Archives of “January 25, 2021” day

rss

European indices end the day sharply lower

  
Analysis, Global Indices

German DAX -1.7%. France’s CAC -1.6%. UK’s FTSE -0.9%

The major European indices are ending the session sharply lower. Germany’s IFO data this morning came in weaker than expected at 90.1 vs. 91.4 estimate and 92.2 last month. The expectations index was also lower at 91.1 vs. 93.6. The current assessment came in at 89.2 vs. 90.6 estimate.

The provisional closes are showing:
  • German DAX, -1.7%
  • France’s CAC, -1.6%
  • UK’s FTSE 100, -0.9%
  • Spain’s Ibex, -1.8%
  • Italy’s FTSE MIB, -1.7%
in the European debt market, the benchmark yields are all trading lower as concerned about growth sends yields lower.
German DAX -1.7%. France's CAC -1.6%. UK's FTSE -0.9%_
In the forex market, the strongest and weakest currencies moved closer together relative to the New York opening. The NZD remains the strongest but has given up some of its early gains in the NY session. Likewise, the EUR and CHF (which were the weakest currencies at the NA open) are still the weakest currencies at the London close, but have recovered some of its earlier losses.  The USD has moved higher from lower mixed levels. The greenback is mostly higher vs the majors (marginally), and is near unchanged vs. the JPY and NZD now.

Dollar regains some ground, European equities pare early advance

  
Analysis, Global Indices

A bit of a mixed start to the session so far

The dollar has trimmed losses on the day, even pushing higher against the euro, pound and franc currently as we navigate through the first-half of European morning trade.
DAX
The DAX has seen its early gains evaporate and it is also a similar case for most major European indices in the opening hour-and-a-half. US futures though, are keeping more buoyed, with S&P 500 futures up 0.3% and Nasdaq futures up 0.9%.
That may suggest that we shouldn’t write off any reversal in the risk tones today until Wall Street has their say later.
Elsewhere, 10-year Treasury yields have also backed off to fall flat now at 1.084%.
This is all pinning EUR/USD lower to 1.2150, with the weaker German Ifo report not helping, and GBP/USD falling from its high of 1.3723 earlier to 1.3680 currently.
Meanwhile, AUD/USD and NZD/USD have also trimmed gains with the former retreating from 0.7740 to 0.7725 and the latter from 0.7215 to 0.7205 at the moment.

BOJ’s Kuroda: State of emergency measures may dampen Japan’s economic recovery

  
Analysis, Economy

Remarks by BOJ governor, Haruhiko Kuroda

Kuroda
  • Japan has been affected by the coronavirus significantly
  • Virus resurgence, state of emergency may weaken economic recovery
  • Most important policy is to avoid unemployment and corporate failures
  • Both fiscal, monetary policies have been successful in preventing that
Some token remarks by Kuroda really. But this reaffirms that they are not going to be moving away from their current policy stance for quite some time – likely only being able to consider doing so after the Fed has made their move (and even then, maybe not).

Nikkei 225 closes higher by 0.67% at 28,822.29

  
Analysis, Global Indices

A risk-on start to the new week in the equities space

Nikkei 25-01
Despite more tepid tones in Wall Street at the end of last week, the market is keeping more optimistic in trading today as Asian equities push higher and we also see US futures roaring back ahead of European morning trade.
The Hang Seng is up 1.9% while the Shanghai Composite is up 0.5%, with S&P 500 futures being up 0.4% and Nasdaq futures up 0.7%.
That is allowing for a more risk-on mood going into the session ahead, with the bond market also reflecting calmer tones. US 10-year Treasury yields are up 1 bps to 1.096%.
In turn, the dollar is being pinned slightly lower while the aussie, kiwi and loonie are leading gains in the major currencies space for the time being.

New Zealand reports a case of the South African coronavirus strain – community transmission

  
Analysis, COVID-19

The first community transmission case in NZ for many months

The NZ official in charge of COVID-19 response says he is confident toe cas was acquired during quarantine

Authorities in New Zealand have shown themselves to very quick in responding to new outbreaks with regional lockdowns as needed. Something to keep an eye on due to the SA variant said to be more highly infectious.

China’s Global Times says large-scale tests of digital currency planned for this year

  
  Analysis

China’s sovereign digital currency – Digital Currency Electronic Payment (DCEP) – is planned to be tested in several major cities in 2021.

The GT notes comments from officials in Beijing, Shanghai and Guangdong Province, (Shenzhen)
  • “The pilot testing is only the first step of a ‘long march.’ Once launched, the digital yuan will reshape China’s financial industry and unleash a promising digital finance service sector worth billions of yuan,” a Shenzhen-based veteran industry insider told the Global Times on Sunday. 

China’s yuan – “nowhere for it to go but down” & intervention coming

  
Analysis, Forex

Scanning some pieces, this from Friday has comments on the levels ahead for the Chinse yuan.

Dan Rosen, a senior associate at the Center for Strategic and International Studies.
  • “There is nowhere for it to go but down” 
  • “Over the course of 2021, the question will be how much does the renminbi subside against the dollar”
  • “I think we’re going to see them intervene to put some bands around [the yuan]” 
Derek Scissors, at the American Enterprise Institute and also chief economist at China Beige Book:
  • China will intervene to keep the yuan from strengthening much further
  • and then controlling a slow depreciation as the US economy recovers
If you do check out that link above there is a wider discussion on US-China relations.
Scanning some pieces, this from Friday has comments on the levels ahead for the Chinse yuan.
Go to top