Daily Market Outlook, March 4, 2021

Daily Market Outlook, March 4, 2021 Asian equity markets are lower this morning after a decline on Wall Street yesterday which reports suggest were promoted by rise in US Treasury yields. The US Senate delayed the start of the debate on the Biden Administration’s $1.9trn fiscal stimulus bill until at least Thursday, potentially delaying a final vote.Yesterday’s UK budget extended most current economic support measures but also pointed to tax increases ahead. The EU has threatened legal action after the UK government unilaterally extended the grace period for initiating checks on goods exports to Northern Ireland.Today’s UK construction PMI measure is forecast to stage a rebound back above 50 in February after posting its first sub50 reading (an indication that activity is declining) since May. Only housing activity continued to expand and even that was at a slower rate, while both commercial and civil engineering activity fell. However, as the construction sector is less directly impacted by ongoing lockdown restrictions, look for a pickup to 51.0. Also of interest will be whether the survey identifies the same sort of issues with input cost rises and supply chain difficulties that appear to be having a significant impact on manufacturing.In the Eurozone, January retail sales are expected to be down sharply reflecting the ongoing impact of restrictions. Consensus expectations are for a 1.2% monthly fall but, as Germany posted a larger drop of 4.5%, there may be downside risks to that forecast. The Eurozone unemployment rate is expected to be unchanged at 8.3% in January. In the US, weekly initial jobless claims will provide insight on the state of the labour market ahead of tomorrow ’s monthly report for February. Last week the numbers surprised on the downside but that may reflect temporary weather-related disruptions, and in general recent releases have pointed to sluggish employment growth at best. Nevertheless, given signs that US economic growth is accelerating, the jobs market may now start to pick up. Already released durable goods orders suggest a sizable gain in overall US factory orders, look for a 2.1% increase.US Federal Reserve Chair Powell is scheduled to speak today. In other recent comments he has played down the likelihood of a rapid rebound in inflation and Fed said that US monetary policy is likely to remain very stimulatory for some time. However, he has also seemed to suggest that the recent rise in government bond yields may be a justified reaction to improving economic conditions.G10 FX Options Expiries for 10AM New York CutLarger Option PipelineEUR/USD: Mar04 $1.1890-10(E1.2bln)USD/JPY: Mar04 Y105.60-75($1.6bln); Mar05 Y105.45-60($1.6bln), Y106.40-60($2.0bln-USD puts), Y107.00-05($1.0bln); Mar08 Y104.25-40($2.8bln), Y105.50-55($1.7bln)AUD/USD: Mar04 $0.7800(A$944mln), $0.7820-25(A$1.4bln-AUD puts)AUD/NZD: Mar11 N$1.0730(A$1.7bln-NZD puts)USD/CAD: Mar05 C$1.2500-20($1.0bln), C$1.2620($1.1bln)USD/CNY: Mar08 Cny6.45($1.5bln)Technical & Trade ViewsEURUSD Bias: Bullish above 1.20 bearish belowEURUSD From a technical and trading perspective, the closing breach of 1.21 and the descending trendline is a bullish development opening a retest of prior highs at 1.2350, only a move back through 1.20 would suggest further downside opening a potential test of 1.17 yearly pivotFlow reports suggest topside offers 1.2180-1.2220 level with weak stops above the level and increasing on any push above the 1.2250 level with possible strong offers into the 1.2300 level Downside bids into the 1.2000 area with weak stops likely on a move through to the 1.1980 area congestion around the sentimental 1.1950 area before stronger bids are likely into the 1.1900 levels.GBPUSD Bias: Bullish above 1.3750 targeting 1.44GBPUSD From a technical and trading perspective, as 1.40 now acts as support bulls will target a test of 1.44 as the next upside objective. Below 1.40 opens a retest of 1.3750 pivotal trend support.Flow reports suggest downside bids into the 1.3850 area with likely weak stops on a move through before stronger bids likely into the 1.3800 level and increasing congestion possible to the 1.3750 area before weakness reappears to the downside, topside offer light through the 1.4000 with limited sentimental offers before weak stops appear and the market likely to be weak through to close to 1.4100 where the market sees stronger offers.USDJPY Bias: Bullish above 104.50 targeting 107USDJPY From a technical and trading perspective, as 104.50 supports there is potential for a further squeeze higher to test offers towards 107. A loss of 103.50 would negate further upside and suggest a resumption of trendFlow reports suggest topside offers continue through to the 107.20 level with weak stops possible on a breakthrough the level and limited offers through to the 107.40-60 area before opening to stronger offers through the 107.80 area possibly extending through the figure level and strong option interest. Downside bids light through to the 106.50 area with light congestion before weakness appears to the 106.00 level a little stronger bid with weak stops on a move through the 105.80 before stronger bids appear through the 105.50 level increasing to the 105.00 area.AUDUSD Bias: Bullish above .7560 bullish targeting .8200AUDUSD From a technical and trading perspective, as the major trendline support at .7560 now acts as support, look for target wave 5 upside objective towards .8000. A closing breach of .7730 of the internal descending trendline will encourage the bullish thesis.Flow reports suggest downside bids into the 0.7700 area and likely to be strong however, weak stops through the 0.7680 area with the market likely only to open a short distance before stronger bids again appear and the market struggles for any further downside movement, Topside offers light through the 78 cents level with weak stops likely above the level and the 79 cents level then likely to open quickly and very little to curb the push.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-march-4-2021
via IFTTT

Reflation trades in FX markets expected to continue in March: Reuters poll

from Forex News https://www.investing.com/news/economy/reflation-trades-in-fx-markets-expected-to-continue-in-march-reuters-poll-2436701
via IFTTT

Market Update – March 4 – Ahead of Powell & OPEC

Reflation trades are back with a vengeance, pushing pressure on stock markets as yields rise. Treasuries managed to stabilise somewhat overnight, after a sell off yesterday saw rates pushing higher again, but across Asia bonds as well as stocks sold off.

Markets are looking ahead to scheduled comments from Fed Chairman Powell for soothing words, but in Asia mounting concern over the health of China’s property market added to pressure on equity markets. Essentially it seems the turning point on policy is getting closer and that will keep bonds under pressure. GER30 and UK100 futures are currently down -0.9% and -0.7% respectively, with US futures also under pressure, led by a -0.7% drop in the USA100 future. While much of the erosion is a function of the improved outlook on the recovery, as noted by Fed officials, there is a breath of inflation filtering in, reflected in the pop in the 5-year breakeven to 250 bps, the widest since mid-2008.

JPN225 and ASX closed with losses of -2.1% and -0.8% respectively, while Hang Seng and CSI 300 are currently down 2.2% and 2.99%. Markets remains very susceptible to the action in Treasuries with the jump in rate supporting the USA30’s reflation trade, but weighing significantly on the tech-heavy USA100 which plunged -2.7% given its high valuations. 

Headlines:

• Reuters report that China’s $1 trillion sovereign wealth fund (China Investment Corp (CIC)) is scouting for long-term investments in the United States.
• Australia Retail Sales for January, final, +0.5% m/m.
• Australia trade balance for January AUD 10,142m surplus (vs. expected AUD 6850m surplus).
• Goldman Sachs is looking for further rising commodity prices and a comeback in growth.

Forex Market

EUR – stacked in the mid 1.20 area.
GBP – steadied at 1.3900-1.3960.
JPY –  at 7-month high at 107.16
AUD – benefited from a record trade surplus, NZD was also supported, t, recovered from early losses and rose to 0.7810
CAD –tested 1.2600 but settled at 1.2635 by the end of the North American Session.
GOLD – hit a 9-month low of $1,701.8
USOil – edged up to $61.60 ahead of the OPEC + meeting today.
Bitcoin – Reuters: Bitcoin has surged 78% so far this year as it gains more acceptance in the financial services industry, but the U.S. financial regulator is likely to start working on guidelines for digital assets, which could increase scrutiny of cryptocurrencies. (below 50K currently)

Today: The calendar has Eurozone retail sales and unemployment data for January, as well as the UK CIPS construction PMI. Investors will also continue to assess the UK budget, which offered an extension of furlough payments through to September, but also introduced first steps to try and recoup the costs of virus measures. Initial and continuous Jobless claims will be on tap however Fed’s Chairman Powell and OPEC meeting will be in the spotlight.

Biggest mover – AUDJPY (+0.60% as of 07:30 GMT) & EURAUD (-48% as of  07:30 GMT)

Click here to access the our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /217832/
via IFTTT

Dollar Up Over Treasuries’ Orderly Gains, but Concerns Remain

from Forex News https://www.investing.com/news/forex-news/dollar-up-over-treasuries-orderly-gains-but-concerns-remain-2436749
via IFTTT

NFP: Major divergence in estimates

US ADP reported private payrolls increased 117k in February, well below forecast (177k), though the 174k January gain was revised higher to 195k. The service sector supported the increase, with jobs rising 131k. In this sector, trade/transport led with a 48k increase, followed by education/health with a 35k gain, while leisure/hospitality added 26k. Employment in the goods sector declined -17k including a -14k drop in manufacturing and a -3k dip in construction. As for company size, small firms added 32k workers, with medium sized companies adding 57k, with a 28k increase for large firms.

The US Dollar slipped following the February ADP jobs report but quickly recovered, turning the USDIndex close to 91.00. Firmer Treasury yields should keep USD bulls in control, while struggling equities may keep the Greenback’s safe-haven status in effect.  The USA500 and the USA100 have slipped into negative territory. Bonds are for sale globally, led by Treasuries and Gilts. Reflation trades and the advent of a boatload more of stimulus are weighing, with a double whammy of reluctant investors afraid to step in after very poorly received auctions of late. The 10-year yield has cheapened 7.2 bps to 1.46%, with the bond 6 bps higher to 2.25%, while the Gilt has climbed 8 bps to 0.764%.

Looking ahead, today’s data signal only modest downside risk for payrolls on Friday, given the loose correlation of the “as reported” figures to monthly payroll swings. The estimates in the market  have major divergence, with the Reuters Poll estimating 180K, FXstreet at 195Kn while Action economics estimates a 350k February nonfarm payroll bounce that lies above market forecasts, as big January divergences in the jobs data are partly reversed. The range in the Reuters Poll estimates varies from -100,000 to 500,000, which is massive.

In the meantime, in January, a huge 0.9% hours-worked gain was composed of a lean 49k payroll rise but a 35.0 workweek that marked a 21-year high. Hence a payroll bounce should be seen in February with a workweek pullback to 34.9, alongside a flat hours-worked figure. The jobless rate is expected to hold at 6.3%, while hourly earnings rise 0.1%. The February establishment survey was for a reference week before the Texas freeze, but we will likely see distortions in the household survey.

Seasonal Trends and Weather

The graph below shows the two-year average NSA payroll change for each month. The seasonal impact through the year on payroll changes is mostly positive, but is negative in December, January and July. Distortions of last year’s COVID-19 hit have produced negative averages for March and April now as well. The NSA average rebounded to 859k in February from -3,026k in January, and -288k in December. The red bars show each month’s variance. After a first-half peak in February, variance decreased over the spring before reaching a second-half peak in September.

For disruptions to employment from weather as gauged in the household survey, the biggest disruptions occur in the winter months generally, with the average peaking in February. There is an additional climb through the late-summer months due to disruptive hurricanes in some years. The ten-year average number of people not working as a result of weather climbed to 363k in February from 336k in January, 160k in December, and 107k in November. The extreme cold across the south began mostly after the BLS survey week, but the distortions will likely be captured in the household survey, leaving a potential big hit to this household series.

The Birth/Death Assumption

The average net birth/death effect rebounded to 117k in February, up from -306k in January, -9k in December, and -10k in November. Its annual high typically occurs in April and its annual low in January. After the January low, the month of July marks a summer trough for the average which becomes more volatile in the second half of the year, oscillating between negative and positive territory with a second-half trough in September and a peak in October.

The BLS birth/death assumptions are adjusted each quarter with data from the Quarterly Census of Employment and Wages (QCEW). The QCEW data has been released through 1Q21, and shows a net birth/death effect that was Weaker than assumed in the original monthly report. The QCEW data show a -160k net birth effect for 1Q21, compared to the 24k initial assumption.

Hourly Earnings

We expect a 0.1% rise for February average hourly earnings, after gains of 0.2% in January, 1.0% in December and 0.3% in November, with swings that likely still largely reflect the percentage of lower paid workers in the jobs pool, as seen with the 4.7% surge last April and the 1.0% pop in December. We expect a 5.2% y/y increase in February, which is down from 5.4% in January. Growth in hourly earnings was gradually climbing from the 2% trough area between 2010 and 2014 to the 3%+ area until the economy’s plunge last March. The y/y wage gains will be distorted through 2021 via the comparison effects from last year’s wage spike and ensuing unwind.

The ECI data are designed to avoid distortion from the shift in the composition of jobs that sharply impacted the payroll report’s wage measure. The ECI revealed a 0.7% Q/Q rise in Q4, with a 2.5% y/y gain that exceeded the 2.4% in Q3, versus a 1.4% cycle-low in Q4 of 2009. We saw a 2.6% y/y increase for wages and salaries in Q4 after 2.5% in Q3, versus a 1.4% cycle-low in Q4 of 2011. We saw y/y benefit cost growth of 2.3% in Q4, as seen in Q3, versus a 1.5% cycle-low in Q3 and Q4 of 2009.

Continuing and Initial Claims

Continuing claims fell -366k between the January and February BLS survey weeks after a -551k drop between December and January, and a -767k drop between November and December. Despite setbacks around renewed lockdowns at year end, the economy continues to unwind the 24,912k continuing claims peak in the second week of May. Initial claims fell to 841k in the February BLS survey week from prior BLS survey week readings of 875k in January and 892k in December. We expect a February initial claims average of 785k from 852k in January and 825k in December. We saw a 49-year low for weekly claims of 193k in April of 2019.

The four-week average for initial claims has a strong inverse relationship with the monthly payroll gain. Until the massive claims surge caused by COVID-19, claims had been surprisingly tight relative to the rate of job growth, presumably due to reduced job churn in the latter half of this expansion. This relationship has taken a wild ride since COVID-19, and initial claims won’t be particularly useful for forecasting payrolls until we see how the series match up in the post-pandemic environment.

Click here to access the our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /218233/
via IFTTT

Midweek Market Podcast – March 3

The Market Week – March Week 1

HotForex · The Market Week – March 3rd 2021

The focus of attention once again this week is on the Bond markets, however Treasury prices & yields have stabilized, and volatility has cooled.  The pressure on the USD eased as commodity currencies came off 3-year highs and equity markets recovered.

Unemployment remains stubbornly high globally, and NFP is in focus for Friday with expectations of a 180,000 headline. Last week’s new US unemployment claims beat expectations significantly at 730,000. This week they are expected to tick higher again to 758,000.

The vaccine rollouts continue to gain traction globally – all US citizens will be offered the jab by May 31 – as the signs of the pandemic easing continue, and the WHO reported a fall in cases for a seventh consecutive week. However, the positive vaccine news is tempered by increases in the new variants.

This week FX volatility picked up – the USDIndex tested 90.00, then rallied over 91.20 to start the month before settling around 90.70. EURUSD moved to highs at 1.2240, then down to under 1.2000 before testing 1.2100 once again.  USDJPY held over 106.00 and even tested 107.00 and 6-month highs. For Cable, after a spike over 1.4200 and lows under 1.3900, the psychological 1.4000 remains key.

Global stock markets cooled from all-time highs. The USA500 remained below 3900 and under the 20-day moving average, and even tested below the 50-day moving average at 3825 as worry about valuations and a rise in inflation increased.

Q4 Earnings Season continues to beat to the upside, with over 90% of USA500 companies having reported, 80% of whom reported better than expected results.

The Gold price fell again this week having shown some life last week. The collapse from $1800 pushed to $1707 and 9-month lows as the non-yielding asset continued to be pressured lower. Bitcoin had another volatile week but found support at $45,000 and has since recouped to $50,000.

USOil prices peaked at $63.80, before testing under $60.00 as the cold snap in the southern US disappeared and expectations of more dovishness from the OPEC+ meeting this week cooled.

The yield on the US 10-Year Treasury Note holds over the key psychological 1.000 level and tested 1.6100 this week to post a new 12-month high. The anticipation of the large US stimulus package, record high stock markets, and the spectre of rising inflation are combining to keep yields the main focus of markets.

Click here to access the HotForex Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /218250/
via IFTTT

Negative Correlation of Gold with US Real Interest Rate Starts to Bite the Safe Haven

Europeanmarkets rallied alongside US equity index futures as the recent factor ofbearish pressure - correction in sovereign debt markets and related volatilityof interest rates - faded into the background. The themes of global expansion,bull market in commodities and fiscal impulse in the United States areapparently returning to the forefront.Aftera short period of stabilization, the yields on long-term US and German bondsare on the rise again as local Central Banks stand their ground and refuse tocontain the rise. And no wonder, in fact, in the past few weeks, the dynamicsvery desirable for central banks has been taking place in bonds - real interestrate started to rise as well. This is usually associated with"qualitative" economic growth and increasing productivity. Untilmid-February, the biggest contribution to the growth of nominal rates was madeby inflation expectations, which could have worried the Central Bank, but thenthe real rate joined the party and immediately soothed concerns. By the way,this is why gold also collapsed, since an increase in the real rate means anincrease in gold’s opportunity costs:Gold has negative correlation with US real interest rate and therefore tend to decline when the interest rate starts to rise.Although the real rate has risen, it is still deep in the negative zone. It is at a historic low. It has a room to rise more. There are expectations that the rate will continue to rise, since it is believed that global economy is in the initial phase of upturn and related trends in the government bond markets can only start to emerge as well. This should have a negative impact on the Gold’s investment appeal for at least the next quarter or two.The European STOXX 600 Index rallied for the third trading session in a row, and British assets reacted optimistically to the government's decision to extend payments to those who lost their jobs as a result of lockdowns.The data on retail sales and unemployment in Germany made sad adjustments to the expansion story. The forecast for growth of the key item of consumer spending did not materialize - sales fell by 4.5% in monthly terms, against the forecast of +0.3%. It was also expected that the number of unemployed will decrease by 13K, but the number of unemployed, on the contrary, has increased. There has been another mini-shock in expectations for the largest EU economy, which paints an unclear outlook for European assets. European stocks are ignoring the worsening data so far, but for how long? The Bundesbank in its report on Wednesday said it expects a marked decrease in economic activity in the first quarter.The European currency has experienced difficulties in growing amid negative data and the strong economic outlook for the United States undermines the idea that the dollar will weaken on the upcoming growth in the money supply in the United States due to fiscal stimulus, as an inflow of investors in US assets due to expectations of higher expected returns could start to counterbalance the supply factor.The US labor statistics on Friday will provide more information on the speed and direction of the US economic recovery, but one should closely monitor the emerging trend in the US, as it has every chance of developing into a medium-term strengthening.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/negative-correlation-of-gold-with-us-real-interest-rate-starts-to-bite-the-safe-haven
via IFTTT

Apple ahead of its Spring update

APPLE, Daily

Apple, an American company founded in the 1970s, represents itself as a great example of the American dream with many success stories. The company has at least two key months every year, usually September and March. Last September, everyone was waiting for the new iPhone, which is the company’s main product and stock mover; however, the company could prove that its services can also bring in high income for them.

On October 23, 2020, the new iPhone with 5G support was introduced, and even though at the beginning the market reaction was not overly positive, in the time since the 14th-generation iPhones, which have improved cameras, speedier processors and a new design, have started to convince iPhone lovers that they are different than previous models and not simply repeating the same cycle that has been seen since the iPhone 6.

The highest share price of $145, seen on 25 January, marked a 24.7% gain since the October product announcement, and even with the correction that started on the same day, the Apple share price at the current level ($125.17) shows a 7.6% gain. The question is that with the success of the iPhone 12 reaction, what will be the next big growth driver for Apple stock for 2021?

In the latest earning report on January 27, results were much better than expected. According to company reports, EPS on sales of $111.44B was $1.68. On a year-over-year basis, Apple earnings rose 34% while sales climbed 21%. In the December quarter, iPhone revenue gained 17% by rising to $65.6B, supported by the launch of the iPhone 12 series. However, the best sales were on iPad tablets with a 41% gain to $8.4. In short, Revenue was up 21% and EPS up 35% to new records. iPhones, Wearables, and Services set new revenue records.(1) We are now in March and waiting for new product announcements for new iPad Pro tablets, new AirPods wireless earbuds, and AirTags tracking devices, which could be the next growth potential of the stock price in the market.

Apple’s Wearables, Home and Accessories unit (Apple Watch, AirPods wireless earbuds, and Beats headphones) with a 30% gain had a $13B revenue for the company in the December quarter. (2)

On the other hand, according to reports that have been circulating for what seems years now, the company is trying to get significantly involved in the burgeoning Electric Vehicle (EV) market, which could be another market mover for them. Hyundai, Nissan and a number of other automakers have been mentioned as potential partners.

Apple’s spring event for the year 2021 is expected to be online due to COVID-19 limits; however, the exact date has not yet been revealed.

Technical review – Daily

In the daily chart, the technical indicators are mostly supporting the lower prices, while RSI and MFI, both at 40, confirm the EMA crossing strategy downtrend. PP sits at $126.50, while R1 at $129.40 is more likely to be a key lever for an uptrend, while below the current level, S1 shows at $124.30, and S2 sits at $121.05.

1- https://www.apple.com/newsroom/2021/01/apple-reports-first-quarter-results/
2- https://www.apple.com/newsroom/2021/01/apple-reports-first-quarter-results/

 

Click here to access the our Economic Calendar

Ahura Chalki

Regional Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /218221/
via IFTTT

After Monday’s good data, the service sector PMIs also give hope to the economy

Last February, we talked about good data from Germany in relation to last year's German GDP, and good data in relation to the German investor confidence for the next six months, March has begun with positive news regarding the macroeconomic factors.

On Monday we learned of positive data regarding the manufacturing PMIs in both Europe and the United States, and today we have also seen positive results in the service sector PMIs.

Manufacturing PMIs provides information on the economic activity within the manufacturing sector, where a result above 50 indicates expansion and growth of this industry. On the contrary, a figure below 50 is considered negative, meaning the economy in this sector is contracting.

Specifically, the manufacturing PMIs exceeded both market expectations and the data of the previous month for Spain, France, Germany, the United Kingdom, and the United States. Italy was the only negative in this dataset, with a result slightly lower than expected by the market consensus, although higher than the previous month's data.

For its part, the service sector PMIs measures economic activity through purchases. As in the manufacturing PMI, a reading above 50 is considered positive suggesting good future prospects, while a reading below 50 is considered negative.

This data has been positive in Spain, Italy, France and in the eurozone as a whole, although Germany’s results were not only lower than expected by the market consensus, but it has also been worse than the previous data. The UK also performed slightly worse than expected, and data from the US will be released this afternoon.

Despite these good results, the Euro is currently down slightly more than 0.10% against the US dollar, leaving for the moment the monthly variation practically flat.

Technically speaking, if we look at the H4 chart in the EUR/USD, we can see how in recent weeks the trend has been downward after marking annual highs on January 6 at 1.23492 until losing the level of 1.20, marking lows on February 5 at 1.19521. From that moment, this pair moved within a bullish channel until its break on February 26, which led it to bounce back at the 1.20 level to make a pullback to the lower band of the channel.

After this last movement, it is important to observe if the price is able to recover this level and exceed its average of 200 in red in order to resume the uptrend or if, on the contrary, it bounces down, seeking again the annual minimums.

Source: H4 chart of EURUSD from Admiral Markets MetaTrader 5 platform from December 10, 2020 to March 3, 2021. Taken on March 3 at 12:15 CET. Note: Past performance is not a reliable indicator of future results, or future performance.

 Price evolution of the last 5 years:

• 2020 = + 8.93%
• 2019 = -2.21%
• 2018 = -4.47%
• 2017 = + 14.09%
• 2016 = -3.21%

With the Admiral Markets Trade.MT5 account, you can trade Contracts for Differences (CFDs) of the AUR/USD and more than 3000 stocks! CFDs allow traders to try to profit from the bull and bear markets, as well as the use of leverage. Click on the following banner to open an account today:

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

from Trader`s Blog https://admiralmarkets.com/analytics/traders-blog/service-pmi-data
via IFTTT

US Manufacturing Hits 3-Year High

Manufacturing Improves Again The recent spate of better-than-expected US data continued yesterday with the ISM manufacturing reading for February printing a three year high at 60.8. This marked an extension from the prior month’s and expected 58.7 reading and marked the highest level since February 2018. The data, which comes on the back of several positive January readings, offers strong evidence of the continued recovery in the US economy.Fiscal Boost Notably, the improvement in last month’s factory sector performance comes despite the global semiconductor shortage which has come into sharp focus recently. The shortage has slowed down production at automobile plants and other manufacturers. However, with the economy receiving a boost recently from the $900 billion in stimulus agreed before Christmas, the recovery is making firm headway.Consumer Demand Still High Looking at the breakdown of the data, the uptick in manufacturing is being primarily driven by strong demand for electronic goods and furniture, Over the course of the pandemic, demand for these items has been increasing steadily with so many people forced to work from home as a result of the restrictions and lockdowns in place across parts of the US.Producer Prices Surging HigherOne negative aspect, however, is that the pandemic has caused a sharp increase in supply chain costs. The index of prices paid by manufacturers for raw materials and components was seen rocketing higher to 86 last month the highest level since July 2008. The uptick in producer prices is adding to the rising US inflation expectations as traders speculate building price pressures will coincide with the reopening of the economy on a large scale over Q2 forward leading to a surge in consumer prices.Inflation Expectations Rising Last month, data showed that consumer’s inflation expectations had surged, with US treasury yields rising higher also. This has been consistent with a growing view in the market that inflation is likely to spike higher in the coming months, especially if the president’s $1.9 trillion stimulus plan is approved, with the risk that the Fed will be forced to removed easing ahead of schedule. While the Fed has publicly pushed back against this view, downplaying these fears, yields have been continuing to rise, suggesting that the market is not in agreeance with the central bank on this.Technical Views US10YThe yield on the 10-year note spiked above the 1.50 level last week where it met selling interest and returned lower. Currently, yield is hovering around the 1.42 level, keeping the bull phase intact. While price holds above the 1.28 level, the focus is on a continuation of the current move, targeting the 1.68 level next.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/us-manufacturing-hits-3-year-high
via IFTTT

US & EU Launch Co-Ordinated Sanctions Against Russia

US/Russian Tensions Rising Global geo-political tensions are on the rise again this week with news that President Biden has approved fresh sanctions against Russia over the poisoning of Russian opposition leader Alexei Navalny. The measures, which come as the result of a US intelligence assessment, have been applied against seven government officials and 13 Russian corporates under the terms set out by the 1991 Chemical and Biological Weapons Act. Launched in a co-ordinated move along with fresh EU measures, the actions also represent an extension of those already in place against some Russian officials following the attack on Sergei Skripal and his daughter which took place in 2018 in the UK.Under the new measures, the figures involved will have any US property, dealings of finances blocked and anyone dealing in transactions with those individuals could also face sanctions. Some of the figures involved are very high ranking such as the director of the FSB as well as two deputy ministers of defence.Russia Denies Involvement The Russian administration, including Putin himself, have consistently denied any involvement in the nerve agent attack on Navalny which occurred during a Siberian flight in 2020. The nerve agent used was the same used in the attack on Skripal in the UK in 2018 which a US intelligence assessment has linked back to Moscow and the Russian administration.Biden Taking Firmer Stance As with China, Biden has vowed to take a hard stance against Russia. One of his big criticisms of the Trump administration was that it was too soft on Russia. Indeed, there was plenty of speculation regarding links between Putin and Trump. However, following a call with Putin last month, Biden said that the era of the US "rolling over in the face of Russia's aggressive actions, interfering with our elections, cyber-attacks, poisoning citizens are over".Awaiting Russian ResponseWhile Russia has yet to officially respond to the US sanctions, a member of the country’s foreign ministry office tweeted for the US to “stop playing with fire”. Ahead of the sanctions being announced, Russian Foreign Mnister Sergey Lavrov said that Russia would definitely respond to any sanctions saying that “reciprocity” is one of the key rules of the Russian administration. For now, the market awaits the next step in this situation.Technical ViewsUSDRUBUSDRUB has been trading in a bear channel since the failure at November 2020 highs. However, the downtrend has been held up at the 72.66 level support which has proved to be a tough downside barrier for the pair. While the channel remains intact, the bias is towards an eventual break lower targeting the 70.46 level next. Bulls need to break above the 76.13 level to adjust this view.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/us-and-eu-launch-co-ordinated-sanctions-against-russia
via IFTTT

Market Update – March 3 – Cautious ahead of Powell and OPEC

Trading was consolidative and quiet Tuesday as the markets took stock of recent activity. A lack of fresh catalysts also limited action. There was some jostling in stocks late after Texas announce it is opening up the state economy 100% and removing the mask mandate. US Government suggested that vaccinations could be rolled out quicker than initially expected and after Fed’s Brainard indicated that volatility in bond markets could further delay the turnaround on asset purchases. Stock markets moved broadly higher, leaving JPN225 and ASX up 0.5% and 0.8% at the close, while Hang Seng and CSI 300 are currently posting gains of 2.2% and 1.6% respectively. GER30 and UK100 futures are up 0.5% and 0.6% respectively, US futures are also broadly higher, with a 0.8% rise in the USA100 leading the way. Vaccine optimism and the push back from central bankers against the rise in yields has helped to stabilise sentiment and ease concern over cliff edge scenarios on growth.

Optimism on the outlook remains very supportive, especially with more vaccines on the way and another big stimulus injection on the horizon. Recent data are supporting that point of view with many revising up Q1 and 2021 growth projections. Treasuries have stabilized too which has helped calm jitters regarding the bearish impacts on stocks from rising rates, and over worries inflation pressures will pick up and cause the FOMC to pullback accommodation sooner than expected.

Forex Market

EUR – close to its 20-day moving average at 1.2085
GBP – ranging between at 1.3850-1.4000.
JPY –  at 106.86, retesting 107.00 for a 3rd day in a row.
AUD – reversed nearly 40% of last week’s dip.
CAD – down to 1.2616 from 1.2730.
GOLD – declines further below 50-day EMA, and 8-month Support.
USOil – edged up to $60.10 per barrel, amid growing conviction that the OPEC+ alliance is poised to agree an increase in output this week.

Today: Calendar includes final readings for Eurozone and UK services PMIs for February, which are expected to confirm levels in contraction territory as the sector remains depressed by virus measures. UK Chancellor Sunak will present his budget proposal today, with reports already out indicating that furlough measures will be extended until September, although the Chancellor also seems eager to find ways to finance crisis measures. Also on tab are the ISM Service for February for US along with ADP employment data.

Biggest mover – GBPJPY (+0.37% as of 09:30 GMT)

Click here to access the our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /217552/
via IFTTT

Dollar Edges Lower; Sterling in Focus Ahead of Budget

from Forex News https://www.investing.com/news/forex-news/dollar-edges-lower-sterling-in-focus-ahead-of-budget-2435521
via IFTTT

Daily Market Outlook, March 3, 2021

Daily Market Outlook, March 3, 2021 Signs of stabilisation in government bond markets after last week’s sell-off have provided support for risk sentiment this week, as markets refocused on hopes for a vaccine-led global economic recovery. Following positive outcomes in Europe and on Wall Street, Asian equity markets were higher.The priority for UK Chancellor Sunak’s Budget (from about 12.30pm) is to continue supporting the economy, especially given the PM’s cautious roadmap out of lockdown. Some measures have already been pre-announced, including an extension of the furlough scheme until the end of September (with government contribution to wages falling from July) and more support for the self-employed. There will also reportedly be £5bn worth of grants to help businesses reopen in sectors such as hospitality and retail, and £400m for the arts sector. Businesses will be watching to see whether the business rates holiday and temporary VAT reduction for some sectors will be extended. The stamp duty holiday may be extended. The Chancellor has also indicated that he will ‘level’ with the public about putting the government’s finances on a more sustainable footing, given the surge in government borrowing over the past year. There is speculation of future tax rises, including potential increases in corporation tax and the freezing of income tax thresholds. Forecasts for economic growth and the public finances will be closely watched, but the medium-term outlook remains subject to significant uncertainty.Key data releases include the final readings for UK and Eurozone services PMI, which are expected to confirm preliminary outturns of 49.7 and 44.7, respectively. Eurozone services activity is much further below the key 50 level than the UK, partly reflecting the slow vaccine rollout.There will be a keen eye on the US ADP employment report ahead of Friday’s ‘official’ payrolls data as well as the ISM services survey. Look for February ISM services to continue to signal robust growth at 58.0, slightly lower than 58.8 in the prior month. The US labour market, however, appears slow to respond to economic growth, look for ADP private payrolls to rise by 160k, lower than outturns last autumn. Fed officials have appeared relatively relaxed about the recent rises in bond yields, seeing it as a reflection of economic recovery, a view echoed by the Bank of England’s Deputy Governor Ramsden. Others, including the ECB, have voiced more concern about them rising too quickly. A number of policymakers from the Fed and the ECB are due to speak today. The BoE’s Tenreyro is scheduled to discuss negative interest rates at an IMF seminar.G10 FX Options Expiries for 10AM New York CutEUR/USD: Mar03 $1.1900(E1.0bln), $1.2000(E1.4bln-EUR puts), $1.2150-60(E1.0bln), $1.2300(E1.0bln)USD/JPY: Mar03 Y105.40-60($2.1bln); Mar04 Y105.60-75($1.5bln); Mar05 Y105.45-50($1.2bln), Y106.40-60($1.4bln); Mar08 Y104.25-40($2.8bln), Y105.50-55($1.7bln)EUR/GBP: Mar03 Gbp0.8600(E1.9bln-EUR puts)NZD/USD: Mar03 $0.7300(N$1.1bln-NZD puts)USD/CAD: Mar05 C$1.2500-20($1.0bln), C$1.2620($1.0bln)USD/CNY: Mar08 Cny6.45($1.5bln)Technical & Trade ViewsEURUSD Bias: Bullish above 1.20 bearish belowEURUSD From a technical and trading perspective, the closing breach of 1.21 and the descending trendline is a bullish development opening a retest of prior highs at 1.2350, only a move back through 1.20 would suggest further downside opening a potential test of 1.17 yearly pivotFlow reports suggest topside offers 1.2180-1.2220 level with weak stops above the level and increasing on any push above the 1.2250 level with possible strong offers into the 1.2300 level Downside bids into the 1.2000 area with weak stops likely on a move through to the 1.1980 area congestion around the sentimental 1.1950 area before stronger bids are likely into the 1.1900 levels.GBPUSD Bias: Bullish above 1.3750 targeting 1.44GBPUSD From a technical and trading perspective, as 1.40 now acts as support bulls will target a test of 1.44 as the next upside objective. Below 1.40 opens a retest of 1.3750 pivotal trend support.Flow reports suggest downside bids into the 1.3850 area with likely weak stops on a move through before stronger bids likely into the 1.3800 level and increasing congestion possible to the 1.3750 area before weakness reappears to the downside, topside offer light through the 1.3900 level and 1.4000 with limited sentimental offers before weak stops appear and the market likely to be weak through to close to 1.4100 where the market sees stronger offers.USDJPY Bias: Bullish above 104.50 targeting 107USDJPY From a technical and trading perspective, as 104.50 supports there is potential for a further squeeze higher to test offers towards 107. A loss of 103.50 would negate further upside and suggest a resumption of trendFlow reports suggest topside offers through the 106.90 area increasing through the 107.00 level with weak stops likely on any break of the 107.20 areas with more offers into the 107.50 level. downside bids light through the 106.00 level and weak stops on a breakthrough the 105.80 area and limited congestion through to the 105.00 areas where stronger bids appearAUDUSD Bias: Bullish above .7560 bullish targeting .8000AUDUSD From a technical and trading perspective, as the major trendline support at .7560 now acts as support, look for target wave 5 upside objective towards .8000. A closing breach of .7730 of the internal descending trendline will encourage the bullish thesis.Flow reports suggest downside bids into the 0.7700 area and likely to be strong however, weak stops through the 0.7680 area with the market likely only to open a short distance before stronger bids again appear and the market struggles for any further downside movement, Topside offers light through the 78 cents level with weak stops likely above the level and the 79 cents level then likely to open quickly and very little to curb the push.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-march-3-2021
via IFTTT