US dollar falls into the London fix

Dollar selling across the board

Some large dollar sales are going through ahead of the London fix and weighing on USD across the board. We’re seeing session extremes in USD/CAD, GBP/USD and EUR/USD with 10-20 pips moves relatively quickly.
There’s no fundamental news.

Even dairy prices are soaring: GDT price index +15.0%

Commodity boom in everything extends to milk

Commodity boom in everything extends to milk
Fronterra’s GlobalDairyTrade auction put the average price at $4231, which is a 15.0% increase, including 21.0% in whole milk powder.
Not only is that huge jump, but it’s the 8th consecutive auction with higher prices. Prices are up around 40% since November.

OPEC sees oil stocks dropping by about 400m barrels in 2021 – report

OPEC sees oil stocks falling in 2021

OPEC sees oil stocks dropping by about 400 million barrels in 2021 in latest supply and demand outlook presented to the technical meeting.
What that that doesn’t show is how much OPEC is pumping.

Oil steadies after earlier drop, OPEC remains in focus

Oil claws back earlier losses to unchanged levels around $60.65

Oil D1 02-03

WTI crude was down by 1% at the start of European trading just below $60 but has clawed its way back higher on the session as traders brush aside fears of OPEC+ increasing supply at the meeting later in the week.
There is talk about OPEC+ allowing as much as an increase of 1.5 mil bpd back into the market but in the bigger picture, I don’t think this puts much of a dent in oil sentiment.

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Yields creep a little higher on the session

The sentiment in the bond market is keeping the overall market mood more delicate once again in European morning trade

USGG10YR
10-year Treasury yields are up 2 bps to session highs of 1.439% while Italian 10-year yields are seen up 5 bps to 0.71% and German 10-year yields are up 1 bps to -0.32%.
Germany
Italy
It isn’t much but every slight push and pull in the bond market is being observed very closely at the moment. Equities are keeping on the defensive while the dollar is seen firmer across the board, as investors are heeding caution after some relief yesterday.

German exports to the UK reportedly fell by 30% in January compared to a year ago amid Brexit hit

The German Federal Statistics Office reports with the preliminary figures

The stats office also cites the 30% y/y drop as being “due to Brexit effects”, which follows a 15.5% drop in overall exports for the whole of 2020 as compared to 2019 – the largest yearly decline in export since the global financial crisis.
Total German exports to the UK amounted to €66.9 billion last year, having fallen gradually since 2015 (it was €89.0 billion back then). Meanwhile, total imports to the UK last year amounted to €34.7 billion – down 9.6% compared to 2019.

Nikkei 225 closes lower by 0.86% at 29,408.17

A softer mood in Asia as the rebound yesterday falters

Nikkei 03-02
The risk mood is keeping on the softer side, after China warned of bubbles and financial risks earlier – tempering with the mood in Asian equities today. For the Nikkei, the key trendline support is still holding for the time being.
The Hang Seng is down 1.5% while the Shanghai Composite is down 1.8%. Elsewhere, US futures are also looking more subdued as the bounce yesterday hits a stumbling block despite the bond market keeping a calmer mood so far on the day.
In the major currencies space, the dollar is more bid across the board with the loonie lagging behind as oil prices are also tracking lower just below $60 in anticipation of the OPEC+ meetings later on in the week.

Economic data coming up in the European session

Eurozone February inflation data due today

Inflation
After the broader rebound yesterday, the market is failing to find much reprieve on Tuesday so far with a lack of fresh cues to work with.
A firmer dollar is also making its way into the market narrative today and that is weighing on sentiment a little across the board, even as bonds remain calmer.
Asian equities are down alongside US futures, with the greenback keeping higher across the board. Notably, EUR/USD is testing its 100-day moving average while USD/JPY is slowly making its way towards the 107.00 handle.
Elsewhere, the pound’s upside momentum continues to stall as EUR/GBP keeps above key near-term levels around 0.8642-45 to trade around 0.8660 levels currently.
Oil is also down a little over 1%, trading back under $60 as traders get a bit jittery ahead of the OPEC+ meetings at the end of the week.
Risk sentiment remains the key focus with the market continuing to keep a watchful eye on bonds once again today. Fedspeak will be among the things to be mindful about this week and we’ll be getting more of that later today (I’ll outline in a separate post).
0700 GMT – UK February Nationwide house prices
Prior release can be found here. The surge in the housing market since last year – due to the stamp duty holiday – is running into a bit of moderation as of late and that might stay the case until there is a decision made on the stamp duty holiday expiration (which is set to carry on until 31 March for the time being).
0700 GMT – Germany January retail sales data
Prior release can be found here. After the massive slump in December, German retail sales is expected to improve slightly to start the new year but conditions are still relatively subdued due to lockdown measures still in place for most of Q1.
0855 GMT – Germany February unemployment change, rate
Prior release can be found here. German labour market data continues to be distorted somewhat by the furlough and short-time work schemes, so it is tough to really draw much conclusions from the report above still.
1000 GMT – Eurozone February preliminary CPI figures
Prior release can be found here. The main inflation reading is expected to keep steady at +0.9% y/y but the core reading is expected to fall slightly to +1.1% y/y from +1.4% y/y in January. Base effects will continue to play a factor in keeping the price trend more choppy and volatile in 1H 2021, so expect the ECB to keep brushing aside any positive ticks in inflation over the next few months.
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

GameStop ‘Roaring Kitty’ aka DeepF******Value’ is no longer a licensed broker

Via Reuters (citing US FINRA records) comes the news of the central character in the GME surge

Keith Gill, known as Roaring Kitty on YouTube and DeepF***ingValue on Reddit

  • no longer a registered financial broker
  • no longer licensed to act as a broker buying and selling securities on behalf of clients or as an investor adviser providing advice about securities to clients.
Gill was a huge bull on GME, which proved an outstandingly good call (no pun intended).
FINRA is  the Financial Industry Regulatory Authority
Via Reuters (citing US FINRA records) comes the news of the central character in the GME surge