PMI was 50.9. That's down from 51.5 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The index was expected to be 50.5.

Individually, output expanded modestly amid a softer rise in new work as the pandemic weighed on export sales and supplier performance.

Greater prices for raw materials and higher transport costs led to a further substantial rise in input costs. As a result, prices charged by manufacturers rose solidly as companies looked to partially pass on higher cost burdens to customers.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2213 (3136)

$1.2174 (2297)

$1.2142 (3970)

Price at time of writing this review: $1.2085

Support levels (open interest**, contracts):

$1.2012 (4340)

$1.1977 (7185)

$1.1937 (5898)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date March, 5 is 102909 contracts (according to data from February, 26) with the maximum number of contracts with strike price $1,2000 (7185);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4088 (1871)

$1.4055 (952)

$1.4006 (492)

Price at time of writing this review: $1.3981

Support levels (open interest**, contracts):

$1.3840 (176)

$1.3807 (295)

$1.3769 (612)

Comments:

- Overall open interest on the CALL options with the expiration date March, 5 is 15324 contracts, with the maximum number of contracts with strike price $1,4250 (2483);

- Overall open interest on the PUT options with the expiration date March, 5 is 17931 contracts, with the maximum number of contracts with strike price $1,3500 (1331);

- The ratio of PUT/CALL was 1.17 versus 1.16 from the previous trading day according to data from February, 26

* - 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.