Quiet trading as Lunar holidays begin
- Reasons for AUDUSD upside
- Tesla adds volatility to their balance sheet
- 18% of UK workforce is furloughed
- UK vaccinates nearly 20% of population
- Major currency pairs flat in quiet trading session
- Gold buoyed by falling real yields
- EU could conclude a deal with Novavax
- Holiday thinned markets await fresh catalyst
- Equities quietly going about their business so far today
- IEA say that oil market recovery remains fragile as virus impact persists
- Germany's Merkel: Lockdown will not be maintained a day longer than necessary
- ECB's Villeroy: ECB balance sheet greening does not mean more easing
- Dollar keeps in a tricky spot to start European trading
- Gold advance stalls for the time being, what levels to watch out for?
- Eurostoxx futures +0.1% in early European trading
- Germany January wholesale price index +2.1% vs +0.6% m/m prior
- Germany reports 10,237 new coronavirus cases, 666 deaths in latest update today
- AUD, GBP, NZD top session performers against the dollar
Other markets
- FTSE +0.04%
- Euro Stoxx +0.34%
- Dax +0.53%
- CAC -0.04%
- Bitcoin +3.46%
- Gold +0.03%
- US oil -0.60%
The AUD was the strongest on the session as the Treasury Secretary spoke about a better than expected Australian recovery. This was not that surprising as the RBA really seemed overly dovish at their last rate meeting. It seemed the strong AUD may have been their primary target. At any rate, combined with a dovish Powell and CPI miss, this gives an AUDUSD buy bias.
It has been a very quiet session otherwise on holiday thin conditions with Chinese markets now closed for a week over the Chinese Lunar New Year.
In the light of very little significant news the main narrative remains in place: Low interest rates, high levels of QE, and abundant fiscal stimulus alongside a quickening vaccine roll out all support risk assets. Stocks, commodities, and commodity currencies (AUD, NZD, CAD), all remain 'buy on the dips'. The main spanner in the works for this outlook right now would be a variant that is drug /vaccine resistant. See here for a piece I wrote on that.
Gold and silver found dip buyers as US10 yr yields fell on the weak US CPI yesterday. The major pairs were flat and dull.
The main event coming up is the initial jobless claims, but the markets are in a state of malaise, so that may not be enough of a catalyst to really get things going. However, with the squawk on and the world turning as it does, as always, it pays to be alert. Adam and Greg will be guiding you through the next session and keeping is briefed on the breaking news. Justin will return tomorrow.
