In the last part of yesterday’s session the EURUSD shot up, closing with a 0.35% appreciation at 1.2089. Today, after opening in1.2084, the EURUSD rose, reaching the level of 1.2112 on two occasions, but continues to oscillate around the POC and VWAP,close to 1.2086. Although the references indicate a probable drop in the value of EURUSD, in Payroll week the assettends to rise the day before and fall the day.

Good news about vaccines and greater fiscal stimulus is injecting optimism into the financial market. During the night, theMSCI Asia Pacific index added 1.3%, while Japan’s Topix index closed 0.5% above. In Europe, the Stoxx 600 Indexgained 0.5% at 5:50 am Eastern Time, with banks among the best performers. The S&P 500 futurespointed to a lot of green at the opening, the 10-year Treasury yield was at 1.445%, oil rose and golddropped down.

DXY is being traded at the level of 90.9 thousand points, with appreciation. The USDJPY is oscillating close to 107.0 and the USDCHFof $ 0.9174. Gold is trading at $ 1,723 an ounce, and silver at $ 26.6 an ounce.

The main factors considered by investors for their decision making at the moment are:

COVID-19:

While Texas Governor Greg Abbott announced that he was lifting some restrictionsanti-pandemics, such as the mandatory use of the mask in public places, US President Joe Biden has warnedthat the battle to defeat the virus is far from over and stated yesterday that by May 2021 allAmerican adult will have received at least the first dose of the vaccine and that in 1 year the country will be able to return to normal. He announced that Merck will help manufacture the Johnson & Johnson single-dose vaccine. Biden askedthat state and local governments prioritize vaccination for teachers and caregivers of children, so thatschools reopen safely, with full-time classes, by the end of this month. The number of diagnosesCOVID-19 diaries in the U.S. dropped to less than 50,000 for the first time since October 2020.

Japanese Prime Minister Yoshihide Suga said that the emergency situation established in the region ofTokyo, scheduled to expire on March 7, can be extended for another two weeks, to control therate of infections, which have slowed, but not as fast as some officials expected.o Brazil reported a record daily number of deaths as the resurgence of the virus fills the beds ofhospitals and pressures local governments to demand more drastic measures to contain the contagion

FISCAL POLICY:

US senators today begin the debate on the approval of the stimulus package$ 1.9 trillion budget, with majority leader Chuck Schumer saying he has enough votes to approve it.Schumer will need the support of all 48 Democrats, the two independent senators who agree with them, andVice President Kamala Harris also voted to approve the package before March 14, whencurrent benefit payments. How Republicans would need to withdraw just one Democratic vote to reshapesome provisions, the final form of the project remains uncertain. The version of the bill approved by the Chamberwould pay for vaccines and medical supplies and send a new round of emergency financial aid to families,small businesses and state and local governments. Includes US $ 1,400 in direct payments to individuals, insurance$ 400 weekly unemployment until August 29, 2021 and help for those who have difficulty paying rentand residential mortgages during the pandemic. As soon as the Senate votes on the package, possibly by the end of this week,the House will have to sign it one last time before sending it to Biden for it to be made into law. The leader of themajority in the House, Steny Hoyer, said the final vote would come next week.✓

MONETARY POLICY:

The issue of liquidity is coming up again, warned a report by the Bank of InternationalETFs Settlements – or Exchange Traded Funds, published this week. FED Governor Lael Brainard saidon Monday that vulnerabilities in the Treasury market warrant careful analysis. Although bankscentral banks have become an important source of liquidity in recent years, there are also signs that they areless willing to intervene in the next periods of tension.✓

MACROECONOMY:

Producer prices in the Eurozone increased by 1.4% in January 2021 compared to the previous month, abovemarket forecasts of 1.2%. It is the biggest gain in the PPI since January 2006. Year by year, pricesstagnated.o Mortgage applications in the United States increased 0.5% in the week ending February 26, afterthree consecutive periods of declines due to rising mortgage rates. Refinancing ordersof a home loan were 7% higher than a year ago; and those to buy a homeincreased by 1% in the same comparison. The average interest rate for 30-year mortgages increased by 0.15 pointspercentage, to 3.23%, the biggest weekly increase since March last year.

OTHERS:

Bitcoin rose more than 5%, to a record high, above $ 58,000, after companies like Tesla andMastercard said they were adopting the cryptocurrency. Nigeria is the third country in the world in terms ofnegotiations between people, behind the United States and Russia. Since 2020, Nigeria has been suffering from fallingdemand and the price of oil, the main factor in its GDP. As a consequence, foreign exchange reserves fell and inflationshot. The government devalued the local currency and limited international transactions with foreign currency and accessto the dollar at US $ 200 per month for each citizen – something similar to what happens in Argentina. Digital assets, in addition tohelp protect assets, still function as a means of making international money remittances. THENigerian model shows a very interesting suitability of cryptocurrency and maybe even a glimpse of what will be thefuture, especially in economically unstable countries

Highlights

In yesterday’s session the EURUSD closed with a drop of 0.22%, very close to the POC, which was at 1.2042. Today, after openingin 1.2049, EURUSD fell to the level of 1.1994, from where it quickly returned to the POC and VWAP region, close to1.2020. Today, before the opening of the North American market, EURUSD was operating in a slight decline. Most of the referencesare close to 1.2020.

EURUSD fluctuates under pressure, after economic data shows that German retail sales have fallen for the second monthconsecutive January, and at a faster than expected pace, and that the level of unemployment in Germany and Spainincreased in February. However, Christine Lagarde promised yesterday that financing conditions will no longer berestrictive prematurely, ensuring that European businesses and families will have access to the finance they needto face this crisis.

HSBC published a note stating that “In the past two years, EUR / USD movements have been much more associated withother investment flows. Foreign exchange hedge flows have become more important and may remain so in the futurepredictable. The euro is likely to rise against a weaker dollar in 2021, given that US monetary conditionswill remain loose and risk appetite will remain more supported. However, if US short-term interest ratesstart to move more, or the long-term yield differentials become much more considerable, we maysee a more persistent recovery of the US dollar ”. The note points to a short-term resistance at 1.2062. TheCredit Suisse said it works with a 1.1800 low outlook at the end of November 2021.

DXY is being traded at the level of 91.1 thousand points, with appreciation. The USDJPY is oscillating close to 106.9 and the USDCHFof $ 0.9176. Gold is trading at $ 1,730 an ounce, and silver at $ 26.3 an ounce.

The main factors considered by investors for their decision making at the moment are:

• COVID-19:
• The number of new coronavirus infections increased globally last week for the first time inseven weeks, the World Health Organization said on Monday: it is too early for countries to trustvaccination programs and abandon other measures.
• European Commission President Ursula von der Leyen acknowledged to the Financial Times that she and her colleaguesunderestimated the complexity of the vaccination campaign against COVID-19 in the block and that only insecond quarter of 2021 the campaign will achieve planning, as the supply ofvaccines, which was recently renegotiated, will be reinstated. The Czech Republic’s hospital system ison the verge of collapse. With 10.7 million inhabitants, the country has 150 thousand people infected at the moment,of which almost 1,600 are in serious condition. In Italy, the new government should seek greater fiscal incentives,probable 32 billion euros, as the country’s economy remains far from returning to normal. At Germany, where unemployment rose for the first time in eight months this February, leaders are understrong pressure to seek a way to resume the economy with the pandemic under control. The lockdown oncountry should extend until March 28. The government of Spain has decided to prolong its current restrictions onnon-essential travel from countries outside the European Union by 31 March. China has set a target ofvaccinate 40% of its population by the end of June. So far only 3.5% of Chinese have been vaccinated, despitethe most populous country in the world recorded only 11 new cases of COVID-19 yesterday. In Israel, whichmanaged to mount an efficient vaccination campaign, more than 51% of the population took at least onedose and almost 37% took two.
• Among the new variants of the coronavirus, two stood out especially: B.1.1.7, identified by the firstBritain, which demonstrated the power to spread quickly, and B.1.351, from South Africa, which candodge human antibodies, decreasing the effectiveness of some vaccines. Now a third variantbegins to worry: P.1, identified in Brazil, discovered in late December. Three studies are concludingthat the power of this variant is different from the others: the ability to infect people who had already createdimmunity through previous Covid-19 exposures, and to weaken the effect of the Chinese vaccine onuse in Brazil. The new studies have not yet been published in scientific journals. Its authors warn thatdiscoveries have only begun to understand the behavior of P.1. “The findings apply to Manaus,but I don’t know if they apply to other places, ”said Nuno Faria, virologist at Imperial College London who helpedconducting much of the new research. P.1 is spreading across the rest of Brazil and has already been foundin 24 other countries. Experts reiterate that masks and social distance can work against P.1.And vaccination can help both reduce transmission and protect infected people from evolving into casesserious
• FISCAL POLICY:
• US Senate voting on the $ 1.9 trillion package is due to begin on Wednesday.
• MACROECONOMY
• Eurozone consumer price inflation is expected to remain stable at 0.9% in February 2021compared to the previous year, in line with market expectations. Energy prices are expected to falla smoother pace (-1.7%), and rising in services (1.2%), non-energy industrial goods (1.0%) and food,alcohol and tobacco (1.4%). The core of annual inflation, which excludes volatile prices for energy, food, alcohol andtobacco and for which the ECB analyzes its policy decisions, is expected to decelerate to 1.1% in February.
• Retail sales in Germany fell 4.5% in January 2021 compared to the previous month, due to thepartial closure of commercial activities in the country since December 16. Compared to Februaryby 2020, sales were 5.8% lower. Sales of non-food products decreased by 16.4%,especially textiles, clothing, footwear and leather articles (-76.6%) and furniture, appliances and materialsconstruction (-43.2%). On the other hand, sales increased by 4.3% in food, beverages and tobacco, whileInternet and direct mail sales grew 31.7%.
• The number of unemployed in Germany increased by 9 thousand, to 2.752 million in February 2021, inline with market expectations, of a reduction of 13 thousand. The unemployment rate remained unchangedby 6.0%

No final EURUSD session yesterday was withdrawn, recovering all the appreciation that took place throughout the day. The asset opened at 1.2163, reached 1.2243 and closed at 1.2176. For much of the day, the asset fluctuated outside the ends of the ATR, both above and below. The day’s POC stood at 1.2226 and the VWAP at 1.2202. Today, before the opening of the North American market, EURUSD was operating in decline after opening at 1.2158 and falling to the level of 1.2090, below the day’s ATR Down.

DXY is being traded at the level of 90.7 thousand points, with appreciation. The USDJPY is oscillating close to 106.3 and the USDCHF of $ 0.9058. Gold is trading at $ 1,760 an ounce, and silver at $ 26.8.

DXY is being traded at the level of 90.7 thousand points, with appreciation. The USDJPY is oscillating close to 106.3 and the USDCHF of $ 0.9058. Gold is trading at $ 1,760 an ounce, and silver at $ 26.8.

The rise in US Treasury bond yields, driven by expectations of a strong economic recovery driven by more fiscal stimulus, low interest rates and an efficient vaccination program against COVID-19, has been provoking USD appreciation. The yield on the 10-year bond reached 1.61% pa in the last few days.

The rise in US Treasury bond yields, driven by expectations of a strong economic recovery driven by more fiscal stimulus, low interest rates and an efficient vaccination program against COVID-19, has been provoking USD appreciation. The yield on the 10-year bond reached 1.61% pa in the last few days.

Today the market follows the release of data on personal earnings and expenses in the USA; on inflation and growth GDP in France. And in particular, the US House vote on the $ 1.9 trillion aid package.

The main factors considered by investors for their decision making at the moment are:

• COVID-19:
  • There are already 2.5 million fatalities worldwide, with more than 113 million diagnoses. In the USA, The FDA is due to authorize the distribution of Johnson & Johnson’s single-dose vaccine today. The Biden government comes striving to contain the pandemic through the vaccination campaign, and today there are more Americans immunized by the vaccine than diagnosed with COVID-19 (so far, 68.3 million doses have been administered, with an average of 1.31 million doses applied per day). Gathered virtually yesterday, the 27 leaders of the Union European Union agreed to maintain “tough restrictions” on the free movement of people and goods as the bloc acts to combat the pandemic. “We need to prepare for a reality in which we are going to need continuous vaccination, perhaps for years, due to new variants of the coronavirus, “said German Chancellor Angela Merkel. Although infection rates are declining in most parts of the EU, there are fears of new peaks as new ones variants spread quickly. The summit president said that the bloc wants “more predictability and transparency “of pharmaceutical companies that failed to deliver contracted volumes of vaccines, placing at risk the EU’s goal of immunizing 70% of its adult population by September 2021. The Commission and EU countries have been criticized for errors in the joint immunization program and for the irregular arrival of doses. During the meeting yesterday, leaders discussed a passport system for vaccinated against COVID-19, which could facilitate air travel, helping several economies in the bloc, especially in southern Europe, where tourism is a fundamental part of economy, to avoid a repeat of last year’s weak summer vacation season. The European Commission scolded Germany, Belgium, Hungary, Denmark, Sweden and Finland earlier this week for closing borders to neighbors within the EU’s free movement area, in an attempt to curb the spread of the pandemic. Instead of resort to unilateral closings, the EU executive body is pressuring member states to stick to the rules established within the bloc, based on specific risk assessments shared by countries.
• FISCAL POLICY:
  • The US House is going to vote today on the $ 1.9 trillion stimulus plan, but a Senate official announced that raising the minimum wage to $ 15 is unlikely to be included (the proposal is to increase the federal minimum wage from $ 7.25 to $ 15 an hour over four years – the $ 7.25 hourly floor does not increase since 2009). The Democratic-controlled House is expected to approve the bill, which includes $ 1,400 in payments direct payments, a weekly bonus of $ 400 for the unemployed, a child allowance of up to $ 3,600 for one year, in addition to billions of dollars to reinforce the vaccination campaign against COVID-19. This would be the sixth round of aid from the federal government in this pandemic.
• MACROECONOMICS
  • In France, GDP in 4Q20 shrank 1.4% compared to the immediately previous quarter, due to the imposed blocks to contain the pandemic. Household consumption fell 5.4%, public spending fell 0.3% and fixed investment grew 1.1%. Both foreign trade and changes in inventories contributed positively to GDP growth. In relation to 2019, the economy contracted 4.9% in the 4Q and 8.2% in the year whole.
  • Still in France, the annual inflation rate fell to 0.4%, with manufactured goods prices falling 0.5%, services grew 0.7% and food grew 0.8%. The monthly inflation rate fell 0.1% in February 2021.
  • Also in France, the number of unemployed in January 2021 decreased by 33.1 thousand in relation to the month previous. Compared to the same month of the previous year, the number of unemployed people increased 286.4 thousand
  • Personal income in the USA increased 10% in January 2021 compared to the immediately previous month. It was the biggest gain recorded since April 2020, due to an increase in government social benefits, through of the CRRSA (Coronavirus Response and Relief Supplemental Appropriations Act) Act. Personal spending in the USA increased 2.4% in the same comparison. It’s the biggest increase in consumer spending since June, driven by recreational products and vehicles (namely, information), as well as food and beverages, food and lodging services and health care (especially outpatient services). In contrast, declines were seen in housing spending and utilities (mainly electricity and gas).
  • Still in the USA, consumer inflation in January 2021 increased 0.3% in relation to the month immediately previous. Commodity prices rose 0.7%, services prices decreased 0.2%. In the annual comparison, both prices advanced 1.5%.
  • ACTIONS
    • Frankfurt’s DAX 30 was down 0.1% this morning, in the same direction as other European markets, with investors worrying about rising US Treasury yields, which could lead banks to governments and governments to tighten monetary policy and reduce fiscal stimulus earlier than expected. On the corporate front, Deutsche Telekom’s profits increased with higher revenue, and BASF said it expects profits to recover in 2021. In the US, after a big drop in the previous session, investors continue to digest prospects for an increase in economic activity and an increase in inflation and assess the impact this will have on companies. Rightmove, which runs Britain’s largest online real estate portal, said it expects a robust market activity this year. British Airways owner IAG reported a record loss of € 7.4 billion in 2020.

EURUSD starts the month and week falling, maintaining the volatility seen in recent weeks. In the coming months, the asset it should move towards levels above 1.23, and may extend up to 1.25, despite the fair value of the pair being close to 1.15. Obviously there will be strong resistance to reaching such high levels, but it is possible. Right now, the skyrocketing yields on US treasury bills are pulling the EURUSD value down. The 1.19 level is almost certain will be achieved, and despite all the noise that the EU’s slow COVID-19 vaccination program will continue together with others related to fiscal and monetary stimulus, this market offers good opportunities for profits.

Today, investors remain cautious, waiting for the pronouncements of several ECB officials, including the President Christine Lagarde, to check the possibility of an increase in the pace of securities purchases by the Institution. In the USA, the $ 1.9 trillion fiscal stimulus package was approved by the House in the early hours of last Saturday, and now all the attention turns to the Senate vote. This Friday has Payroll disclosure. The market is estimating an increase of 165 thousand job vacancies, which would keep the unemployment rate unchanged at 6.3%.

In last Friday’s session the EURUSD opened at 1.2176, reached 1.2062 and closed at 1.2074 with a fall of 0.84%, below the Day’s ATR Down of 1.2114. The day’s POC stood at 1.2153 and the VWAP at 1.2134. During the week, assets accumulated a drop of approximately 0.20%. Today, before the opening of the North American market, EURUSD was operating in decline, after opening at 1.2091 and fall to the level of 1.2035. With a good part of the references today above 1.2070, the risk-return opportunities perform well.

DXY is being traded at the level of 91.0 thousand points, with appreciation. The USDJPY is oscillating close to 106.7 and the USDCHF of $ 0.9138. Gold is trading at $ 1,739 an ounce, and silver at $ 26.8 an ounce.

The main factors considered by investors for their decision making at the moment are:

• COVID-19:
• In Europe, Italy must increase restrictions on the movement of people and goods to contain the strain first found in the UK. Norway will close restaurants and shops, and Finland has unleashed a emergency state. France has signaled that it needs another four to six weeks to start easing measures restrictive. The UK is tracking a person infected with the Brazilian variant of the coronavirus who, according to authorities, may be more resistant to vaccines. 6 cases of this strain have already been identified in the country. Germany reached the highest rate in daily diagnostics in almost three weeks, but even the finance minister is asking for a faster reopening of the economy. Merkel and the prime ministers are due to meet on Wednesday to evaluate a possible relaxation of restrictions.
• FISCAL POLICY:
• Joe Biden’s government took its first big step this weekend with the approval of the $ 1.9 trillion package by the House of Representatives. No Republicans voted in favor. Now the package will be voted in the Senate.
• In the UK, companies reported in IHS Markit / CIPS UK Manufacturing PMI an improvement in demand from various markets – including the USA, Asia, Scandinavia and (in some cases) continental Europe. Optimism business reached its highest 77-month high in February, with more than 63% of companies reporting that expect production to be higher within a year. The positive feeling was linked to the recovery pandemic, the reopening of the global economy (including less transportation restrictions) and uncertainties reduced Brexit.
• ACTIONS:
• Dow Jones futures opened the month rising more than 300 points, with Treasury yields starting to fall with the approval of the $ 1.9 trillion stimulus plan. Last week, the Dow Jones it lost 1.7%, the S&P 500 2.5% and the Nasdaq 4%.

In yesterday’s session, EURUSD, which opened at 1.2150, closed with a 0.12% appreciation at 1.2164, after reaching a maximum of 1.2176 and minimum of 1.2109, which was an ATR down for the day. The day’s POC stood at 1.2155 and the VWAP at 1.2148. Today, the asset operates high, after opening at 1.2170 and rising to the level of 1.2235, above the ATR Above the day, before opening the market North American.

DXY is being traded at 89.8 thousand points. Following the USD, the USDJPY is oscillating close to 106.1 and the USDCHF of $ 0.9058. Gold is trading at $ 1,793 an ounce, and silver at $ 28.1.

Investors are optimistic about the end of the blockages and the reopening of economies, with the improvement in the situation of the economy German economy and the prospect of more monetary and fiscal stimuli in the main economies of the western world. That feeling is pulling investors out of the USD, although higher yields on U.S. Treasury bonds have limited higher losses in safe heaven.

The benchmark interest rate for 10-year US Treasury bonds shot up again, to 1.43%, with investors betting on a strong economic recovery driven by more fiscal stimulus, low interest rates and an efficient vaccination program against COVID-19.

Among the events monitored by the market today, we will have a consumer climate indicator GfK in Germany; indicators on the assessment of the economy, industry and services sector in Europe, and, as on every Thursday, data on the US labor market. Tomorrow, data on personal earnings and spending in the US will be released; on inflation and GDP growth in France; inflation in Spain. Also tomorrow, the US House will vote on legislation to provide the $ 1.9 trillion aid package.

The main factors considered by investors for their decision making at the moment are:

• COVID-19
• Germany registered 10,774 new cases yesterday, the biggest addition in a day since February 6. The chancellor Angela Merkel warned that Europe’s largest economy is in the middle of a third wave of infections and must proceed carefully with the reopening of schools and businesses. Meanwhile, the rate of vaccination remains slow in the country. THE Hungary reported the biggest daily increase in the number of cases in the past two months. Finland, which is also experiencing a resurgence of the pandemic, prepares to tighten the lockdown.
• MONETARY POLICY
• Comments by EDF President Jerome Powell, who presented his report to the Committee Senate Banking on Tuesday and the House Financial Services Committee on Wednesday, reinforced that the the US economy needs more support and that the EDF is committed to the current accommodative policy, which means that the Institution will continue to buy assets and zero interest rates, which Powell considers the best way to boost the labor market, and, consequently, the economy in general. Powell showed that the recovery in the country remains irregular and will continue on an uncertain path, and that inflation will remain above 2% for a while. In the presentations, Powell also spoke more about how the pre-pandemic economy had benefited the poorest Americans and how important it is to ensure that they can participate in the recovery economical. He answered several questions from Republican senators who are reluctant to sign the package $ 1.9 trillion aid. Democrats and Republicans wanted Powell to articulate justifications for their positions favorites on fiscal policy: Republicans looking for evidence that excessive stimulation could generate a damaging inflation and democrats seeking arguments to support an argument for aggressive fiscal stimulus continuous. Although the EDF has traditionally not been about fiscal policy, Powell has made it clear in recent months that the monetary policy alone cannot revive the economy. He ended with the statement that at the moment “nothing is more important than widespread vaccination ”.
• MACROECONOMICS
• The consumer climate indicator GfK in Germany increased to -12.9 in March 2021, better than the -15.5 of the previous month, which was the worst reading in 8 months. “Consumers are recovering from the shock that hit them after the strong blockade in mid-December. The recent drop in the number of infections and the vaccination campaigns feed the hope that the measures will be relaxed soon “, says Rolf Bürkl, consumer specialist at GfK.
• The Eurozone economic sentiment indicator increased to 93.4 in February 2021, above the market expectations. It was the highest reading since March last year, driven by the improvement in confidence in the industry (-3.3 vs -6.1 in January), services (-17.1 vs -17.7) and among consumers (-14.8 vs – 15.5). In retail trade, confidence decreased (-19.1 against -18.5) and in civil construction it remained virtually unchanged (-7.5 versus -7.7). In the industry, there was the third consecutive monthly increase in reaching levels above those observed before the pandemic. The expectation for the future has thus improved how evaluations have improved regarding the current level of order books and the adequacy of inventories of finished products. In the service sector, managers have better demand expectations.
• Initial claims for unemployment insurance in the U.S. are expected to drop to 838,000 in the week ending 20 February. Ongoing claims are likely to drop to 4.47 million in the week of February 13, of 4.49 million in the previous week, remaining well above the levels observed before the pandemic.
• ACTIONS
• In an article published on the Nasdaq website, Martin Tillier evaluates the latest Global Fund Manager Survey, from Bank of America / Merrill Lynch (BAC). It is a monthly survey on the vision of the current conditions of 225 managers of funds, which together control about $ 645 billion. Tillier points out that “this month’s survey showed a remarkable unanimity: more than 90% of respondents believe that we are in a V-shaped recovery and that this will be a good year for the market, while only 13% believe that stocks are in a bubble. Because of optimism, the cash allocation in these funds dropped to 3.8%, which raises the following question: where will the money come from buy stocks and boost markets from here? The answer comes from the retail investor. It’s trillions of dollars that individual American investors have in cash. However, people are currently looking for a savings security, even though saving money does not offer any real return. An old saying among traders says the top comes just after reluctant retail investors are convinced to enter a bullish run. The point is that we are not there yet. This is likely to happen when the economy starts to reach the market, when the number of vaccines grows, unemployment falls further and strong growth returns. So, the feeling of that the market was right all along will force the resistant to buy. That is why, although we believe that we are yes in a bubble, I also believe that it should still last. ” Therefore, it is important to be aware of the fact that, although the fair value of EURUSD is close to 1.15, it has a positive correlation with the S & P500, and can still keep going up for the next month

In yesterday’s session, EURUSD, which opened at 1.2150, closed with a 0.12% appreciation at 1.2164, after reaching a maximum of 1.2176 and minimum of 1.2109, which was an ATR down for the day. The day’s POC stood at 1.2155 and the VWAP at 1.2148. Today, the asset operates high, after opening at 1.2170 and rising to the level of 1.2235, above the ATR Above the day, before opening the market North American.

DXY is being traded at 89.8 thousand points. Following the USD, the USDJPY is oscillating close to 106.1 and the USDCHF of $ 0.9058. Gold is trading at $ 1,793 an ounce, and silver at $ 28.1.

Investors are optimistic about the end of the blockages and the reopening of economies, with the improvement in the situation of the economy German economy and the prospect of more monetary and fiscal stimuli in the main economies of the western world. That feeling is pulling investors out of the USD, although higher yields on U.S. Treasury bonds have limited higher losses in safe heaven.

The benchmark interest rate for 10-year US Treasury bonds shot up again, to 1.43%, with investors betting on a strong economic recovery driven by more fiscal stimulus, low interest rates and an efficient vaccination program against COVID-19.

Among the events monitored by the market today, we will have a consumer climate indicator GfK in Germany; indicators on the assessment of the economy, industry and services sector in Europe, and, as on every Thursday, data on the US labor market. Tomorrow, data on personal earnings and spending in the US will be released; on inflation and GDP growth in France; inflation in Spain. Also tomorrow, the US House will vote on legislation to provide the $ 1.9 trillion aid package.

The main factors considered by investors for their decision making at the moment are:

• COVID-19
• Germany registered 10,774 new cases yesterday, the biggest addition in a day since February 6. The chancellor Angela Merkel warned that Europe’s largest economy is in the middle of a third wave of infections and must proceed carefully with the reopening of schools and businesses. Meanwhile, the rate of vaccination remains slow in the country. THE Hungary reported the biggest daily increase in the number of cases in the past two months. Finland, which is also experiencing a resurgence of the pandemic, prepares to tighten the lockdown.
• MONETARY POLICY
• Comments by EDF President Jerome Powell, who presented his report to the Committee Senate Banking on Tuesday and the House Financial Services Committee on Wednesday, reinforced that the the US economy needs more support and that the EDF is committed to the current accommodative policy, which means that the Institution will continue to buy assets and zero interest rates, which Powell considers the best way to boost the labor market, and, consequently, the economy in general. Powell showed that the recovery in the country remains irregular and will continue on an uncertain path, and that inflation will remain above 2% for a while. In the presentations, Powell also spoke more about how the pre-pandemic economy had benefited the poorest Americans and how important it is to ensure that they can participate in the recovery economical. He answered several questions from Republican senators who are reluctant to sign the package $ 1.9 trillion aid. Democrats and Republicans wanted Powell to articulate justifications for their positions favorites on fiscal policy: Republicans looking for evidence that excessive stimulation could generate a damaging inflation and democrats seeking arguments to support an argument for aggressive fiscal stimulus continuous. Although the EDF has traditionally not been about fiscal policy, Powell has made it clear in recent months that the monetary policy alone cannot revive the economy. He ended with the statement that at the moment “nothing is more important than widespread vaccination ”.
• MACROECONOMICS
• The consumer climate indicator GfK in Germany increased to -12.9 in March 2021, better than the -15.5 of the previous month, which was the worst reading in 8 months. “Consumers are recovering from the shock that hit them after the strong blockade in mid-December. The recent drop in the number of infections and the vaccination campaigns feed the hope that the measures will be relaxed soon “, says Rolf Bürkl, consumer specialist at GfK.
• The Eurozone economic sentiment indicator increased to 93.4 in February 2021, above the market expectations. It was the highest reading since March last year, driven by the improvement in confidence in the industry (-3.3 vs -6.1 in January), services (-17.1 vs -17.7) and among consumers (-14.8 vs – 15.5). In retail trade, confidence decreased (-19.1 against -18.5) and in civil construction it remained virtually unchanged (-7.5 versus -7.7). In the industry, there was the third consecutive monthly increase in reaching levels above those observed before the pandemic. The expectation for the future has thus improved how evaluations have improved regarding the current level of order books and the adequacy of inventories of finished products. In the service sector, managers have better demand expectations.
• Initial claims for unemployment insurance in the U.S. are expected to drop to 838,000 in the week ending 20 February. Ongoing claims are likely to drop to 4.47 million in the week of February 13, of 4.49 million in the previous week, remaining well above the levels observed before the pandemic.
• ACTIONS
• In an article published on the Nasdaq website, Martin Tillier evaluates the latest Global Fund Manager Survey, from Bank of America / Merrill Lynch (BAC). It is a monthly survey on the vision of the current conditions of 225 managers of funds, which together control about $ 645 billion. Tillier points out that “this month’s survey showed a remarkable unanimity: more than 90% of respondents believe that we are in a V-shaped recovery and that this will be a good year for the market, while only 13% believe that stocks are in a bubble. Because of optimism, the cash allocation in these funds dropped to 3.8%, which raises the following question: where will the money come from buy stocks and boost markets from here? The answer comes from the retail investor. It’s trillions of dollars that individual American investors have in cash. However, people are currently looking for a savings security, even though saving money does not offer any real return. An old saying among traders says the top comes just after reluctant retail investors are convinced to enter a bullish run. The point is that we are not there yet. This is likely to happen when the economy starts to reach the market, when the number of vaccines grows, unemployment falls further and strong growth returns. So, the feeling of that the market was right all along will force the resistant to buy. That is why, although we believe that we are yes in a bubble, I also believe that it should still last. ” Therefore, it is important to be aware of the fact that, although the fair value of EURUSD is close to 1.15, it has a positive correlation with the S & P500, and can still keep going up for the next month

In yesterday’s session, the EURUSD, which opened at 1.2155, closed with a soft fall of 0.04% at 1.2149, after reaching a high 1.2181 and a minimum of 1.2135. The day’s POC stood at 1.2148 and the VWAP at 1.2154. Today, the asset operates high, reaching the 1.2170 level twice, until 12:30 pm in London, before the opening of the North American market.

DXY is being traded at the level of 90.0 thousand points. Following the USD, the USDJPY is oscillating close to 105.8 and the USDCHF of $ 0.9066. Gold is trading at $ 1,809 an ounce, and silver at $ 27.8 an ounce.

Money began to migrate from safe heavens such as the dollar, the Swiss franc and the Japanese yen, to currencies that should benefit a recovery in the global economy as well as for countries like the United Kingdom, which are recovering rapidly from the pandemic through the vaccination program.

The market is under the influence of the words of the President of the FED, Jerome Powell, who yesterday presented to the North American Congress the first part of his analysis on the economic situation of the country, rejecting the possibility that a policy loose monetary policy, such as that adopted by the Institution, can trigger strong inflation. Powell also said that the Fed remains working with the objective of generating jobs, which would be the solution for the resumption of the country’s economic strength after the pandemic. He reiterated that US interest rates will remain low and that the Fed will continue to buy bonds to support the US economy. The outlook for global GDP growth, which is negative for the dollar, is weighing more at the moment than the nominal yields of US government bonds, which are positive for the dollar.

Yield on 10-year reference US Treasuries reached 1.39% on Monday, a fairly high level. THE difference between 5 and 30 year olds reached the highest level in more than six years on Monday, reflecting the investors’ expectations of a strong economic recovery in the short term.

Investors are also optimistic about the end of the blockades and the reopening of economies. In addition, the German economy it grew more than initially thought in the fourth quarter of 2020, boosting this optimism.

Among the events monitored by the market today, Powell presents the second part of his update on the economy from the USA to Congress and data on the sale of real estate in the USA will be released. Tomorrow, we will have the GfK consumer in Germany; indicators on the assessment of the economy, industry and services sector in Europe, and, as every Thursday, data on the US labor market. On Friday, data on personal income and expenses in the USA; on inflation and GDP growth in France; inflation in Spain. Still on Friday, the US House of Representatives will vote to legislation to provide the $ 1.9 trillion aid package.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: In Japan, the government is considering suspending the state of emergency in the vicinity of Tokyo before planned, given the decrease in the number of COVID-19 diagnoses. The decision may come this Friday. In the U.S., 20 million doses of the Johnson & Johnson one-shot vaccine will be available soon, enabling 130 million Americans to be immunized by March. In Europe, AstraZeneca should deliver about half of the vaccines it has committed to supply to the European Union in the second quarter. However, the deficit would not affect the EU’s goal of vaccinating 70% of the adult population by the end of the summer. The Spanish government announced an extra € 11 billion package to help small and medium-sized businesses and self-employed people in the country deal with the crisis.
• MACROECONOMY:
• Mortgage applications in the United States fell 11.4% in the week ending February 19, the largest weekly drop since April 2020, due to higher interest rates and the harsh winter that is plaguing the country in this period. Requests to refinance real estate loans fell 11.3% in comparison weekly, but increased by 50% over the same period last year. Funding requests to buy a house they fell 11.6% weekly and grew 7% annually. The interest rate for 30-year financing increased to 3.08% per year last week, the highest since September 2020.
• o The industrial sentiment indicator in France rose to 97 in February 2021, compared to 99 forecasts. It was the highest reading since March last year, but remained below pre-pandemic levels. The slight improvement over the previous month mainly reflects the prospects for production, on recovery after the current lockdown in the country was released. Expectations regarding the employment remained unchanged.
• The German economy grew 0.3% in 4Q20, above the estimated growth of 0.1%, due to the especially the 8.3% increase in gross capital formation, especially in the civil construction sector. THE commerce also contributed positively, while consumer spending (-3.3%) and government (-0.5%) shrunk. In 2020, compared to 2019, the German economy contracted 3.7%. The German economy is expected to grow 3% in 2021 compared to the previous year.
• ACTIONS: Investors are swapping tech stocks for stocks that should earn more from a recovery economical. Growth-sensitive banks, industrial and energy stocks rose with Bank of America, Caterpillar Inc and Chevron Corp rising between 0.4% and 0.6%.
• OTHERS: Bitcoin returned to the $ 50,000 level today, after a strong sale in the previous two sessions, after the Square announced a $ 170 million bitcoin purchase as part of its ongoing commitment to cryptocurrency. The digital currency lost 15% of its record earlier in the week due to concerns about an overvaluation. THE Bitcoin has risen 75% so far this year, driven by institutional purchases and its appeal as a protection against the potential inflation resulting from the massive central bank and government stimulus measures.

One week ends with EURUSD recovering the amount lost in the past few days. Today, EURUSD opened a session returning to level of 1.21, after opening a session at 1.2092. DXY is being traded at the level of 90.3 thousand points. Following the USD, the USDJPY is oscillating close to 105.4 and the USDCHF is $ 0.8942. Gold is being traded at $ 1,771.0 an ounce, and silver at $ 27.0

Today the market will be keeping an eye on the results of the Purchasing Managers’ Index (PMI) survey for markets in Europe and the USA.

Today is the meeting of the leaders of the G7, a group that brings together the 7 richest countries on the planet (United States, France, United United Kingdom, Germany, Canada, Italy and Japan) and the main representatives of the European Union. The group should discuss especially Covax, an initiative to finance vaccinations against COVID-19 in low-income countries, indicating a coordinated effort to face the pandemic. Biden will announce that the US Government will contribute $ 4 billion to Covax. Boris Johnson, who can boast of the success of his vaccination campaign, he promised to redistribute most of his surplus through Covax. The European Union must donate 1 billion euros in vaccines to the poorest nations.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: according to the U.S. Food and Drug Administration, food and food packaging are not sources of coronavirus transmission. The FDA noted that COVID-19 is a respiratory disease transmitted from person to person. person: “the chances of infection from touching the surface of the food package or eating food are considered extremely low. “The statement contrasts with the approach taken by China, which has been testing imports banning suppliers whose shipments were found to be contaminated. On the other hand, a team ATR Up ATR Down ATR% POC VWAP 1.2138 1.2087 110% 1.2093 1.2111 Page 2 led by WHO, which investigates the origins of the virus, said last week that food products in the chain cold are a likely route of transmission.
• MACROECONOMICS
• The balance of the order book of the Confederation of British Industry rose 14 points compared to the month previous, its highest reading since February 2020 and above market expectations. The index of production expectations rose 22 points, while the export order portfolio indicator decreased 6 points. Manufacturing activity remains irregular, but so far it appears to have been less impacted than than in the previous blocks. However, a mixed picture persists between the different sub-sectors manufacturers, pointing to the asymmetric impact of restrictions.
• SHARES
• In Italy, the shares of the luxury company Moncler skyrocketed, with an 8% jump in 4Q20 sales, supported by for a strong performance in China.
• In France, Renault recorded its biggest loss recorded last year, while Allianz’s profits fell less than expected and Danone warned of a difficult first quarter.
• OTHERS:
• Bitcoin reached another record high of $ 52,932 today, and has advanced to market capitalization close to $ 1 trillion. Bitcoin’s gains were fueled by signs that it is gaining acceptance among major investors and companies, from Tesla and Mastercard to BNY Mellon. Even so, many analysts and investors remain skeptical of the irregularly regulated and highly volatile digital asset, which is still underused for trade. JP Morgan analysts said current bitcoin prices are well above estimates for the fair value.

After a sharp devaluation yesterday afternoon, as shown in the chart below, EURUSD opened a session today at 1.2089 and fell to around 1.2060, remaining at this level before the opening of the North American market. DXY is being traded at the level of 90.9 thousand points. Following the USD, the USDJPY is oscillating close to 106.0 and the USDCHF of $ 0.8957. Gold is trading at $ 1,791.0 an ounce, and silver at $ 27.1. Gold remains under selling pressure, falling for the 5th consecutive session. However, one perspective is that metal prices are expected to rise in the long run

Higher yields on U.S. government bonds are said to be primarily responsible for this decline in value of the pair. 10-year US Treasury reference yields rose above 1.30% for the first time since February 2020 amid firm expectations of massive fiscal spending in the country, coupled with a more robust economic recovery broadly as vaccination efforts gain strength. While more government spending supports growth, this means more debt issuance by the Treasury, which, together with the increase in energy costs, increased higher inflation investors.

Today, investors follow the release of FOMC minutes and data on retail trade and industry on USA, including the PPI (producer price index). Tomorrow will be released weekly data on the labor market and data on the US construction market. On Friday, the market will keep an eye on the survey results Purchasing Managers’ Index (PMI) for markets in Europe and the USA

The main factors considered by investors for their decision making at the moment are:

• COVID-19:
• The US has recorded the lowest daily number of new coronavirus infections since October 25. THE positive outlook will bring the New York City subway system back up and running 24 hours from 22 of February. In Europe, the United Kingdom is already beginning to draw up plans to lift national restrictions on socialization, ATR Up ATR Down ATR% POC VWAP 1.2109 1.2000 95% 1.2092 1.2081 Page 2 shopping and business travel. For Prime Minister Boris Johnosn, the priority will be to reopen schools from 8 March, but no decision has yet been made on whether all age groups will return to classrooms at the same time. time. The prime minister will detail his “roadmap” to end the blockade on February 22. The United Kingdom reported 9,765 new cases of COVID-19 yesterday, compared to an average of 13,200 daily cases in the last 7 days. THE last time the UK reported less than 10,000 new cases had been on 2 October 2020. Germany increased traffic restrictions at its borders to prevent the spread of the virus, and since Sunday only German citizens and residents of the country can enter Germany from the Czech Republic and the Tyrol region on Austria, two areas where the most infectious variants of the coronavirus are widespread, which was considered a “Excessive measure” by the Austrian government, which will not reopen restaurants, bars and cafes before the Easter holiday. Until today, almost 109 million people worldwide have contracted COVID-19, of which 2.4 million have died. Vaccination campaigns have already distributed more than 173 doses, however, the emergence of new strains of the virus continues cause concern.
• MONETARY POLICY
• Barclays Research discusses its expectations for the FOMC minutes to be released tomorrow: “The Fed did not make any changes to its political stance or future direction at its January meeting, the that was widely expected. We expect the minutes to focus on two elements: first, that the FED believes that there is a long way to go before the economy can achieve its goals, even if a large package of tax aid is approved by the end of the first quarter, as we hope. Second, through the progress of the vaccination campaign, the Fed has lowered its risk assessment. Together, these two elements indicate that the Institution is more optimistic than before about the prospects, but is in no hurry to change its political stance accommodative “.
• MACROECONOMICS
• The construction sector in the Euro Zone contracted 2.3% compared to the previous year, in December 2020, a fourth consecutive month of decline. On a monthly basis, the sector contracted 3.7%, compared to a advance of 2.3% in November.
• In Spain, the central bank said the country’s public debt increased to 117.1% of GDP in 2020, from 95.5% a year earlier, in the midst of the pandemic crisis
• Producer prices in the USA increased 1.3% over the previous month, in January 2021, exceeding the market consensus of a gain of 0.4%. It was the biggest increase in producer prices since the beginning of the index in December 2009, mainly due to a record 1.3% increase in the price of services. You goods prices rose 1.4%, due to a 5.1% jump in energy costs. On an annual basis, prices the producer advanced 1.7% in January, exceeding the forecasts of 0.9%.
• US retail sales increased 5.3% month-on-month in January 2021, exceeding forecast for the increase of 1.1%. It is the strongest gain since June, in a sign that new checks from stimulus helped boost consumer spending. The biggest increases were seen in sales in electronics and home appliance stores (14.7%); out-of-store retailers (11%); furniture (12%); articles sports, hobby, musical instruments (8%); and food and drink locations (6.9%). Retail sales, which exclude automobiles, gasoline, building materials and food services, which correspond to more than close to the consumer spending component of the gross domestic product, increased by 6%, recovering from a drop of 2.4% in December
• Mortgage applications in the United States fell 5.1% in the week ending February 12, a second consecutive week of decline. Requests to refinance real estate loans fell 4.7%, but increased 51% year on year; while those to buy a house fell 6.1%, but were 15% higher than the previous year. The average 30-year fixed mortgage rate increased by 2 basis points to 2.98% in the last week, but fell 79 basis points compared to the previous year.
• SHARES
• In France, the shares of the fashion conglomerate Kering, owner of Gucci and Yves Saint Laurent, plunged 8% after a 8.2% drop in group sales, with its flagship brand Gucci reporting a 10.3% drop in organic sales in the fourth quarter
• OTHERS: Bitcoin’s recovery continued on Wednesday, setting another historic record after breaking $ 50,000 for the first time the day before, driven by interest among investors and companies worldwide catapulted by Tesla’s big bitcoin purchase. MicroStrategy announced on Tuesday that it would sell $ 600 millions in convertibles to buy more bitcoins. Cryptocurrency increased more than five times in the past year, driven by institutional purchases and its appeal as a hedge against potential inflation resulting from massive central bank and government stimulus measures.

News

Christopher Smart, chief global strategist at the Barings Investment Institute, recently stated that concerns about the Long-term unemployment or rampant inflation in the US seems “irrelevant at the moment”. Although the numbers of today they are comforting, inflation will undoubtedly increase in the coming months. The main questions are: how high and how much will it last?

An article from the ING bank shows that, given the increase in commodity prices, energy and the increase in observed in the light of the impacts of the pandemic, inflation would reach 3% a.a. In addition, with the deployment process vaccine gaining momentum, potentially paving the way for a fuller economic reopening already in 2Q21, many companies can take the opportunity to raise their prices and thus recover the profits lost in the pandemic. IT IS this is more likely to happen in sectors that have faced supply constraints, such as the leisure and hospitality industry. You customers are desperate to try things they haven’t been able to do in the past 12 months, and in this case, the pricing power will be strong. In addition, the observed increase in the price of rental properties on the market the US – which alone represent 7.9% of the inflation basket – could lead to inflation above 3.5% and possibly get close to 4% a.a. already in May 2021.

The degree of support for this level of inflation will probably be determined by the response of the labor market. The USA are largely a service sector economy, which means that the main factor of inflation in the medium to long term is the price of the labor force. If the economy sees rapid employment growth and wages start to rise, it is when inflation can become a much bigger and more ingrained problem. There are currently 9.8 million fewer people in the than 12 months ago and that suggests that we shouldn’t worry too much yet, but it’s something we need to look at near.

According to Danske Research, “the fair value for EURUSD would be in the range of 1.08-1.20, depending on the model employed. The performance of the US asset trend remains strong relative to European counterparts and the COVID-19 pandemic accelerated the adoption of technology, favoring flows to the USA. An appreciation reversal (lower EURUSD) could come from rising US real rates, weakening EU optimism or a Chinese slowdown. We expect a EURUSD in the second half of 1.16 ”.

Credit Suisse highlights the importance of the 1.2146 resistance to the short-term directional bias: “EURUSD has stagnated as expected on the 55-day average and the resistance to price rises at the end of January at 1.2146 / 90 and we continue seeking this limit to define the top of a temporary range. Support remains at 1.2122 / 12 initially, below the which we can see a fall back to 1.2081. Below, now, we would see a smaller top compete to reinforce an environment comprehensive support. However, we continue to see this as a temporary break and we expect an eventual break above 1.2190 for a resumption of the upward trend in the core. So, we would expect a move back to the maximum values ​​of 1.2345 / 55 ”.

Highlights After days of lower turnover, with New Year holidays in Asia and markets closed in the US because of the holiday of Presidents Day, investors returned to work still optimistic about the global economic recovery, more fiscal stimulus in the main economies and the good pace of vaccination campaigns against a COVID-19 worldwide. Given this scenario and also the debt levels in the USA, DXY remains very weak, traded at a low other currencies. The risk-sensitive Australian dollar hit a month-high of $ 0.7802 and the New Zealand kiwi hit a peak of $ 0.7257 over five weeks. The rise in oil prices raises the Canadian dollar and the crown Norwegian. The Chinese yuan fell 0.1% to 6.4132 per dollar after the Financial Times reported that Beijing the country is considering imposing restrictions on exports of rare earth minerals to harm US companies that use them.

EURUSD opened the session at 1.2132 and rose to around 1.2170, remaining at this level before the market opened North American. DXY is being traded at the level of 90.2 thousand points. Following the USD, the USDJPY is fluctuating near 105.5 and the USDCHF is oscillating around $ 0.8877. The Japanese yen, the safe haven of the Asian market, also comes suffering from a strong risk appetite. Preliminary data showed that the Japanese economy grew 3.0% in the quarter, exceeding expectations for a 2.3% expansion, amid a recovery in corporate spending and a further increase private consumption. However, Japan’s industrial production fell by 1% in December compared to the month previous year, the second month of decline. Gold is trading at $ 1,820.5 an ounce, and silver at $ 27.6.

Today, investors follow the release of data on the labor market in Europe and the monthly ZEW indicator of Economic sentiment for the Eurozone. Tomorrow the market will keep an eye on the release of the FOMC minutes and data on retail and industry in the US, including the producer price index (PPI). On Thursday, data will be released weekly labor market data and monthly data on the US construction market. Already on Friday the market will be keeping an eye on the results of the Purchasing Managers’ Index (PMI) survey for markets in Europe and in the USA.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: In Spain, the number of new infections continues to fall, with 30,251 new cases reported on Monday, 16,844 less than a week earlier. Hospital occupancy has also been declining, albeit at a faster pace slower than new infections. In the USA, almost 70 million doses of the vaccine have been distributed until the last Sunday. Joe Biden will participate next Friday in a meeting with the leaders of the G-7, in which he should discuss the pandemic and include the USA in the WHO global vaccination plan, an alliance of dozens of countries that aims to ensure fair distribution of vaccines against COVID-19 worldwide.
• MACROECONOMICS
• The number of people employed in the Eurozone increased by 0.3% in 4Q20, above market expectations an increase of 0.1%. In relation to the previous year, the number of jobs fell by 2.0%.
• The ZEW Economic Sentiment Indicator for the Eurozone rose 11.3 points, to the highest level of last five months in February 2021. 76.9% of respondents estimate an improvement in activity while 7.3% expected it to worsen and 15.8% did not expect changes.
• The ZEW Economic Sentiment Indicator for Germany rose 0.4 points in February 2021, exceeding market forecasts. It is the biggest reading since September, since the markets are believing that the German economy will be back on the growth path in up to six months. A recovery is expected in the retail trade, accompanied by higher inflation expectations
• In France, the unemployment rate dropped to 8% in 4Q20, from 9.1% below market expectations of 9%. It was almost stable (-0.1 points) compared to 4Q19, although the data was partially distorted by six-week blocking measures, during which jobseekers were unable to register as unemployed.
• Shares:
• This week, companies in the tourism industry, hard hit by the pandemic, like Norwegian Cruise Lines, Marriott and TripAdvisor are expected to release their 4Q20 results.
• European stock markets remain bullish, with Frankfurt’s DAX 30 breaking a new record before to erase earnings to hover around 14,100. French company Michelin projected growth of up to 10% markets for 2021 and increased its prospect of dividends. Glencore Xstrata, a company Anglo-Swiss mining commodity multinational has reinstated its dividends amid profits records.
• OTHERS: Bitcoin reached a new record this Tuesday, approaching the $ 50,000 mark after the Tesla’s large bitcoin purchase has prompted institutional and corporate investors to do the same. THE Counterpoint Global, a Morgan Stanley unit, was the last to announce that it is considering the possibility of bet on virtual currency, following similar movements by Mastercard and Bank of New York Mellon. THE cryptocurrency has risen about 70% so far this year.
• News:
• An article published by Reuters shows that the North American economic recovery is near, insofar as jobs are being created.
• The January 2021 Payroll showed a smoother than expected recovery. However, the market remains optimistic as to future prospects. The details show some weakness and some oddities. For example, the drop of 10,000 vacancies in industry and 3 thousand in civil construction do not correspond to surveys by the Institute of Supply Management (ISM), based on data obtained from procurement and supply executives at more than 400 industrial companies, nor on data on the civil construction activity, which are growing. The retail trade had a drop of 38 thousand vacancies, while the sector of leisure and hospitality fell by 61 thousand vacancies.
• The number of employed persons is still 9.82 million below that of 11 months ago, while the proportion of employed persons productive age who actually have a job remains incredibly low by historical standards, at 57.5%. This is at the same level as the 1970s, when women’s participation rates in the labor market were much higher lower than they are today. In addition, it emphasizes structural issues in the US labor market, with a large number of people classified as ill and millions of other people caring for those ill, unable to work. How As with all recessions, there is also an increase in the number of people who retire early.
• Still, the February Payroll is expected to be better, given that the reopening of California, the country’s most populous state, is underway. progress. March’s is expected to accumulate even better results with the resumption of the economy in New York from 14 February. ISM’s strong job readings are also expected to suggest more hires in the coming months.
• However, significant improvements in the labor market will only be seen when sectors strongly affected by the pandemic, such as tourism, leisure and hospitality, can return to their normal activities.
• The EDF has made every possible effort to obtain maximum jobs and safeguard financial stability in the USA. Institution President Jerome Powell said last week that the United States is “far” from returning to a work that offers social and economic benefits, reduces economic disparities and cures the damage of recessions. “The full realizing the benefits of a strong labor market will require continued support from both short-term policy and long-term investments, ”he said in a webcast for the New York Economic Club,“ so that all those who job seekers have the skills and opportunities that will allow them to contribute and share the benefits of prosperity.” Maximum employment, said Powell, “is a broad and inclusive goal.” In practice, this means looking not only at the labor market in general, but also for various employment deficiencies, especially among workers in low and moderate income.
• Adjusting monetary policy to address income inequalities, often reflecting issues of racial equity, is more difficult than it looks. A recent New York EDF study shows that an accommodative monetary policy to support low-income workers can be a boomerang because it also fuels increases in asset prices, which benefit disproportionately those with more assets.
• Easy money has basically the same impact on employment, says the study. “The unemployment rate for blacks falls about 0.2 percentage points higher than the white unemployment rate after an unexpected monetary policy shock of 100 basis points. ” The result: “Employment and income gains for black families are small compared to wealth gains of white families

Highlights

Despite the lack of positive news from the eurozone, EURUSD continues to rise this week. Investors are doing profits from the recent rise in the USD, with the prospect that large US fiscal spending combined with accommodative monetary policy will keep the US dollar under pressure

EURUSD opened the session in the region of 1.2116 and is oscillating close to the POC and VWAP region, in 1.2125-1.2123 respectively. DXY is being traded at the level of 90.4 thousand points. Following the USD, the USDJPY is fluctuating near 104.7 and the USDCHF is oscillating around $ 0.8908. Gold is trading at $ 1,843.7 an ounce, and silver at US $ 27.3

Today’s session is influenced by the publication of January inflation rates in Germany and the USA. Stronger inflation than expected in the eurozone may offset concerns about the Bank’s potential monetary policy action European Central Bank (ECB). However, if ECB President Lagarde continues to express concern about the strength of the euro in this morning’s speech, this may also diminish the euro’s appeal. Still, if the US dollar continues to decline from the highs EUR / USD is likely to continue to rise. At the end of the day, the speech of Fed President Powell will be monitored closely looking for information on the US fiscal stimulus package.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: Germany is due to announce today an extension of the current lockdown until March 14, due to concerns about the spread of more contagious variants of the virus. Even so, a gradual reopening of shops and hotels in the coming weeks is likely. The number of people infected with the coronavirus in Germany increased by 8,072 on Wednesday, down from 9,705 last week. However, 813 people died with the disease yesterday, a statistic that continues to increase. With 14 new cases reported in China on Tuesday, unchanged from the previous day, a WHO report states that the virus did not originate in a laboratory in Wuhan.
• MONETARY POLICY: ECB President Lagarde will participate in a news webinar organized by The Economist in the late afternoon, although significant comments on the ECB’s monetary policy are not expected. FED President Powell will attend a webinar at New York’s Economic Club this afternoon.
• MACROECONOMICS:
• Mortgage orders in the United States fell 4.1% in the week ending February 5. Among them, refinancing orders fell 4.2%, to the lowest level in three months, and refinancing orders financing fell 4.7%. The average 30-year fixed mortgage rate rose 4 basis points to 2.96%, the level highest since the week ended November 13.
• o Industrial production in France fell 0.8% month-on-month in December 2020, below market forecasts increase of 0.2%. Manufacturing fell 1.7%, while coke and refined oil production fell due to the closure of several refineries (-30.5%). Other decreases were also observed in the manufacture of machinery and equipment goods (-3.5%) and in the manufacture of food products and beverages (- 1.8%). In contrast, production in mining and quarries, energy and water supply increased by 4.3%. Compared to February 2020, the period before the pandemic, production remained 4.9% lower
• Annual inflation in Germany was confirmed at 1% in January 2021, in line with estimates. It’s the first increase in consumer prices in 7 months as the highest VAT rates were passed on to consumers after the temporary reduction in value added tax, which was a measure government stimulus package, which ended on December 31, 2020. It also impacted inflation at charge on CO2 emissions introduced earlier this year. Food prices rose by 2.2%, with highlight to meats (3.5%), fruits (3.2%) and vegetables (3.1%). Additional upward pressures also came net rent excluding heating expenses (1.3%), prices of social equipment services (6%) and vehicle maintenance and repair (3.4%). On the other hand, energy prices fell 2.3%, mainly heating oil (-13%) and motor fuels (-2.9%) and transport fuels decreased by 8.1%. On a monthly basis, consumer prices increased by 0.8%.
• The annual inflation rate in the USA was stable at 1.4% in January 2021, the same as in December and slightly below 1.5% market forecasts. Food prices increased by 3.8%, while the cost of energy decreased by 3.6%. In the month, consumer prices rose 0.3%, in line with projections and after revised downward slump of 0.2% in December. The gasoline index continued to increase, increasing 7.4% and accounting for most of the seasonal variation in the index of all items. Although electricity rates and natural gas have decreased, the energy index rose 3.5%. The feed index rose slightly 0.1%, since an increase in the rate of food out of the home more than offset the drop in the index home food
• ACTIONS:
• In Italy, the FTSE MIB traded slightly higher on Wednesday, with traders continuing to follow the formation of a new government in Italy and the vaccination campaign. The banking sector will remain in highlight, while investors await the profits of Banca Generalis and Banca Sistema.
• In Spain, the IBEX 35 fell around 8,066 on Wednesday, with investors waiting for any developments around the US fiscal stimulus and monitoring COVID-19 numbers. The number of new infections is decreasing, but fatalities remain at levels only surpassed by the worst days of last spring. The Spanish government has announced that it will extend the travel ban in the UK, Brazil and South Africa until March 2, out of concern for new variants of the virus. Border restrictions with Portugal will remain in force until 1 March.
• slowing coronavirus infections and hopes for a major US stimulus package. The actions Societe Generale were among the best performers after the bank’s profits forecasts and the bank’s CEO said that “the fourth quarter results provide further confirmation of the recovery in our business observed in the third quarter after the beginning of the year marked by the impacts Covid crisis ”. Total’s shares plunged on the second day after the company announced a 66% in 2020 profit. France reported 18,870 new infections on Tuesday, well below 23,337 in the week previous.
• In the US, US futures rose slightly on Wednesday, after 6 consecutive days of bullishness. The investors focus on the earnings release season, reducing the number of infections by coronavirus and expecting more stimuli. The earnings of Cisco, Lyft, Mattel and Twitter released after the closing on Tuesday exceeded forecasts. The earnings of Coca-Cola, Under Armor and General Motors, released this morning were larger than expected, although GM warned it could cut earnings in 2021. Uber is due to report today. Apple reportedly partnered with Taiwan Semiconductor Manufacturing to develop micro OLED screens, which it plans to use on its devices augmented reality. Meanwhile, Eli Lilly’s combined antibody to combat COVID-19 received US FDA emergency use authorization
• In China, the Shanghai Composite Index reached its highest index in 13 years with official data showing that producer prices in China rose for the first time in a year in January and at the fastest rate since May 2019. This is the last trading day before the Lunar New Year holiday. Market sentiment too was driven by the news that foreign direct investment in China grew 4.6% in January in compared to the same period last year, with the increase in investment from Japan. Meanwhile, the new China’s bank lending reached new highs in January due to seasonal demand

News

A liquidity trap is a contradictory economic situation in which interest rates are very low and interest rates are high savings, making monetary policy ineffective. It happens when there is a negative outlook for the economy. Described for the first time by economist John Maynard Keynes, is a case where consumers choose to avoid investments and keep your funds in cash (in savings or checking account) waiting for the most opportune moment to return to invest. In this case, the central bank’s efforts to stimulate economic activity are hampered.

For example, if the Federal Reserve in the USA tries to stimulate the economy by increasing the supply of dollars, there will be no effect because people will tend to hold the money, not put it in the economy. This lack of borrowers tends to affect consequently the purchase of cars or houses. Likewise, if the FED lowers the interest rate, money will not will circulate.

The solution to this situation, in general, is to increase consumer confidence in starting to spend / invest again, instead of saving. This can happen through a (big) drop in prices. When this happens, people just can’t avoid spending money. Or even through increased government spending, a tactic that it works by setting an example of trust, as well as strengthening job growth.

In the 1990s, Japan faced a liquidity trap. Japan faced deflation throughout the 1990s and, in 2019, still has a negative interest rate of -0.1%. The liquidity traps appeared again in the wake of the crisis financial crisis and the ensuing Great Recession, especially in the euro area. Interest rates were set at 0%, but investment, consumption and inflation remained under control for several years after the crisis peaked. The Central Bank European Council has resorted to quantitative easing (QE) and negative interest rate policy (NIRP) in some areas to break free of the liquidity trap.

DXY continues to lose momentum on Wednesday after new data showed the US inflation rate rose less than expected, easing concerns that it would rise too fast with the new fiscal stimulus. THE market concern is that if inflation rises too much, interest rates will have to rise earlier than expected, which it would migrate money from circulation to bonds. If inflation falls below expectations, it is a sign that consumption continues weak, and that money, which should be in circulation, stimulating the economy and creating jobs, is saved.

Highlights

On Friday, with the release of the US Payroll for January and the final approval of the draft budget that includes the $ 1.9 trillion stimulus, the USD showed enormous weakness, which caused the EUR to rise without any resistance. THE EURUSD started from 1.1964 to close the day at 1.2042, up 0.67%.

American Democrats are using a procedural device, called reconciliation, to force approval of the measure even if Senate Republicans oppose the package. “It is very clear that our economy is still in trouble”, said President Biden, assessing the Payroll result as weak, and increasing pressure on the House. The Department of US Labor reported on Friday that 49,000 jobs were created in January, 6,000 in the private sector. THE The labor market remains 10 million jobs below its pre-pandemic levels. Yesterday, the Secretary of the Treasury, Janet Yellen, said the fiscal stimulus package could generate enough growth to restore full employment in the US in the next year. In this scenario, investors’ risk appetite increases.

EURUSD opened the session at 1.2049 and is oscillating close to the POC and VWAP region at 1.2033-1.2036 respectively. DXY is being traded at 91.2 thousand points. Following the USD, the USDJPY is oscillating close to 105.3 and the USDCHF is oscillating close to $ 0.9009. Gold is trading at $ 1,820.8 an ounce, and silver at $ 27.2. Even if in appreciation at the moment, the medium to long term prospects for the DXY, USDJPY and USDCHF assets remain low due to the risks posed by record debt levels. Thus, and for metals, the medium to long term prospects higher prices. Specifically on silver, it appears that traders’ attempt to act en masse by Reddit has failed, at least temporarily. Looking ahead, the growing demand for industrial applications, as that the economy gains strength, it should also raise silver prices in the long run.

As last week, investors will be aware of the COVID-19 numbers and the approval process for the US economic stimulus. Important data disclosures this week include inflation in the US, China and India; Numbers ATR Up ATR Down ATR% POC VWAP 1.2091 1.1986 47% 1.2032 1.2036 Page 2 fourth quarter GDP for the United Kingdom; consumer sentiment to the US and industrial production and foreign trade to Germany.

The main factors considered by investors for their decision making at the moment are:-

• COVID-19: President Joe Biden said the United States is unlikely to achieve collective immunity for coronavirus before the end of the summer, due to the lack of availability of the vaccine. In the US, logistical delays and shortages of vaccines meant that only a small fraction of the population received vaccines since two different vaccines were made available in December. Biden also said that the Centers for Disease Control will issue guidelines on brief on how to reopen schools safely, an important initial goal of your administration that is part of economic recovery. Teachers’ unions raised objections to the reopening of schools in some localities, citing high transmission rates and lack of sufficient precautions to prevent dissemination in class. In Spain, the spread rate of COVID-19 has dropped for the first time since November. Meanwhile, the Catalonia has announced that it will remove some blocking restrictions as of Monday amid a drop in cases in the region, allowing gyms to reopen and people moving out of their municipalities. In others Spanish regions and municipalities are still tightening up the measures.
• MONETARY POLICY: The pound sterling was traded at around $ 1.37 today amid a stronger dollar in prospect of a faster economic recovery in the USA. The Bank of England said last week that there is at least six months until negative interest rates are a possibility.
• MACROECONOMICS
• Spain’s industrial production fell 0.6% compared to the previous year, in December 2020. It was the lowest contraction in production since December 2019, with capital goods production falling at a more rapid pace soft (-3.3%) and with the increase in the production of energy (3.4%) and intermediate goods (2.4%). At the same time, production of durable consumer goods fell by 2.0% and that of non-durable consumer goods fell by 4.5%.
• Industrial production in Germany stagnated in December 2020. Energy production fell by 2.9% and that of capital goods fell 0.5%, offsetting increases in the production of intermediate goods (2%), consumption (2.6%) and civil construction (3.2%). Compared to February 2020, before the restrictions due to the pandemic, production was 3.6% lower. Considering 2020, industrial production contracted 8.5%.
• Consumer credit in the United States increased $ 9.73 billion in December 2020, disappointing market expectations of a $ 12 billion gain. It was the fourth consecutive increase in credit to consumer credit, since non-revolving credit increased by US $ 12.7 billion, while revolving credit decreased by $ 3 billion. On an annual basis, consumer credit grew by 2.8%
• ACTIONS: Cisco, DuPont, Twitter, Uber and Coca-Cola announce 4Q20 results this week.

Highlights

US Non-Farm Payroll Disclosure Day January 2021, with the market estimating the creation of 50,000 jobs job. It would be a small gain that would still leave the economy with around 10 million jobs below the period before the pandemic. The Congressional Budget Office estimates that the number of American employees will not return to its pre-pandemic level by 2024.

After losing to the dollar’s strength all week, accumulating a 0.8% devaluation until the close of Thursday, the EURUSD starts to show a reaction. Despite the POC and VWAP being in the region of 1.1965-1.1968, after the opening of the European market the asset rose to 1.1980 and stayed there. DXY is being traded at 91.4 thousand points. Following the appreciation of the dollar, the USDJPY is oscillating close to 105.5 and the USDCHF is oscillating close to $ 0.9028. THE gold is trading at $ 1,807.0 an ounce, and silver at $ 26.6.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: Johnson & Johnson has officially requested authorization for the emergency use of its single dose vaccine US FDA and will request the European authorities in the coming weeks. Europe’s drug regulator will begin analyzing data for use of the Eli Lilly and Regeneron vaccines. Both use monoclonal antibodies are laboratory-made versions of the body’s natural defenses to fight infections. The Regeneron cocktail, which received authorization for emergency use in the United States in November, was administered to former US President Donald Trump when he had Covid-19 infection.
• MACROECONOMICS:
• The labor market in the private sector in France shrank 39,600 vacancies in 4Q20. The fall was a result mainly the second block implemented to contain another wave of COVID-19 infections. The leaf of payment in industry fell 0.6%, in services it fell 0.4%, in construction it was almost stable at 0.1% ATR Up ATR Down ATR% POC VWAP 1.2015 1.1923 56% 1.1965 1.1968 Page 2 growth. Temporary employment continued to recover for the third consecutive quarter, increasing 5.3%, but still below the level before the pandemic.
• The labor market in the private sector in France shrank 39,600 vacancies in 4Q20. The fall was a result mainly the second block implemented to contain another wave of COVID-19 infections. The leaf of payment in industry fell 0.6%, in services it fell 0.4%, in construction it was almost stable at 0.1% ATR Up ATR Down ATR% POC VWAP 1.2015 1.1923 56% 1.1965 1.1968 Page 2 growth. Temporary employment continued to recover for the third consecutive quarter, increasing 5.3%, but still below the level before the pandemic.
• ACTIONS: in the USA, Gilead Sciences 4Q20 results released yesterday pointed to a 26% increase in revenue, driven by sales of its antiviral drug, remdesivir, used to treat COVID-19 world. In France, BNP Paribas jumped more than 2% with the company announcing a dividend payment of € 1.11 euros per share in May. Sanofi’s shares also rose more than 2%, as the French pharmaceutical said it expects higher earnings per share in 2021.
• ACTIONS: in the USA, Gilead Sciences 4Q20 results released yesterday pointed to a 26% increase in revenue, driven by sales of its antiviral drug, remdesivir, used to treat COVID-19 world. In France, BNP Paribas jumped more than 2% with the company announcing a dividend payment of € 1.11 euros per share in May. Sanofi’s shares also rose more than 2%, as the French pharmaceutical said it expects higher earnings per share in 2021.

Highlights

EURUSD continues to trade lower, starting a session at 1.2044 and breaking through a barrier of 1.202, reaching 1.1982 losing to the strength of the dollar. The 1.20 represents psychological support, which, when passed through, can take the couple to the level of 1.1975. The key resistance is seen in the 1.2055-1.2065 area. DXY is being traded at 91.4 thousand points. Following the appreciation of the dollar, the USDJPY is oscillating close to 105.3 and the USDCHF is oscillating close to $ 0.9023. THE gold is trading at $ 1,811.5 an ounce, and silver at $ 26.4.

There is a general pause in investors’ appetite for riskier assets, due to expectations that the US economy will recover from the crisis faster than its G10 counterparts. North American private sector employment data released yesterday showed a strong recovery and the ISM Services PMI exceeded estimates. This scenario is gaining also driven by the decline in eurozone GDP in 4Q20 while US GDP grew. Is important to point out, however, that the strength of the dollar is momentary, since US debt, which is already very high, increase.

Among the news expected today, the following stand out: PMI data from the civil construction sector for the largest global economies, the ECB’s Economic Bulletin, Eurozone retail sales in December 2020, and, as on every Thursday, data on the US labor market. The Payroll data for January will be released tomorrow, an event that always moves the market.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: England’s chief physician said at a news conference on Wednesday that the United Kingdom “surpassed the peak” of this pandemic wave. The UK will begin tests today to assess immune responses generated if the doses of the Pfizer and AstraZeneca vaccines are combined in a two-dose schedule. The researchers behind the study said the data could help increase the flexibility of ATR Up ATR Down ATR% POC VWAP campaigns 1.2053 1.1971 84% 1.2007 1.2011 Page 2 vaccination around the world. Initial data on immune responses should be generated in June. The vaccine AstraZeneca is also being tested in combination with the Russian vaccine Sputnik V. In Spain, new infections they are decreasing, but the death toll and pressure on hospitals remains extremely high. The government Spanish suspended most trips from Brazil and South Africa since yesterday
• FISCAL POLICY:
• The Bank of England, during the February meeting, voted unanimously to maintain the basic interest rate by 0.1% and left its bond purchase program unchanged. The unanimous decision to maintain rates may indicate that negative rates are out of the question. The coronavirus vaccination campaign in the UK Kingdom has improved the economic outlook but the recent increase in cases still causes concern. THE The institution also stated that the Prudential Regulation Authority’s decision to start PRA-regulated companies on operational considerations around the possible implementation of fees negative interest rate was not intended to send any signal about the likelihood or imminence of such policy
• In the US, while negotiations on the $ 1.9 trillion bipartisan stimulus continue, the leadership Democrat in the Senate is pushing for the parliamentary “reconciliation” procedure, which allows the package is approved by a simple majority. However, in this procedure, the stimulus project will be smaller and some elements, such as the minimum wage increase, will have to be removed. The alternative proposal would reduce the $ 1,400 to $ 1,000 benefit. The $ 170 billion proposed by Biden to schools was reduced to $ 20 billion. The government is believed to be preparing to present a project greater stimulus and infrastructure.
• MACROECONOMICS:
• IHS Markit / CIPS UK Construction PMI dropped to 49.2 in January 2021, below market expectations 52.9. The reading signaled a decline in overall construction production for the first time since May 2020, as a drop in commercial activity and construction work on civil engineering projects offset the strong growth in the residential category. At the same time, new orders increased by at least seven months in the middle of the new phase of lockdowns. Employment, on the other hand, decreased due to the non-replacement of people left after the project was completed. In relation to prices, inflation of input costs reached its level highest in just over two and a half years
• New car sales in the UK fell 39.5% in January 2021 compared to the same period in the previous year, with showrooms across the country closed, leading to the worst start of the year for the sector since 1970. Demand remained depressed for both private buyers (-38.5%) and large fleets (- 39.7%).
• IHS Markit Eurozone Construction PMI fell for the 11th consecutive month and at the highest rate since last year, when countries began to ease the blockade. The data signaled a reduction in construction production in the three monitored subsectors, with civil engineering registering the sharpest drop accentuated. Among the largest economies in the Eurozone, France recorded the most pronounced contraction rate, followed by Germany, while Italy recorded a decrease in construction activity for the third time in the past four months, although only moderate. Although activity and sales trends have remained weak, construction companies expressed optimism about the 12-month forecast amid positive news about vaccines. This was the first time that companies foresaw growth in activity since July 2020.
• Eurozone retail trade increased by 2.0% in December 2020 compared to the previous month, exceeding market expectations of 1.6%. Sales of non-food products increased by 1.5% driven by a recovery in sales of textiles, clothing, footwear (12.4%). Still, trade fell for electrical and mobile goods (-7.0%), computer equipment, books and others (-1.4%) and products pharmacists and doctors (-2.9%). Online commerce also fell (-2.7%)
• ADP data showed a strong recovery in private employment in the USA. The market estimates that Payroll, which will be released tomorrow, will show that the economy created 50,000 jobs in January, after a tremendous stop in December. Initial unemployment insurance claims are dropping to 830,000 in the last week of January, 847 the week before. The forecast is that the continued benefits will also fall, for 4.70 million in the week of January 23.
• ACTIONS:
• Shares on the London Stock Exchange are trading low after the Bank of England left the rate interest rate and its asset purchases unchanged as expected, but stressed that it is ready to adjust monetary policy if necessary. Investors are also pessimistic about the PMI survey that showed that Britain’s construction sector contracted unexpectedly in January, and with the sharp deterioration the automotive sector.
• Deutsche Bank reported profit of 113 million euros in 2020, while analysts expected a loss around 300 million euros. This was the Bank’s first annual profit since 2014, thanks to its division of investment bank. In the past 10 years, Deutsche has accumulated losses of 8.2 billion euros. The market questions whether profits will be sustainable, as Deutsche, like its competitors, experienced a boom amid market volatility associated with the COVID-19 pandemic. A regulatory source said that although it is in a firmer position than it was a year ago, Deutsche’s business strength is still behind competitors in the European banking sector.
• Shell’s profit in 2020 has declined dramatically.
• In the USA, eBay and Paypal results released yesterday, exceeded forecasts, while Qualcomm disappoint. Becton, Dickinson and Company, Gilead Sciences and Philip Morris International should disclose your 4Q20 results today.
• Ford Motor decided to close the electric vehicle joint ventures with China’s Zotye Automobile, claiming that China’s electric vehicle industry and government policies have undergone major changes since that the agreements were signed in 2017 and 2018. Last week, Ford said its joint venture in China with Chongqing Changan Automobile Co would start to manufacture Mustang Mach-E vehicles entirely electrical. Ford said it will pursue a “more flexible business model in China”, using its operations existing in the country and elsewhere. In 2017, during a visit by former President of the United States Donald Trump to China, Ford and Zotye announced $ 756 million combined investments to create a joint venture in China to build small electric passenger vehicles. Sales of electric vehicles, plug-in and hydrogen-powered hybrids in China are expected to increase to 20% of new car sales by 2025, up from just 5% now, the State Council said in November
• Kia Corp’s shares in South Korea reached their highest level in more than two decades on Wednesday, after the automaker signed a $ 3.59 billion deal with Apple Inc to build vehicles electrical. Shares in Kia, an affiliate of Hyundai Motor Co, jumped 14.5%

Highlights

EURUSD continues to trade lower, starting a session at 1.2040 and moving towards 1.2010, losing to the strength of the dollar, with the market operating in the hope that the US economy will recover faster than that of others countries. DXY is being traded at 91.2 thousand points. Following the appreciation of the dollar, the USDJPY is hovering close to 105.6 and the USDCHF is hovering close to $ 0.8992. Gold is trading at $ 1,835.1 an ounce, and the silver at $ 26.6.

Among the news expected today, the following stand out: data on January inflation in Europe and speeches by members of the EDF at the end of the day. Tomorrow, PMI data from the civil construction sector will be released for the largest global economies, the ECB Economic Bulletin, Eurozone retail sales in December 2020, and, as on every Thursday, data on the US labor market. This Friday, the January Payroll will be released, an event that always moves the Marketplace.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: After a slow start, vaccine launches in many European countries are gaining momentum and the number new infections and deaths is gradually decreasing due to blockages. Germany’s Prime Minister, Angela Merkel, reiterated that every German should receive a vaccine by the end of the summer.
• FISCAL POLICY: The US Senate voted yesterday, 50-49, to start the debate on a resolution budget for fiscal year 2021 that will allow Democrats to approve the $ 1.9 trillion stimulus plan without Republican votes.
• MACROECONOMY:
• The services PMI for the eurozone and France was revised upwards, while Germany’s was revised slightly down. The PMI numbers for Italy’s services surprised positively, while the from Spain did not live up to expectations.
• IHS Markit Eurozone Composite PMI pointed out that services were once again the main obstacle to the economy, with activity in this sector contracting for the fifth consecutive month and also at a more accentuated pace than than in December. Manufacturing remained a bright spot, with production growing for the seventh month consecutive year, albeit at the lowest rate in this sequence of growth. Levels of receipt of new jobs fell for the fourth consecutive month, while export business continued to improve, increasing modestly for the second consecutive month. Meanwhile, a net drop was recorded in personnel levels, but the weakest in the current 11-month fall. Finally, confidence in in relation to the future remained in positive territory throughout January, with the degree of optimism little changed since the previous month.
• Producer prices in the Euro Zone increased 0.8% compared to the previous month, in December 2020. Energy contributed most to the increase, increasing by 2.2%. Additional upward pressure came from goods intermediaries (0.4%), capital goods (0.1%) and durable consumer goods (0.1%). Prices of non-durable consumption remained stable. On an annual basis, producer prices fell by 1.1%.
• The annual inflation rate in the Eurozone jumped to 0.9% in January 2021, the highest rate since February 2020, and ending 5 months of deflation. Food, alcohol and tobacco prices are expected to increase further in January (1.5%), followed by services (1.4%) and non-energy industrial goods (1.4%), while the cost of energy tends to decrease less (-4.1%). On a monthly basis, consumer prices rose 0.2%. The core annual inflation, which excludes volatile prices for energy, food, alcohol and tobacco and for which the ECB analyzes policy decisions jumped to 1.4% in January, from a record low of 0.2% in each of the four previous months.
• The Composite PMI IHS Markit / CIPS UK was revised upwards to 41.2 in January 2021. Still, the reading pointed to the biggest contraction in private sector activity since May 2020 due to the impact of trade restrictions and temporary business closings during the third national blockade. The data January highlighted divergent trends between the manufacturing and service sectors. The level of employment decreased in the eleventh month and input prices rose sharply in the private sector, led by transportation bills and the passing on of rising freight costs by suppliers. In a On a more positive note, business expectations have increased since December, both in industry and in service sector. Overall, confidence across the UK private sector has reached its highest level since May 2014.
• The IHS Markit U.S. Manufacturing PMI was revised slightly higher in January 2021 revealing a record plant growth due to accelerated expansions in production and new orders. On the negative side, cost pressures have intensified due to the scarcity of raw material, for which companies have managed partially pass on higher costs thanks to sales prices that increased at the fastest pace since July 2008.
• The Redbook index in the United States, which concentrates the revenues of the largest North American retailers and indicates the consumption situation in the country, pointed to an increase of 4.4% in the week ended on January 30, 2021 compared to the same week last year
• US construction spending increased 1% in December 2020 from the previous month to a seasonally adjusted annual fee of $ 1.49 trillion. This was the third consecutive month of earnings and the highest level since records began in 2002. Residential construction has increased in the last 12 months at the fastest pace ever recorded, growing 21% in one year. Non-residential spending fell 9.8% in the year
• ACTIONS:
• The quarterly result of Siemens, a German engineering company, exceeded the expectations of the first quarter and the Company raised its projection of results for this year
• Danish pharmaceutical company Novo Nordisk released optimistic sales and earnings forecasts for 2021.
• British telecommunications company Vodafone reaffirmed its profit targets.
• Alphabet Inc, Google’s parent company, exceeded analyst estimates for quarterly revenue announced yesterday evening, benefiting from a recovery in ad spend targeting Christmas in its platforms
• Amazon CEO Jeff Bezos will step down in the third quarter of this year, passing command to chief executive officer of the Company and responsible for Amazon Web Services, Andy Jassy. Bezos will continue on Amazon as chairman of the Board of Directors.

News

According to information from Reuters, the mobilization movement through social networks of small investors begins to cool down, now that US Treasury Secretary Janet Yellen has called a meeting of senior officials that could result in tougher market regulation for hedge funds, small investors and stock brokers.

US-listed GameStop shares, which reached $ 483 last week, fueled by posts in the popular Reddit’s WallStreetBets forum, dropped to $ 90 this week. Silver, which rose briefly on Monday with small investors buying the metal, stabilized around 10% below its recent peak

Although most respondents described themselves as “buy and hold” investors, who generally avoid swinging moves, they said they were open to occasional speculative action games. The investment in retail today it is much easier. The advent of free trades and fractional shares allows investors scale investments without putting too much money into play at once. From their smartphones, these traders are able to gather a crowd, like the one that brought chaos to the market with last week’s GameStop case.

The head of the US Securities and Exchange Commission, which regulates the markets, will meet with Yellen and the heads of the Federal Reserve and the Commodity Futures Trading Commission, possibly on Thursday. Yellen asked to discuss the recent volatility and whether trade has been consistent with fair and efficient markets. It was not clear whether a meeting could result in any action, but experts hope that the focus will also be on the growing role banks, such as hedge funds, in the financial markets.

Online broker Robinhood is also under pressure and has been struggling to raise more than $ 3 billion while running to meet the financing needs arising from the commercial boom. Robinhood has further relaxed some of its trade restrictions on Tuesday, increasing the purchase limits for GameStop shares, for example, from 20 to 100 actions.

Highlights

EURUSD continues to operate in decline, as European countries are being forced to further increase their blockages to prevent the spread of COVID-19, and which increase as expectations that the US economy will recover faster than other countries. DXY is being traded at 91.1 thousand points, breaking resistance of 91, where it had not reached since December 2, 2020. Following the appreciation of the dollar, the USDJPY is oscillating close to 105.0 and the USDCHF is hovering close to $ 0.8975, both up. Gold is trading at $ 1,845.5 an ounce, and silver to $ 27.6.

Among the news expected today, the following stand out: the release of European GDP for 4Q20 and US retail data for January 2021 obtained by the RedBook survey. Tomorrow investors await data on January inflation in Europe and the speeches of the EDF members at the end of the day.

Among the news expected today, the following stand out: the PMI Markit indices for Europe and the United States, which are surveys carried out with the Purchasing Managers of the Industry and of the Services Sector, to indicate the pace of business, evaluating New Orders, Production, Employment, Suppliers’ Delivery Times and Stock of Purchased Items. Today, the unemployment rate in the European Union. Tomorrow investors will be waiting for the release of European GDP for 4Q20 and January 2021 US retail data from the RedBook survey.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: the European Union leaders’ plan is to vaccinate 70% of European adults by summer. The UK started preparing to reopen schools, signaling that the end of the lockdown may be near. Moderna announced a plan to fill the vials with extra doses of the vaccine, as a way to optimize the available resources.  FISCAL POLICY: President Biden reiterated that he will not accept a smaller package of stimuli for recovery US economic policy.
• MACROECONOMY:
• The Italian economy shrank 8.8% in 2020, the biggest drop since World War II, but less than that the 9% contraction predicted by the Italian government
• GDP fell 6.8% in the Eurozone in 2020, and shrank 0.7% in the fourth quarter. The prospects for 1Q21 are not encouraging, as many countries have tightened restrictions and imposed blocks with the objective prevent the spread of the pandemic.
• ACTIONS: Amazon, Alphabet, Amgen, Exxon Mobil and Pfizer announce their 4Q20 results today. American’s CEO Airlines, Doug Parker, said employees should prepare for another round of layoffs, as U.S. aid for industry workers expires on April 1st.
• OTHERS: Silver dropped to $ 27.8 an ounce today, after reaching $ 30 an ounce in the previous session. At Reddit, investors claimed that banks have been manipulating prices, keeping them artificially low and masking the lack of physical supplies. In addition to this commercial fever, concerns that the slow launch of combination vaccines with new strains of COVID-19 to hinder a global economic recovery led investors towards the metal

News

Reuters today published a news story about the new trader’s profile:

Robinhood says the average age of the 13 million users on his platform is 31 years old. In interviews with more than a dozen users of digital brokers, Reuters has found a younger generation that addresses the trading of very differently from Wall Street traders. They are young women and men who feel comfortable in digital communities, whether monitoring topics on Reddit, following tips on Twitter or exchanging ideas in groups Slack. They are also emerging in a time of fast and cheap online negotiations, recently fueled for money from government stimulus programs and lots of free time thanks to the COVID-19 pandemic.

Although most respondents described themselves as “buy and hold” investors, who generally avoid swinging moves, they said they were open to occasional speculative action games. The investment in retail today it is much easier. The advent of free trades and fractional shares allows investors scale investments without putting too much money into play at once. From their smartphones, these traders are able to gather a crowd, like the one that brought chaos to the market with last week’s GameStop case.

Highlights

EURUSD is starting to fall in February, opening the Asian session at 1.2122 and reaching 1.2075 at European session. The dollar is quite strong at the moment, as investors seek safe heaven in the face of doubts regarding the approval of the stimulus package for the recovery of the North American economy. DXY is being traded at the level of 90,800 points. The USDJPY is oscillating close to 104.9. The USDCHF is oscillating close to $ 0.8906. Gold is trading at $ 1,860.7 an ounce, and silver at $ 29.5. Silver is rising almost 10% today, to its value highest since 2013.

The market continues to digest the news that a group of small investors, through the social network Reddit, has come together to make certain actions appreciate. Among them were BlackBerry, Macy’s and AMC, but mainly GameStop, which rose more than 750% from the beginning of January to the trading session of last Tuesday, January 27th. These are investors responsible for this increase in the value of silver, since since the end of last week Reddit posts suggested that higher prices could hurt financial institutions specializing in short selling.

Among the news expected today, the following stand out: the PMI Markit indices for Europe and the United States, which are surveys carried out with the Purchasing Managers of the Industry and of the Services Sector, to indicate the pace of business, evaluating New Orders, Production, Employment, Suppliers’ Delivery Times and Stock of Purchased Items. Today, the unemployment rate in the European Union. Tomorrow investors will be waiting for the release of European GDP for 4Q20 and January 2021 US retail data from the RedBook survey.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: Following the action taken by Sanofi and Novartis AG, Bayer is also in negotiations to help produce vaccines developed by other pharmaceutical companies. While the first 2 were available to produce the Pfizer / Biontech vaccine, Bayer will produce, from 2022, the vaccine being developed by the German company CureVac. Bayer’s goal is to produce 160 million doses in the first 12 months. The pandemic appears to be beginning to losing strength in the US, where 144,000 cases of COVID-19 were diagnosed on Saturday, less than the average of almost 158,000 from the previous seven days. 2,786 people died, compared to an average of about 3,200 deaths per day for the previous two weeks.
• MACROECONOMY:
• President Biden will meet today with 10 Republican senators who have counter-proposed a smaller bill than the $ 1.9 trillion to seek a settlement. The group of senators on Sunday offered a proposal alternative to the economic stimulus package in the range of $ 500 billion to $ 600 billion. This package could be approved quickly to address urgent needs, including expiration of benefits unemployment, and Democrats could proceed with the rest of Biden’s proposal using a party budget tool.
• The Eurozone seasonally adjusted unemployment rate stood at 8.3% in December 2020, in line with market expectations and above 7.4% a year earlier. There are 13.616 million unemployed. At highest unemployment rates were registered in Spain (16.2%), Italy (9%), France (8.9%), while the smallest were registered in the Netherlands (3.9%) and Germany (4.6%).
• IHS Markit Eurozone Manufacturing PMI pointed to an expansion of manufacturing activity in the Euro Zone by seventh consecutive month and again at a marked pace, in all three major market groups, mainly in the intermediate goods and investment sectors. The best growth in the industry manufacturing industry was again verified in countries with strong export bases, such as Holland and Germany. Confidence increased to a maximum of three years, mainly in the hope that the distribution of vaccines in the coming months will help increase economic activity
• Retail sales in Germany fell 9.6% month-on-month in December 2020, worse than forecasts market, which expected a 2.6% drop. It’s the first drop in 3 months due to the second block COVID-19, which led to the partial closure of retail in the country since December 16. Regarding the year retail sales increased 1.5%. Considering the year 2020, retail sales increased 3.9% in relation to the previous period.
• According to the IHS Markit / CIPS UK Manufacturing PMI survey, the UK manufacturing sector decelerated sharply in early 2021, as production growth slowed and new orders fell slightly, as producers faced weaker flows of new export jobs and temporary supply chain disruptions caused by COVID-19 restrictions and transport delays (especially in ports) after the end of the Brexit transition period. The main positive influence on PMI was a sharp increase in supplier delivery times, which (except April 2020) was the longest ever registered. In addition, employment increased for the first time in a year.
• ACTIONS: Alphabet, Amazon, Exxon Mobil and Pfizer, are expected to release their quarterly results this week.
• OTHERS: The Myanmar military carried out a coup d’état on Monday and arrested the country’s leader, Nobel of Peace Aung San Suu Kyi, alleging fraud in the elections disputed on November 8, 2020. After the announcement of the coup, the military declared a year of state of emergency, and that the president in this period will be General Min Aung Hlaing, chief of the armed forces. In a note broadcast by the state broadcasters, since the others had their signals blocked, the military still said they would call “new elections” after that period. With that, the country that had its first civilian government from 2015, after 25 years of military dictatorship, will return to live under a regime not democratic.

Highlights

Released yesterday afternoon, minutes from the FOMC meeting held this week, revealed that the FED decided to maintain the base rate US interest rate close to zero, as well as maintaining the asset purchase program at $ 120 billion a month. Since beginning of the pandemic, the Fed expanded its acquisitions by more than $ 3 trillion, bringing its balance sheet to almost $ 7.5 trillion, trying to boost economic activity as much as it can. For many companies and families, cheap credit is the salvation to pay the bills until the economy returns to normal. The institution reinforced its commitment to low rates, promising not to start climbing them, even if the information approaches or exceeds the target of 2% pa. At the press conference In the press, FED leader Jerome Powell recalled that the challenges are still enormous. Despite all the efforts of the Institution, the US employment and retail sales fell in December, and the number of Americans filing new jobless claims has been on the rise since November.

Expecting the results of the FOMC meeting, and reflecting the efforts of the US government to strengthen the USD, yesterday EURUSD closed with a 0.43% drop, reaching 0.85% devaluation over the session. Today, EURUSD is operating in relative stability, around 1.21, between 1.2090, where the POC is, and 1.2110. DXY is being traded at the level of 90,800 points, gaining value. The USDJPY is oscillating close to 104.4, also rising. USDCHF is hovering close to $ 0.8913, also rising. Gold is trading at $ 1,839.2 an ounce, and silver at $ 25.3 an ounce.

Among the news expected for today are: Consumer Confidence Index in Europe; inflation in Germany; GDP of 4Q20 in the USA; as on every Thursday, data are released today about the unemployment insurance claims in the USA made in the last week; data regarding the sale of homes in the USA.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: The negotiations between AstraZeneca and the EU have not progressed in any direction. Pfizer also announced which will delay vaccine deliveries in the coming weeks. German Health Minister Jens Spahn issued an alert predicting “at least another 10 difficult weeks” with the supply of vaccines below schedule. Following the action taken by Sanofi, Novartis AG is in negotiations to help produce vaccines from other pharmaceutical companies.
• MACROECONOMICS: o The German government reduced its growth forecasts for 2021 from 4.4% to 3% before, and the Minister for Economy said the country must meet the lockdown in the coming weeks to try to contain the virus
• Consumer prices in Germany increased 1% year-on-year in January 2021, the first increase in seven months and above market forecasts of 0.7%. The temporary reduction in the VAT rate aimed at reviving the economy during the coronavirus crisis ended on December 31. The lowest prices high CO2 emissions and the increase in minimum wages since January were also responsible for the increase in of the IPC. On a monthly basis, inflation increased to 0.8% from 0.5%, above forecasts of 0.4%.
• In Europe, the industry’s confidence indicator rose in January 2021, above market expectations. Assessments of the current level of order books have improved for the seventh consecutive month. At production expectations and product inventory assessments remained unchanged. Of the issues that did not enter the confidence indicator, managers’ opinions on export order portfolios also continued to improve, while their assessments of previous production deteriorated by the third consecutive month.
• UK car production fell 29.3% in 2020 to 920,928 units, the worst performance since 1984, with the pandemic being mainly responsible for the decline, especially for problems of component supply. Production for foreign buyers fell by 29.1%, while production for the United Kingdom it fell by 30.4%. Even in the midst of the global pandemic, exports continued to boost car manufacturing in the UK, with more than 8 out of 10 of all cars produced in the UK outside. The EU continued to be the UK’s largest export destination, with a 53.5% share.
• New US President Joe Biden announced an environmental package yesterday, putting an end to new oil and gas drilling on federal lands and the review of existing contracts of this type, subsidies for the fossil fuel sector, and also ordered the migration of the government’s fleet of cars and trucks to electric vehicles. The Senate Democratic majority leader, Chuck Schumer, called the package a national emergency declaration regarding the climate situation. Biden plans the US to stop using fossil fuels and reach carbon neutrality in 2050. He guaranteed, however, that new measures will not cause job losses – on the contrary. According to Biden there will be a generation of “jobs of the future”, with the creation of millions of jobs with remuneration above US $ 9 per hour
• The number of Americans applying for unemployment insurance dropped to 847,000 in the week ended on January 23, 2021, below market expectations of 875 thousand. Still, the complaints are far from the 200,000 level reported in February and are likely to remain high for some time, since the pandemic is far from being controlled. About 427 thousand people asked for help to the Pandemic Unemployment Assistance program, which covers workers who do not qualify for the unemployment insurance.
• US GDP grew by 4.3% in 4Q20, leaving the US with a projected annual contraction 2.4%, the first since 2009, when the economy shrank 2.5% after the financial crisis. The numbers came in line with market forecasts. Increases in exports, non-residential fixed investment, personal consumption expenses, fixed residential investment and investment in private stock were partially offset by reductions in state and local government spending and government spending federal. Imports increased. Considering the 2020 total, GDP contracted 3.5%, slightly less than projections of a 3.6% drop, and a 2.2% growth in 2019.
• ACTIONS: Apple and Facebook results released yesterday after the market closed beating forecasts, but stocks fell sharply in the pre-market. Tesla’s results were disappointing. Mastercard and Visa disclose results today. In the UK, EasyJet’s shares fell after the Company announced it would fly with a tenth of its normal schedule in the first three months of this year.

Highlights

In the expectation of greater fiscal stimulus in the USA, investors start the week pessimistic, with concerns about the still growing number of cases of COVID-19 in the main economies of the world and in relation to the slowness with which vaccination campaigns have been carried out. US President Joe Biden spoke to 16 senators on Sunday to discuss the $ 1.9 trillion plan. Legislators supported investment in the distribution of Covid-19 vaccines and testing for diagnosis of COVID-19, but the plan still faces Republican objections, as some have doubts about its size. In Europe, AstraZeneca and Pfizer said they will not be able to deliver the combined deliveries for the next few weeks.

Among the news expected today, the following stand out: unemployment in the United Kingdom, Retail Sales in the USA. Today the The FED Monetary Policy Committee (FOMC) starts its 2-day meeting, in order to announce its decisions tomorrow. The market is more volatile in these circumstances, usually devaluing the dollar in the expectation to appreciate in reality (buy the rumor, sell the suit). In addition, the Companies’ 4Q20 earnings release season is in full swing, for Techs shares, whose value rose sharply in the pandemic. The S&P 500 CFD reached its all-time high of 3863 points.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: The European Union has threatened to block AstraZeneca’s COVID-19 vaccine exports outside of the bloc after the drugmaker announced that deliveries will be reduced for a few weeks.
• MON MONETARY POLICY: The People’s Bank of China withdrew CNY 78 billion from the market, decreasing liquidity, a unusual move before the Lunar New Year holiday. PBoC advisor Ma Jun warned that the risks of asset bubbles will remain if China does not shift its focus to job growth and inflation management.
• FISCAL POLICY: Chuck Schumer, the majority leader in the US Senate, said the $ 1.9 stimulus plan trillion will not be approved until mid-March
• MACROECONOMICS: o In the UK, retail sales fell in January 2021, much worse than market forecasts. IT’S the lowest reading since May, as restrictions in the UK gradually tightened, with across the country in a total blockade since January 5. Among the subsectors, grocery stores and furniture retailers reported stable sales, while the other sub-sectors (including clothing and recreational items) recorded sharp falls. Online sales declined slightly around the long-term average. While Therefore, the ratio between inventories and expected sales increased, but remained below its average of long term. Sales are expected to continue falling next month. o Prime Minister of Italy, Giuseppe Conte, delivered his resignation to the country’s president today, Sergio Mattarella, who will start consultations with party leaders tomorrow afternoon, adding that he asked for Expect to remain on an interim basis while these conversations take place. The crisis started when Prime Minister and Senator Matteo Renzi, leader of the small center party Italia Viva (IV), decided to break with the government for disagreeing with its economic policies and for managing the transfers that the country receives from the Union European Union.
• AÇÕES: Na Espanha, a Naturgy viu suas ações saltarem mais de 15% depois que a firma de investimento em infraestrutura IFM se ofereceu para comprar uma participação de 22,69% na empresa espanhola de gás natural e energia elétrica. Além disso, a empresa farmacêutica espanhola PharmaMar saltou 15% depois que a revista científica Science publicou um artigo que confirmou que seu medicamento Plitidepsin tem uma “potente eficácia pré-clínica” contra o COVID-19.

Highlights

In the expectation of greater fiscal stimulus in the USA, investors start the week pessimistic, with concerns about the still growing number of cases of COVID-19 in the main economies of the world and in relation to the slowness with which vaccination campaigns have been carried out. US President Joe Biden spoke to 16 senators on Sunday to discuss the $ 1.9 trillion plan. Legislators supported investment in the distribution of Covid-19 vaccines and testing for diagnosis of COVID-19, but the plan still faces Republican objections, as some have doubts about its size. In Europe, AstraZeneca and Pfizer said they will not be able to deliver the combined deliveries for the next few weeks.

Throughout today, several members of the ECB make speeches, with President Lagarde making 2. This week she has a decision to monetary policy of the FED, which will be released on Wednesday, and the 4Q20 earnings release season continues, with highlights for Apple, Microsoft, Facebook and Tesla.

EURUSD made the Asian session stable, until just before the European market opened the asset jumped quickly from 1.2151 to 1.2189. DXY is being traded at the level of 90.2 thousand points. The USDJPY is hovering close to 103.7. USDCHF is hovering close to $ 0.8850. Gold is trading at $ 1,851.6 an ounce, and silver at $ 25.3 an ounce.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: after much resistance, Spain finally announced on Friday that it will reduce social contacts, to the As infections increase and pressure on hospitals intensifies. In Madrid, new restrictions will enter effective January 25 and will include new rules on meetings at home, establishments and limited table capacity in restaurants.
• MONETARY POLICY: this morning the President of the European Central Bank, Christine Lagarde, spoke at a meeting ILF online conference on “Green Banking: What are the right concepts?” She said the ECB is forming an ATR Up ATR Down ATR% POC VWAP 1.2204 1.2123 64% 1.2175 1.2170 Page 2 climate change center to coordinate the bank’s thinking on how best to incorporate issues to monetary policy and banking supervision. There was no mention of monetary policy. Investors are look forward to her second appearance of the day, where she will participate in a panel discussion at the World Economic Forum (WEF) in Davos, talking about ‘Restoring economic growth’.
• MACROECONOMY: The Ifo Business Climate indicator for Germany fell to 90.1 in January 2021, below market forecasts of 91.8. It is the lowest reading in seven months, as companies have become less optimistic both in relation to current conditions (89.2 vs 91.3) as to expectations (91.1 vs 93). Many service providers have been affected by the blockade, including transportation and logistics. Retail has collapsed while the industry continues well positioned. Economic uncertainty has grown and German GDP is expected to stagnate in the first quarter.
• ACTIONS: “Historically, when Democrats control the White House and Congress, SMID-cap returns exceeded the large cap. In addition, SMID-caps are more focused on the domestic market, which should benefit from spending on infrastructure and locations. ” BoFA strategists said in a note. Despite the recent performance superior in technology stocks, analysts reiterated the views that cyclical and value stocks will have a outperform as economies recover.
• DAVOS: this week the World Economic Forum takes place. In the next 5 days, business leaders, governments and Civil societies should debate how to strengthen long-term prosperity. The President of the Economic Forum World Cup, Klaus Schwab expressed some concerns regarding the current scenario:
• The next generation will suffer not only from indebtedness that they will inherit, but also from social and educational systems. “It is necessary to integrate young people more into economic and political decisions, to give them more the word, even if it can be provocative ”;
• On the other hand, the pandemic will have positive effects on raising awareness among the most vulnerable. a inclusive capitalism must take the place of shareholder capitalism. Business is no longer serving only short-term objectives for shareholders but they are also considering that they need to act as social organisms at the service of people, the planet and society in general. “We can propose a model with a strong social dimension ”;
• Schwab also stresses that “we are going to orient ourselves towards a new bipolar world, dominated by the USA and China”. THE Europe will play an important role, as a catwalk between the USA and Asia.

MACROECONOMICS:

• o Preliminary data from PMI showed that business activity across Europe fell in January, led worsening conditions in the service sector and weakening industrial growth, both in restrictions imposed to contain the pandemic. The IHS Markit Eurozone Manufacturing PMI has dropped to 54.7 in January 2021, from 55.2 in December, according to estimates. The reading came slightly above the market expectations of 54.5 and pointed to slower, albeit strong, growth in manufacturing activity. Even so, the factory’s production grew for the seventh consecutive month thanks to the sustained growth of new orders, exports and back orders. The strong growth of industrial production in Germany contrasted with a renewed drop in production in France and a comparatively moderate increase in rest of the euro area. Finally, optimism among manufacturers reached a maximum of three years. The fee of factory production growth has weakened to the slowest since the recovery began and the services saw production fall for the second fastest rate since May. In January, employment across the area euro fell for the eleventh consecutive month, but the overall rate of decline was the lowest recorded since the beginning of the pandemic
• o The Flash Germany Composite Output Index, which shows how Purchasing Managers in Germany evaluate the period, dropped to 50.8 in January, from 52.0 in December, with an increase in industry (pulled by exports to China and the USA) contrasting with a drop in services. The survey revealed delays without precedents in delivering inputs to manufacturers amid increasing pressure on supply chains and generalized freight interruptions. The survey also found that employment in the private sector increased in January due to the improvement in business expectations regarding the activity in the next 12 months. The general degree of optimism was the highest in almost three years, with companies hoping that the loosening restrictions at the end of 2021 will help to boost the recovery in economic activity and demand.
• The IHS Markit France Composite PMI dropped to 47 in January 2021 from 49.5 in the previous month and below market expectations of 49, showed a quick estimate. The most recent reading pointed to a fifth consecutive contraction in private sector activity, as the country continued to try to contain the second large-scale outbreak of the virus. Although production and new orders continue to fall, companies French companies increased the number of employees for the first time in almost a year. Meanwhile, costs of inputs faced by private sector companies continued to increase in January, extending the current eight-month inflation period. In addition, the most recent increase was the strongest in a year and significant overall. Looking to the future, companies remained optimistic about the outlook 12-month business, with the degree of optimism being the second strongest since before the escalation of the pandemic last March.
• Retail sales in the UK in December 2020 increased by 2.9% over the same period in last year. Retailers without a physical store reported the highest growth in this comparison, of 43.5%, while food stores grew by 4.4%. In 2020, retail sales in the UK decreased by 1.9% in relation to 2019, the biggest annual drop on record, driven mainly by retail stores clothing (-25.1%), fuel stores (-22.2%), “other stores” (-11.6%) and department stores (-5.2%). At the However, sales by retailers without a physical store increased 32.0% in 2020

OTHERS:

• Bitcoin faltered on Friday and was headed for its sharpest weekly drop since September, as that concerns about regulation and its rapid recovery have increased. Bitcoin was being traded more than 20% below the $ 42,000 record set two weeks ago, amid growing concerns that it is one of several price bubbles and how cryptocurrencies catch the attention of regulators. During a hearing in the US Senate on Tuesday, Janet Yellen, President Joe Biden’s choice to head the US Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities. This followed a European Central Bank President Christine Lagarde’s call for global regulation last week of bitcoin.

Highlights

Optimistic investors are now that Democrat Joe Biden is ahead of the world’s largest economy. In his first speech as President of the USA, Biden highlighted

The ECB kept an open door for further stimulus but Christine Lagarde warned that the risks of increased infections and new blockages can weigh on as a benefit, making the hope that the global economy may return to normal it becomes increasingly distant, despite the progress being made in vaccinations. The Prime Minister of the Kingdom United, Boris Johnson, signaled that the current blockade in the country may last until the summer. German Chancellor Angela Merkel said that it would be late September before anyone wishing to be vaccinated could get an injection.

EURUSD made the Asian session stable, until just before the European market opened the asset jumped quickly from 1.2151 to 1.2189. DXY is being traded at the level of 90.2 thousand points. The USDJPY is hovering close to 103.7. USDCHF is hovering close to $ 0.8850. Gold is trading at $ 1,851.6 an ounce, and silver at $ 25.3 an ounce.

Among the many news expected today are: retail sales and public sector finance in the UK; pace of private sector activities in France; the Purchasing Managers Index (PMI) survey from Germany. We USA, PMIs will be released at 9:45 am and existing home sales in December at 10am.

The main factors considered by investors for their decision making at the moment are:

MACROECONOMICS:

• o Preliminary data from PMI showed that business activity across Europe fell in January, led worsening conditions in the service sector and weakening industrial growth, both in restrictions imposed to contain the pandemic. The IHS Markit Eurozone Manufacturing PMI has dropped to 54.7 in January 2021, from 55.2 in December, according to estimates. The reading came slightly above the market expectations of 54.5 and pointed to slower, albeit strong, growth in manufacturing activity. Even so, the factory’s production grew for the seventh consecutive month thanks to the sustained growth of new orders, exports and back orders. The strong growth of industrial production in Germany contrasted with a renewed drop in production in France and a comparatively moderate increase in rest of the euro area. Finally, optimism among manufacturers reached a maximum of three years. The fee of factory production growth has weakened to the slowest since the recovery began and the services saw production fall for the second fastest rate since May. In January, employment across the area euro fell for the eleventh consecutive month, but the overall rate of decline was the lowest recorded since the beginning of the pandemic
• o The Flash Germany Composite Output Index, which shows how Purchasing Managers in Germany evaluate the period, dropped to 50.8 in January, from 52.0 in December, with an increase in industry (pulled by exports to China and the USA) contrasting with a drop in services. The survey revealed delays without precedents in delivering inputs to manufacturers amid increasing pressure on supply chains and generalized freight interruptions. The survey also found that employment in the private sector increased in January due to the improvement in business expectations regarding the activity in the next 12 months. The general degree of optimism was the highest in almost three years, with companies hoping that the loosening restrictions at the end of 2021 will help to boost the recovery in economic activity and demand.
• The IHS Markit France Composite PMI dropped to 47 in January 2021 from 49.5 in the previous month and below market expectations of 49, showed a quick estimate. The most recent reading pointed to a fifth consecutive contraction in private sector activity, as the country continued to try to contain the second large-scale outbreak of the virus. Although production and new orders continue to fall, companies French companies increased the number of employees for the first time in almost a year. Meanwhile, costs of inputs faced by private sector companies continued to increase in January, extending the current eight-month inflation period. In addition, the most recent increase was the strongest in a year and significant overall. Looking to the future, companies remained optimistic about the outlook 12-month business, with the degree of optimism being the second strongest since before the escalation of the pandemic last March.
• Retail sales in the UK in December 2020 increased by 2.9% over the same period in last year. Retailers without a physical store reported the highest growth in this comparison, of 43.5%, while food stores grew by 4.4%. In 2020, retail sales in the UK decreased by 1.9% in relation to 2019, the biggest annual drop on record, driven mainly by retail stores clothing (-25.1%), fuel stores (-22.2%), “other stores” (-11.6%) and department stores (-5.2%). At the However, sales by retailers without a physical store increased 32.0% in 2020

OTHERS:

• Bitcoin faltered on Friday and was headed for its sharpest weekly drop since September, as that concerns about regulation and its rapid recovery have increased. Bitcoin was being traded more than 20% below the $ 42,000 record set two weeks ago, amid growing concerns that it is one of several price bubbles and how cryptocurrencies catch the attention of regulators. During a hearing in the US Senate on Tuesday, Janet Yellen, President Joe Biden’s choice to head the US Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities. This followed a European Central Bank President Christine Lagarde’s call for global regulation last week of bitcoin.

Highlights

Optimistic investors are now that Democrat Joe Biden is ahead of the world’s largest economy. In his first speech as President of the USA, Biden highlighted:

• About the pandemic: “We are entering the most severe and deadly phase of the virus. We must put aside political ideas and face this pandemic as a nation. ” Biden has indicated he will work to make masks mandatory in public places in the USA and that will direct more resources to the vaccination campaign. Biden has also reversed the Trump administration’s decision to leave the World Health Organization (WHO): “WHO plays a crucial role in worldwide fight against the deadly Covid-19 pandemic, as well as countless other threats to global health and security sanitary. The United States will continue to be a full participant and global leader in addressing such threats and advancing global health and health security “. Today the government’s plan to combat the pandemic was released Biden, allowing you to use the wartime powers (Defense Production Act) to demand that US companies provide all the necessary equipment to fight the pandemic. A key component of the plan is to restore American public confidence, safely reopening schools, business and travel, as well as delaying spread of the virus.
• About his way of doing politics: “The right to disagree peacefully, within the limits of our republic, is perhaps the greatest strength of our nation. But listen to me well, disagreement does not have to lead to disunity. ” In his first hours in the cargo Biden returned the US to the Paris Agreement, resuming commitments to reduce carbon emissions in the atmosphere to contain global warming. This decision in relation to US environmental policies tends to open opportunities for sectors such as biofuels, in addition to reinforcing trends in favor of diversity and sustainable development.

EURUSD made the Asian session higher, opening the European session above 1.2135. Today the asset is influenced by expectations on the European Central Bank’s monetary policy decision to be released later in the day. Employees are expected to of the ECB leave monetary policy unchanged, however, the market tends to price an expectation to later sell the reality. DXY is being traded at the level of 90.2 thousand points. The USDJPY is oscillating close to 103.4. USDCHF is hovering close to $ 0.8869.

Gold is trading at $ 1,871.9 an ounce, and silver at $ 25.9 an ounce. Metals follow Page 2 in appreciation especially because they are the hedge used by the market in relation to inflation that the trillions of dollars that will be injected into the economy by the new US government is expected to cause. Among the many news expected today are: unemployment insurance claims in the USA, and the Confidence Index of the Consumer in Europe, and inflation in Japan and Consumer Confidence Index in the UK, those last 2 at night, after the closing of markets.

The main factors considered by investors for their decision making at the moment are:

• MACROECONOMICS: The Industry Confidence Index in France increased by 4 points in January 2021 compared to the previous month reaching its highest level since March 2020. There was an improvement in the opinion on order books (- 25 vs -32 in December) and in the evaluation of previous production (12 vs 5). However, the general prospects for production worsened (-9 vs -5). o Sales by the Italian industry fell 2.0% in November 2020 compared to the previous month. New orders of industrial goods in Italy fell 1.3% in relation to the previous month, with the demand of the domestic market decreasing 3.8% and the foreign market increasing 2.5%. In relation to the same period in the previous year, sales fell 4.6%, factory orders increased 5.3%. o Spain recorded a trade deficit of 593 million euros in November 2020, well below the deficit 1.948 million euros a year earlier, the smallest trade deficit in any month of November since 1985. Exports fell 1.3%, dragged by a 1.2% drop in capital goods, and a 13.6% drop in planes. Exports of food, beverages and tobacco increased by 5.2%, while by the automotive sector 4.3%. At imports fell 5.9%, due to a drastic cut in energy imports (-45.3%), automobiles (-19.4%) and textiles (-8.1%). o The UK Industry Confidence Index fell to -22.0 in the first quarter of 2021, as manufacturers expect a sharp drop in both production and new orders over the next three months. The stock rose before Britain left the EU.
• ACTIONS: the earnings release season continues with Baker Hughes, Union Pacific and Citrix reporting ahead of opening of the market, while Intel, IBM and CSX after closing. Bankinter of Spain said its net profit in 2020 it fell 42.4% in relation to the previous year, still exceeding market expectations, since it registered more loan loss provisions to offset a potential impact of the coronavirus crisis on their Business. Procter & Gamble Co increased its sales forecast for 2021 for the second time as it benefited from the demand driven by COVID-19 for cleaning products. However, the Company warned that the pace of sales may decline as vaccine distribution continues.

Highlights

EURUSD opened the session higher, recovering the devaluation of the finalizations, as shown in the graph below, exceeding the level of 1,216. However, during a European session it fell sharply, and breached a 1.21 barrier. DXY is being traded at the level of 90.6 thousand points, with the market awaiting the inauguration of Joe Biden and the execution of his proposals. O USDJPY is hovering close to 103.8. The USDCHF is oscillating close to $ 0.8904. Gold is trading at $ 1,840.5 a ounce, and silver at $ 25.3 an ounce.

Among the news expected for today are: inflation and PPI (producer price index, or producer inflation index) for the Zone of the euro and the United Kingdom. And Joe Biden’s inaugural address.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: The European Commission asked member states to accelerate the implementation of vaccination across the block, so that they vaccinate at least 80% of health professionals and citizens over 80 by March, and at least 70% of the total populations this summer. Germany set yesterday to extend the lockdown until February 14.
• MACROECONOMICS:
• Eurozone consumer prices fell 0.3% in December 2020 compared to the previous year, pulled mainly by energy (-6.9%) and non-energy industrial goods (-0.5%).
• Food inflation, on the other hand, alcohol and tobacco slowed to 1.3%, while the cost of services increased 0.7%. The core of inflation which excludes volatile energy, food, alcohol and tobacco prices and for which the ECB analyzes its policy decisions, remained virtually unchanged in December, at 0.2%, the lowest value ever recorded.UK inflation rose to 0.6% in December 2020 from 0.3% in November and slightly above market forecasts of 0.5%, as some restrictions on coronavirus have been eased. The biggest upward contribution came from transportation (1.9%), especially airline tickets and used cars; clothing and footwear (-1.8%); recreation and culture (2.6%); and alcohol and tobacco (3.6%). Conversely, the ATR Up ATR Down ATR% POC VWAP 1.2182 1.2093 62% 1.2143 1.2139 Page 2 main downward pressures came from food and non-alcoholic beverages (-1.4%); furniture (-0.7%); Communication (2.6%); and restaurants and hotels (0.1%).
• German producer prices unexpectedly increased by 0.2% in December 2020 compared to the previous year, the first annual increase since January, and failing market forecasts for a fall in 0.3%. Intermediate goods prices increased 0.8%, mainly due to precious metals (18.4%), secondary metallic raw material (17.0%) and copper (11.5%). There have also been increases in capital goods (0.9%) and durable consumer goods (1.6%). Meanwhile, energy prices fell 0.1%, led by lower costs for oil products (-13.5%) and distribution of natural gas (-3.3%); while the cost of non-durable consumer goods decreased by 1.9%, driven by food prices (-3.3%). Considering the year 2020, producer prices fell 1%, after increasing 1.1% in 2019.
• USA ELECTIONS: Joe Biden takes office today as the 46th president of the United States. The ceremony will be marked by absence of the usual crowds for inaugurations due to the Covid-19 pandemic. The death toll from the pandemic in the USA it reached 400,000 yesterday. Although the outbreak of infections appears to have peaked, it is on track to overcome the number of deaths in the USA in World War 2 by the end of the month.
• ACTIONS: several companies in Europe, including ASML (integrated circuits, such as RAM, flash memory chips and CPU), Richemont (Swiss luxury goods conglomerate) and Burberry reported strong quarterly results. The actions of the BHP Group rose 1% after the company forecast record iron ore production for fiscal year 2021, while Burberry jumped more than 4% in its optimistic outlook for sales growth in Asia. The result Netflix’s performance was below expectations, but the company reported strong growth in subscriber numbers. Walt Disney said on Tuesday that it discarded performance bonuses last year for top executives. Morgan Stanley, Bank Of New York Mellon, UnitedHealth and P&G release the results today.

Highlights

EURUSD opened the session higher, recovering the devaluation of the last sessions, as shown in the graph below, returning to the above 1,212. DXY is being traded at the level of 90.5 thousand points, after reaching 90.9, with the more conservative market in the face of the growing economic challenges faced by the world’s major economies. The USDJPY is hovering close to 103.9. The USDCHF is oscillating close to $ 0.8879. Gold is trading at $ 1,841.8 an ounce, and silver at $ 25.3 an ounce.

Entre as notícias esperadas para hoje se destacam: audiência de audiência da Secretária do Tesouro Yellen no Senado norteamericano; o Índice de Sentimento Econômico ZEW, que aponta o ânimo dos analistas de investimento a respeito da atividade econômicos nos próximos meses na Europa e na Alemanha; e o ritmo de crescimento do setor de construção civil da Zona do euro.

Among the news expected today, the following stand out: the confirmation hearing of the Secretary of the Treasury Yellen in the North American Senate; the ZEW Economic Sentiment Index, which points the mood of investment analysts regarding the activity in the coming months in Europe and Germany; and the pace of growth in the eurozone construction sector.

Today is Donald Trump’s last day ahead of the USA, tomorrow Joe Biden takes office. The climate of insecurity is strong in Washington, following the invasion of Trump supporters to the Capitol a few weeks ago. The first 100 days of the government of Joe Biden should be focused on the vaccination campaign against COVID-19 and on providing great tax aid. Biden must also present a comprehensive immigration bill on the first day of his administration, providing a eight-year path to citizenship for about 11 million people living in the United States without status cool.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: The German Chancellor and the heads of German states are due to announce today an extension and tightening of the current lockdown until mid-February. The pandemic continues to spread strongly across Europe, with the United Kingdom, France, Italy and Spain have one of the highest death tolls in the world, the highest on record. To date, 94.8 million cases have been recorded worldwide, with more than 2 million deaths, while almost 40 million doses of the vaccine have already been applied.e casos levou a OMS a fazer um apelo por medidas mais rígidas em todo o continente. A chanceler alemã Angela Merkel advertiu que “os meses mais difíceis” da pandemia ainda estão por vir. O total de infecções na Alemanha aumentou em 26.663 nas últimas 24 horas, totalizando 1,84 milhão de pessoas infectadas no país, enquanto as mortes mais do que dobraram desde o início de dezembro, totalizando 38.000 fatalidades. Em Londres, os hospitais podem ficar sem leitos de UTI em duas semanas se o ritmo atual de disseminação da doença se mantiver como está. A farmacêutica alemã Bayer AG, em parceria com a CureVac NV, está em buscando aprovação internacional para distribuir sua vacina contra o coronavírus, que usa a mesma tecnologia de RNA mensageiro das vacinas da Moderna e da Pfizer
• MACROECONOMY: the construction sector in the Eurozone contracted 1.3% in November 2020 in relation to the the same month in the previous year. It is the third consecutive month of decline in the sector. In relation to October, month immediately previous year, the sector grew 1.4%. The ZEW Economic Sentiment Indicator for the Euro Zone rose 3.9 points in compared to the previous month to 58.3 in January 2021, with about 69% of analysts interviewed improvement in economic activity in the coming months, 11% expecting a worsening and 20% estimating stability. Already the indicator on the current economic situation in the Eurozone fell 3.2 points to -78.9. The ZEW Sentiment Indicator Economic for Germany rose 6.8 points from the previous month to 61.8 in January 2021, exceeding the market expectations of 60.0. The economic outlook for the German economy has improved, reinforced by export expectations. About 71% of analysts interviewed predicting an improvement in economic activity in the coming months, 9% of them expect worsening and 20% expecting stability. The assessment of the economic situation in Germany has changed little at -66.4.
• USA ELECTIONS: Investors awaiting confirmation hearing from former Fed chairman Janet Yellen for the post Secretary of the Treasury, which takes place today in the Senate. According to the Wall Street Journal, Yellen must state the US commitment to market-determined exchange rates, making it clear that the US does not seek a weaker dollar to gain competitive advantage. Biden outlined a $ 1.9 stimulus package proposal trillion last week, saying that an investment of this size would be necessary. The proposed package includes US $ 415 billion for the vaccination campaign against COVID-19, about $ 1 trillion in direct aid to families and about $ 440 billion for small businesses and communities particularly hard hit by the pandemic. “Neither President-elect nor I propose this relief package without an assessment of the country’s debt burden. But now, with interest rates at historic lows, the smartest thing we can do is act grand, ”said Yellen, former EDF president. Yellen also said that the US economy must be rebuilt “so that it creates more prosperity for more people and ensure that American workers can compete in a global economy increasingly competitive “
• ACTIONS: the shares of companies in the automotive sector are operating at a low level, through the disclosure of demand for new passenger cars in the European Union, which fell 3.3% in December 2020. Italy (-14.9%) and France (-11.8%) suffered double-digit losses, while Germany recorded a solid gain (9.9%) and Spain remained stable. Considering 2020, the EU passenger car market decreased 23.7% with all 27 EU markets registering falls. Spain recorded the sharpest drop (-32.3%), followed by Italy (-27.9%), France (-25.5%) and Germany (-19.1%). In the USA, in the middle of the earnings release season, Bank of America and Goldman Sachs disclose the 2020 balance sheet before the market opens while Netflix does so after the market closes. THE Qualcomm said it will acquire Nuvia Inc, a chip startup founded by Apple for $ 1.4 billion.

News

Reuters article states that Joe Biden’s management may be uncomfortable for Wall Street, with the appointment of two people left to lead the country’s main financial agencies.

Gary Gensler’s appointment to head the Securities and Exchange Commission (SEC) and Rohit Chopra, to the Bureau of Protection Consumer Finance (CFPB), means that these bodies will work on political priorities on climate change and justice Social. President of the derivatives regulator from 2009 to 2014, Gensler implemented new swap trading rules created by Congress after the financial crisis, developing a reputation as a tough trader willing to face powerful interests from Wall Street. Chopra helped establish the CFPB after the crisis and served as its first loan ombudsman student. At the FTC, he campaigned for tougher rules for big tech companies about privacy and consumer competition, and stricter enforcement penalties

Sherrod Brown, who is expected to lead the Senate’s powerful Banking Committee, said he plans to try to repeal the rules friendly to Wall Street introduced by Donald Trump. On Monday, Brown hailed Chopra as a “bold” choice that it would ensure that the CFPB “played a leading role in combating racial inequalities in our financial system”. Chopra is expected to review the rules on payment and debt collection loans, which consumer groups influential people say they will not protect Americans. They also expect it to eliminate exorbitant lending rates and abusive debt collection practices, address the burden of student debt and the gaps in minority access to credit. Gensler “would hold bad actors accountable” and put “working families first,” according to Borwn. Expected Gensler to seek new corporate disclosures about risks related to climate change, political spending and the composition and treatment of the company’s workforce, and complete post-crisis executive compensation restrictions, other rules.

Highlights

While the US Congress was meeting to close the case and declare Joe Biden the winner of the previous presidential 2020 yesterday afternoon, Trump supporters broke into the Congress building, smashed windows and climbed walls, in the desperate intention to keep or republican in power. Four people died (one shot and three due to medical emergencies) and 52 people were arrested. Chaos ensued after Trump – who before the election refused to commit to a peaceful transfer of power should he lose – speak to thousands of supporters near the White House and ask them to march towards the Capitol to express their discontent to parliamentarians. After a long debate, the The Senate and the Chamber rejected two objections to the vote count and certified the final result of the election, with 306 votes to Biden and 232 for Trump. This result places Donald Trump as the first American president since 1932 to lose the White House and both Houses of Congress in just one term. Twitter, Facebook and Snap temporarily blocked Trump’s accounts on his social networks.

Also yesterday afternoon, Democrat Jon Ossoff won the second seat of the state of Georgia in the North American Senate, guaranteeing Democrats control of the Senate, increasing the chance of implementing the Senate’s proposals. President Joe Biden, and the approval of progressive judges and the promotion of legislative priorities such as aid coronavirus and measures to contain climate change.

While all this was going on, EURUSD shot up from 1.227 to 1.233, at which point today’s session opened. THE The Asian session kept the currency at this level but with the opening of the European market, the asset plummeted to 1.225. Before opening of the North American market, ATR was already at 126%. DXY is being traded at 89.8 thousand points. O USDJPY is hovering close to 103.6, higher. The USDCHF is oscillating close to $ 0.884, with a slight devaluation of the currency Switzerland. Gold is trading at $ 1,917 an ounce in a slight drop, as is silver at $ 27.1 an ounce.

Investor optimism may begin to wane as the pandemic continues to spread, and the possibility that the holiday season may have spread the virus even more begins to confirm itself.

The market is monitoring the release of unemployment data in the US, which happens today and gives strong indications about the general panorama of the country’s economy.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: o governo do Japão declarou estado de emergência na capital japonesa, Tóquio, e nas vizinhas Kanagawa, Saitama e Chiba, desde esta sexta-feira até 7 de fevereiro. Esta medida é menos restritiva do que as tomadas pelos governos europeus, pois o país já enfrenta a pior contração econômica já registrada. A China proibiu todos os veículos e pessoas de deixar a cidade de Shijiazhuang, ao sul de Pequim, após a confirmação de quase 200 infecções por coronavírus. Mais de 10 milhões de pessoas serão testadas para o vírus na região. Houve 90 casos confirmados e mais de 100 infecções assintomáticas detectadas em Shijiazhuang e nas proximidades de Xingtai. As infecções aumentaram em Hebei após o feriado de Ano Novo, com o primeiro caso confirmado relatado no sábado. A paciente, uma mulher de 61 anos, visitou parentes e compareceu a eventos antes de ser diagnosticada. Na Europa, o número crescente de casos levou a OMS a fazer um apelo por medidas mais rígidas em todo o continente. A chanceler alemã Angela Merkel advertiu que “os meses mais difíceis” da pandemia ainda estão por vir. O total de infecções na Alemanha aumentou em 26.663 nas últimas 24 horas, totalizando 1,84 milhão de pessoas infectadas no país, enquanto as mortes mais do que dobraram desde o início de dezembro, totalizando 38.000 fatalidades. Em Londres, os hospitais podem ficar sem leitos de UTI em duas semanas se o ritmo atual de disseminação da doença se mantiver como está. A farmacêutica alemã Bayer AG, em parceria com a CureVac NV, está em buscando aprovação internacional para distribuir sua vacina contra o coronavírus, que usa a mesma tecnologia de RNA mensageiro das vacinas da Moderna e da Pfizer
• MACROECONOMY: The core of European annual inflation, which excludes volatile prices for energy, food, alcohol and tobacco and for which the ECB analyzes its policy decisions, remained unchanged at 0.2%, the lowest ever recorded. The indicator consumer confidence in the Eurozone stood at -13.9 in December 2020, representing an increase of 3.7 points compared to the previous month. There was recovery in all four components: household assessments of your past and future financial conditions, your intentions to make important purchases and your expectations about general economic situation. The services confidence indicator in na decreased by 0.3 points to -17.4 in December 2020, well below market expectations of -15.0, due to more negative views on the situation. The industry confidence rose to -7.2 in December 2020, from -10.1 in the previous month and above expectations of the -8.1 market, with considerable improvements in the current level of order books. The Sentiment Indicator Economy in the Eurozone increased by 2.7 points over the previous month, to 90.4 in December 2020, easily surpassing the market consensus of 90.0, but still well below pre-pandemic levels. The recovery was driven by significantly greater confidence in the industry and among consumers and, to a lesser extent, in construction. In contrast, there were moderate declines in services and retail trade. Among the largest bloc economies, sentiment improved significantly in Italy (+6.8 points), Spain (+3.3 points) and, in to a lesser extent, in the Netherlands (+2.5 points) and France (+2.1 points), while it remained virtually unchanged in Germany (+0.1 points). However, new orders for German manufactured products increased unexpectedly 2.3% in November 2020 compared to the previous month. It is the 7th consecutive month of orders to factories, mainly in intermediate goods (4.9%), capital goods (1.1%) and consumer goods (0.5%). At domestic orders increased 1.6% and foreign orders 2.9%, with Eurozone orders increasing 6.1% and those of other countries 0.9%. Compared to February, factory orders were 4% higher.
• MONETARY POLICY: the minutes of the last 2020 meeting of the FOMC were released yesterday, maintaining the country’s interest rate between 0% and 0.25% per year. According to the document, the Fed should maintain the stimulus program via the purchase of securities and the market will be widely advised if this strategy changes. The EDF has been buying at least $ 120 billion in Treasury bills and mortgage-backed assets per month. EDF members believe that positive news about vaccine development strengthens the medium-term outlook for families. However, they also estimate that the challenges for the economy will grow in the coming months due to the pandemic proliferation. For them, the conditions of the North American labor market have improved, but still are far from the goal of full employment.
• ACTIONS: in the UK, retail giant Sainsbury’s reported strong Christmas sales and updated its earnings forecast for the whole year. In France, Veolia’s shares were among the best performing after the company said have sent an offer to the Suez board to buy the rest of its competitor’s shares. Both operate in the water and sewage treatment sector. In Japan, Fujifilm Holdings said it would invest $ 2 billion in a new productive plant in the USA. The Trump administration is considering adding Alibaba Group and Tencent to a list Chinese companies that are supposedly controlled by the Chinese military. In addition, the Stock Exchange from New York said on Wednesday it would remove three Chinese telecommunications stocks from the list, saying its last This reversal was due to the new orientation of the US government. The gaming website Roblox said it plans to go public for through a direct sale instead of an IPO, and raised new funds in a business that values ​​almost $ 30 billion.

Highlights

Facing the weakness of the dollar and a discouraging PMI, showing that the European economy contracted more than expected in December, EURUSD reached 1.2345 this morning, and remained at the level of 1.2335. DXY is being traded not level of 89.2 thousand points. The USDJPY is hovering close to 102.8, stable. Gold is trading at $ 1,955 an ounce rising, as well as silver at US $ 27.7 an ounce, due to the increase in expectations of disclosure in the main economies of the world. The USDCHF is oscillating close to $ 0.876, its lowest level since January 2015. The currencies of Australia and New Zealand reached its highest value in the past 3 years against the USD today. New Zealand reported only 2,186 cases and 25 deaths by COVID-19.

Investors are positioning themselves in riskier assets, excited about the possibility of a recovery faster economic growth as coronavirus vaccination campaigns are being carried out in the main economies of the world, indicating the end of the blockages caused by the pandemic. However, investor optimism may shrink if end-of-year parties have reinforced the pandemic and hospital occupancy rates are starting to rise this week.

For EURUSD, the D1 Stoch index remains in the middle of the chart. Stoch has not gone beyond the lines since December 18, 2020. Stoch does not go beyond the 30-point line, indicating oversold, since November 2, 2020. RSI in the same timeframe is just below the 70-point line, a position maintained since 12/21/20. The RSI does not go beyond the 30-point line, indicating oversold, since February 17, 2020.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: The European Medicines Agency must approve the use of Moderna’s vaccine today. In Spain, after partially easing restrictions during the Christmas holiday, regional governments once again imposed lockdowns, in amid what experts already describe as a third wave of the country’s pandemic, with 23,700 new cases registered yesterday. Chinese authorities are stepping up efforts to stem the spread of the coronavirus, amid an increase in infections transmitted locally near Beijing.
• MACROECONOMY: The US unemployment report for December is due on Friday. In the states United States, the Redbook Index, which points to the weekly growth of retail sales in the country, 5.5% growth in the week ended on January 2, 2021 compared to the same week in the previous year.
• MONETARY POLICY: the minutes of the last 2020 meeting of the FOMC will be released today. The Bank of England announced which will inject more money into the economy, as a compensation measure for the new blockade announced this week.
• USA ELECTIONS: The US Congress meets today to close the process and declare Joe Biden the winner of the elections presidential elections 2020. The market continues to follow the electoral process of senators in Georgia, which will determine whether Democrats, who already have a majority in the House, could also take over the Senate majority, which could increase the chance of implementing President Joe Biden’s proposals. Among these proposals are the increased fiscal stimulus, higher taxes through revision of the tax code, more regulation and higher infrastructure spending. Of the 2 seats to which the state of Georgia is entitled in the Senate, one will be occupied by Democrat Raphael Warnock, who defeated current Republican Senator Kelly Loeffler to become the first black senator from Georgia. The other seat is being contested by Democrat Jon Ossoff, a documentary filmmaker who, if win, he will become the youngest member of the Senate at 33, and by the current Republican Senator David Purdue. The victory in both contests she will give Democrats control of the Senate, creating a 50-50 split in the House and giving elected vice president, Kamala Harris, the tiebreaker after she and Biden took office on January 20.
• ACTIONS: The French tire industry Michelin has announced a plan to reduce its workforce by 10%, the equivalent to 2,300 jobs over the next 3 years. Amazon bought 11 jets from Delta and WestJet airlines to boost its growing delivery network. American jewelry store Tiffany & Co reported record sales at Christmas 2020, especially in China. US President Donald Trump yesterday signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay. Despite having announced yesterday the decision to withdraw from the trading floor the trio of Chinese companies in the communications sector China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd., the NYSE today announced the cancellation of the decision. This movement made the 3 companies lost more than $ 30 billion in market value. “The intention was to penalize these companies and penalize the Chinese government, ”said Shang-Jin Wei, professor of Chinese business and finance at Columbia Business School. “The problem is that it ends up penalizing investors based in the USA.” China Mobile, which was once part of a “red chip” boom in the late 1990s, was one of the first giants in the Asian country to sell shares in the USA. Until the Treasury Secretary Steven Mnuchin got into this fight yesterday, calling the NYSE president to express his discontent with the stock exchange’s decision to let the three companies continue to negotiate. They were also Head of Cabinet Mark Meadows, National Security Adviser Robert O’Brien and Director of the National Economic Council Larry Kudlow. The NYSE went back on the decision to take companies off the floor after realizing that he would be setting precedents and that he would have to do the same with other companies that don’t have nothing to do with the matter.

News

New car registrations in the UK in December 2020 decreased 10.9% from the previous year to 132,682 units. Demand fell in all segments: private (-13.9%), fleet (-8.3%) and business (-25.7%). Considering the year of 2020, new car registrations fell 29.4% to 1.63 million units, the lowest level since 1992. The Demand for private vehicles fell by 26.6% and registrations for large fleets declined by 31.1%.

Today, IHS Markit / PMI data were released, a survey conducted with Purchasing Managers, which shows the current pace and the perspectives of several economies.

Highlights

EURUSD started the first session of 2021 upwards, reaching 1.23, remaining at least 4 hours at the level of 1,229. DXY is being traded at 89.5 thousand points, with an unattractive dollar. The USDJPY is oscillating close to 102.7, down. Gold is trading at $ 1.934 an ounce at a high, as well as silver at $ 27.3 an ounce due to rising expectations of the world’s major economies. The SDCHF is hovering close to $ 0.88, at one of their lowest levels since 2015.

Investors are positioning themselves in riskier assets, excited about the possibility of a recovery faster economic growth as coronavirus vaccination campaigns are being carried out in the main economies of the world, indicating the end of the blockages caused by the pandemic.

For EURUSD, the D1 Stoch index remains in the middle of the chart, just above the 50-point line. Stoch does not go beyond lines since December 18, 2020. Stoch does not go beyond the 30-point line, indicating oversold, since 2 November 2020. The RSI on the same timeframe is just below the 70-point line, a position maintained since 12/21/20. The RSI does not go beyond the 30-point line, indicating oversold, since February 17, 2020.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: more than 85 million people have contracted COVID-19 and almost 1.9 million people have died from it, with countries like the USA and Japan reporting record numbers of infections and deaths daily. In Japan, just like in the UK, Italy, Greece, Austria and Germany, governments are about to enact new blockades, already that pandemic figures continue to rise. In the UK, where even schools remain closed, and yet the pandemic remains uncontrolled, more than one million people have already received the Pfizer and more than 500 thousand doses of the AstraZeneca vaccine will be available starting today for the vaccination. In the USA, 4.2 million doses of the vaccine have been administered. The German government has been criticized for ATR Up ATR Down ATR% POC VWAP 1.2292 1.2232 112% 1.2252 1.1258 Page 2 relation to its vaccination plan as the country could purchase and distribute vaccines independently from the EU, accelerating the country’s recovery, which has not been done.
• MACROECONOMY: IHS Markit / Manufacturing PMI data was released today, a survey conducted with Managers of Purchases, which indicate the current pace and prospects in the industry of several economies. IHS Markit / Services PMI will be released this Thursday, January 6th. More details in the “News” section of this report.
• FISCAL POLICY: Nancy Pelosi was re-elected yesterday as President of the US House, maintaining the Democratic leadership at home.
• MONETARY POLICY: dadps released by the Bank of England showed that mortgage approvals increased in November to the highest level since August 2007 and well above market expectations.
• ACTIONS: future indices in the US pointed to new records at the opening of the first trading day of 2021, amid expectations that vaccination against covid-19 could help control the pandemic and that fiscal support and continued monetary growth will drive the country’s economic recovery. Tesla Inc shares opened at record high today, after the electric car maker reported better-than-expected vehicle deliveries in 2020. In the United Kingdom, the shares of Ladbrokes’ owner Entain Plc rose more than 20% after receiving a $ 11 billion sale by US casino operator MGM Resorts. In Italy, Fiat shares Chrysler rose about 2%, as investors will be asked to approve a merger with Peugeot to form the Stellantis, the fourth largest automaker in the world.
• OTHERS: Bitcoin fell sharply after reaching the record high of $ 34,800 the previous day, confirming the expected volatility in these highly leveraged markets. Bitcoin occurred reached $ 20,000 by first time on December 16, 2020. The world’s largest cryptocurrency has more than quadrupled in price in the year past.

News

In the United Kingdom, in November 202, the net indebtedness of households in the United Kingdom was GBP 5.7 billion, higher than market forecasts of GBP 4.35 billion. November’s indebtedness was the highest since March 2016, and significantly higher than the GBP 3.9 billion average seen in the six months to February 2020.

Today, IHS Markit / Manufacturing PMI data were released, a survey conducted with Purchasing Managers, which current pace and prospects in the industry of several economies.

In the United Kingdom, the IHS Markit / CIPS UK Manufacturing PMI was 57.5 in December 2020, pointing to the pace of sharpest expansion in the manufacturing sector since November 2017, supported by the increase in new orders, as that customers put forward orders to protect themselves against possible disruptions caused by the end of the transition period Brexit. However, delays at ports and other logistical disruptions meant that delays in the supply chain supply increased to one of the largest extensions in the history of research. In relation to prices, cost inflation of inputs was the highest in two and a half years. Looking ahead, business optimism declined in December.

In Germany, the IHS Markit / BME Germany Manufacturing PMI was 58.3 in December 2020, pointing to the stronger growth in manufacturing activity since February 2018, as it continued to recover from outages pandemic-induced. Production continued to increase, albeit at a slightly lower rate, while producers of goods reported strong optimism about the outlook for the coming year. The number of the workforce remained in decline, while increased pressure on manufacturing supply chains led to an increase accentuated in cost pressures. Looking at the prospects for 2021, the survey showed high expectations for the production next year. Many said they expected the impact of the pandemic on economic activity to diminish and that the customers’ appetite for investments continues to recover.

In France, the IHS Markit France Manufacturing PMI was 51.1 in December 2020 of 49.6 pointing to a new expansion of the manufacturing sector, sustained by a renewed increase in production. This occurred despite another drop in new orders, as the recent blockade of COVID-19 weighed on demand conditions. Meanwhile, the Employment rose for the first time since December 2019, although only marginally. Purchasing activity is also recovered solidly and at the fastest pace since August 2018. Input prices had the highest growth in almost two years, due to the higher prices of raw materials, especially metals such as steel and aluminum. Thus, the rate of charge inflation accelerated to the fastest since October 2019. Looking ahead, sentiment business was the highest since April 2019, amid expectations that a coronavirus vaccine could become widely available throughout 2021.

In Italy, the IHS Markit Italy Manufacturing PMI was 52.8 in December 2020, below market expectations of 53.7. The most recent reading signaled a moderate improvement in the health of the manufacturing sector, supported by a seventh increase consecutive monthly production and a slight recovery in the volume of new orders, since more flexible restrictions related to COVID-19 in the main markets led to an increase in external demand. Employment had the highest growth rate in more in two and a half years, while pending work continued to decrease. At the same time, the supplier’s performance worsened further, with delivery times for elongated inputs to a large extent since May. Input cost inflation was the highest since July 2018 and product charge inflation accelerated to a two-year high, although it remained modest. Looking to the future, business sentiment is stable.

In Spain, the IHS Markit Spain Manufacturing PMI was 51.0 in December 2020, below expectations of the 52.8. The reading indicated a modest improvement in operating conditions, with industrial production growing again after a slight drop in November. At the same time, the volume of new orders continued to fall, amid weak demand despite the higher growth in new export orders since July. Input delivery times kept decreasing. Input price inflation accelerated to its highest level since January 2018. Looking at for the future, business optimism has been its best since July 2018 amid hopes that the pandemic will have order soon.

Highlights

EURUSD started today’s session lower after rising 0.25% yesterday, but soared until the opening of the North American market, reaching 1.2256. DXY is operating in a slight drop, at the level of 90.1 thousand points, since the current large US budget and current account deficits have made the dollar an unattractive investment. In addition, US monetary policy will remain dovish for a long time, anchoring US nominal yields at a low level. The yen is hovering close to 103.4, stable, while the country surpasses the 200,000 mark infected by COVID-19. Gold is trading at $ 1,874 an ounce and silver at $ 25.9 an ounce.

In yesterday’s session, assets fell sharply amid concerns about the spread of a new variant of COVID-19 in the UK, with more than 40 countries imposing blockages on travelers and previous cargo from the country. However, today, the CEO of BioNTech said he is confident that the Pfizer / BioNTech vaccine will also work against the new variant and added that a new version can be developed in six weeks, if necessary.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: vaccination against COVID-19 in the European Union is expected to start before the end of the year, now that the European Medicines Agency has authorized the use of the Pfizer / BioNTech vaccine. The pandemic has killed more than 1.7 million and infected more than 77.4 million people worldwide, according to Johns Hopkins University. According to Bloomberg, more than 2.1 million people in six countries (China, Russia, USA, Canada, Israel and the United Kingdom) already received the vaccine. It is the beginning of the largest vaccination campaign in history and one of the biggest logistical challenges ever faced. Vaccination in the US began on December 14 with healthcare professionals and so far 614,117 doses were administered in the country. These numbers are expected to increase in the coming days with the distribution of a second vaccine option by Moderna Inc. There are already 6 vaccine options available for public use, another 3 are in the final testing phase.
• MACROECONOMY: economic data show that the UK economy shrank 8.6% in 3Q20 compared to 3Q19, pointing to the beginning of a recovery, since in the previous quarters the falls were much greater. O household consumption fell 10.1%, fixed investment fell 11.3%, public investment decreased 8.8%, and demand foreign trade contributed positively to GDP, as exports decreased less than imports. At compared to the previous quarter, business investment showed the first increase in four periods, driven by increased investments in buildings, information technology equipment and communication and transport.
• FISCAL POLICY: The US Congress finally approved a new $ 892 stimulus package on Monday billion for the economic recovery of the country devastated by the pandemic. This amount includes payment $ 600 a week for millions of unemployed people during the COVID-19 pandemic, which continues infecting more than 200,000 people every day and slowing the economic recovery. Almost 320,000 Americans have died. This package also renews a small business loan program Payroll) by about $ 284 billion and directs money to schools, airlines, transit and distribution of vaccines. The deal rules out the Republicans’ desire to protect companies from lawsuits related to coronavirus, as well as the Democrats’ request for a large disbursement of money to governments state and municipal penniless. This is the second largest stimulus package in US history, behind only the $ 2 trillion package approved in March 2020.
• BREXIT: the market was encouraged by the possibility of a commercial agreement being reached before Christmas, considering that the UK government has delivered a major counter-proposal on access to fishing in British waters by European vessels. However, the EU rejected this offer. The British Prime Minister spoke to the President of the European Commission, Ursula von der Leyen, twice by phone on Monday, to try to break the impasse in the negotiations. The UK made an offer that would reduce the value of fish caught by EU boats by 30% in British waters, a drop substantially less than the 60% required last week. The block refused to accept a reduction of more than 25%, saying that even that was difficult for countries like France and Denmark accept, according to authorities with knowledge of the discussions. Together with this percentage value, both sides are discussing how much time fishermen will have to adjust to the new rules. The United Kingdom demanded that the EU accept a five-year transition period, after having previously suggested three years. The bloc had initially required ten years and now offers seven. In addition, the EU wants to be able to impose tariffs on the United Kingdom if, in the future, the United Kingdom access to its waters. In its latest offer, the United Kingdom said it would accept tariffs on fishing, but not on other areas, such as energy, as required by the block. Although the issue is financially insignificant – the two sides trade $ 40 million worth of fish a year – the British see control of their waters, previously under EU jurisdiction, as a key element of its sovereignty, which is being recovered with Brexit.
• ACTIONS: Apple has announced that it must produce a passenger vehicle using its own battery technology innovative until 2024. Meanwhile, IBM announced the acquisition of Nordcloud, based in Helsinki, a European leader in implementation of cloud and managed services, for an undisclosed amount. The Wall Street Journal reported that the Facebook and Google agreed to “cooperate and help each other” if they ever faced a research into the pact of working together in online advertising.

The D1 Stoch index is just below the 70-point line, on a downward trend. The lines were briefly overbought position considering this timeframe

Highlights

EURUSD started today’s session in a sharp decline, reaching 1.2135, correcting the 1.02% appreciation obtained in the week last. News that the trade agreement that will regularize relations between Europe and the United Kingdom as of January 1 2021 will not come out this year caused this correction, as the market positioned itself on EURUSD throughout the week with based on the expectation of the agreement (among other factors, such as the negotiation of the fiscal stimulus package in the USA and the of a new coronavirus strain, but Brexit is one of the most important). DXY is operating at a high level, at 90.8 thousand points. The yen is hovering close to 103.8, up. Gold is trading at $ 1,873 an ounce and silver at $ 25.9 the ounce.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: British Health Secretary Matt Hancock said a new strain of coronavirus is out of control in the country, which made France, Germany, Italy, Holland, Belgium, Austria, Ireland, Switzerland, Bulgaria and Canada, among others announced blockades for people from the UK. London and south east England were placed under a total emergency block on Sunday to contain this new strain of rapid spread. Prime Minister Boris Johnson requested an emergency meeting for this Monday to discuss travel international and cargo flow inside and outside the UK. Britain announced a record 35,900 infections Covid-19 on Sunday, bringing the country’s total to over 2 million. The European Medicines Agency will examine the Pfizer / BioNTech coronavirus vaccine on Monday, paving the way for vaccination campaigns start in the European Union in less than a week.
• MACROECONOMY: in the UK, retailers rated December sales as good. Between the subsectors, grocery stores, furniture and retailers of ‘other normal goods’ (cards, flowers and jewelry, etc.) saw strong growth, clothing, footwear and department stores continued to report volumes below those observed in the previous year. At the At the end of the afternoon, the European consumer confidence index will be released.
• MONETARY POLICY: the US tax agreement took too long to come out because at the heart of the discussions was the Democrats’ request to establish a direct flow of payments to state and municipal governments with cash problems. Republicans struggled to limit not only fiscal stimulus but also the Fed’s power to provide credit to municipalities, companies or other institutions, widely used in 2020, through a series of emergency loan programs aimed at stabilizing the economy during the pandemic in times of crisis. Senator Patrick J. Toomey, a Republican from Pennsylvania, made an effort to ensure that these programs were closed and prevent both the EDF and the Treasury Department from creating any similar in the future.
• FISCAL POLICY: The United States Congress has finally approved a fiscal stimulus package aimed at recovery of the post-pandemic economy. Democrats and Republicans will allocate $ 900 billion, including payments direct to Americans, unemployment benefits, company funds and vaccine distribution. Although necessary, that many citizens are facing enormous difficulties to survive this pandemic, this expenditure without precedent is leading to large budget and current account deficits. Senator Mitch McConnell, Republican from Kentucky and leader of the majority, said on Sunday night: “More help is on the way.” Both chambers approved the measured on Sunday night, and President Trump signed it just before midnight. Although Trump’s signature is in the law, its effect will be much more significant for President-elect Joe Biden, who silently pressed legislators to reach this agreement, and that it should seek another major economic relief package after taking office in January: “This action is just the beginning. Our work is far from over. ” The agreement is expected to provide weekly payments of $ 600 to millions of adult Americans earning up to $ 75,000 a year, more than US $ 284 bilhões para empresas, retomando o Programa de Proteção à Folha de Pagamento, um popular programa de empréstimo federal para pequenas empresas que expirou durante o verão, expandindo a elegibilidade do programa para organizações sem fins lucrativos, jornais locais e emissoras de rádio e TV, US $ 15 bilhões para teatros, cinemas independentes e outras instituições culturais devastadas pelas restrições impostas para impedir a disseminação do coronavírus. O acordo também deve fornecer bilhões de dólares para testes, rastreamento e distribuição de vacinas, bem como US $ 82 bilhões para faculdades e escolas, US $ 13 bilhões em assistência nutricional, US $ 7 bilhões para acesso a banda larga e US $ 25 bilhões em assistência para aluguel.
• BREXIT: authorities should not ratify any agreement before January 1, when the transition period of the Brexit will have expired, which can cause practical problems as of this date. The next deadline is now Christmas, although it is possible to be extended again.
• SHARES: Tesla enters the S&P 500 today, after the company’s shares rose nearly 500% last year.

The D1 Stoch index is just below the 70-point line, on a downward trend. The lines were briefly overbought position, but have crossed, indicating a real possibility that the EURUSD value will fall in today’s session, which opened at 1.2212.

Highlights

Today’s main highlights are:

• Signs of progress in US fiscal stimulus negotiations ($ 900 billion, which includes payments to individuals and excludes aid to state and municipal governments. Senate majority leader Mitch McConnell warned senators Republicans that they should be prepared to work over the weekend)
• Signs of progress in post-Brexit trade agreement negotiations in Europe
• FED did not change the terms of its asset purchase program and outlined an optimistic growth outlook for 2021. With this less dovish stance, it will not bring back investor interest in the dollar
• European Parliament approved the € 1.8 trillion budget and the coronavirus recovery package
• Expectation about US unemployment insurance claim data, which will be released today

EURUSD started today’s session sharply higher, reaching 1.2244, its strongest level since April 2018. DXY is trading down, at 89.8 thousand points, as the unprecedented volume of spending by the US government is leading large budget deficits and current account, making the dollar an increasingly less attractive investment. The yen is oscillating close to 103.0, even with the country at its most serious level since the beginning of the pandemic. Gold is being traded at $ 1,876 an ounce and silver at $ 25.7 an ounce, both up. The price of these two metals is already strengthening, as they offer security to the market, as protection against inflation, in face of the increase in the volume of economic stimuli in the USA and in Europe.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: the pandemic continues to plague Europe, with an average of seven days of new cases in Germany now almost a record 179 per 100,000 inhabitants. The government already predicts that the first two months of 2021 will be particularly difficult, with a new peak of infections expected in January, and has already warned of an extension of the lockdown beyond January 10th. Spain reported its biggest jump in new daily coronavirus infections in the Wednesday, with 11,078 new cases, compared to 10,328 on Tuesday. Spain will now allow regions to strengthen their anti-virus measures as part of your Christmas plan, meaning that meetings can be limited to six curfews can be prolonged and travel between regions prohibited. Prime Minister Pedro Sanchez suspended all activities and will be quarantined until December 24, after coming into contact with French President Emmanuel Macron, who had a positive result for COVID-19. The USA recorded a record 3,835 deaths from the virus yesterday, however, case growth is slowing, mainly in the Midwest. US President-elect Joe Biden and Vice President Mike Pence will receive the first dose of the vaccine in the next few days. A panel of external consultants from the US Food and Drug Administration will meet today to endorse the emergency use of Moderna’s vaccine against coronavirus.
• MACROECONOMY: Eurozone consumer prices fell for the third consecutive month, amid demand repressed due to the coronavirus crisis. Prices fell for both energy (-8.3%) and non-industrial goods energy (-0.3%). Food, alcohol and tobacco increased at a slightly milder rate (1.9%) and inflation of services increased (0.6%). The core of annual inflation, which excludes volatile prices for energy, food, alcohol and tobacco and for which the ECB analyzes its policy decisions, it was unchanged at 0.2%, the lowest ever recorded. In the US, initial unemployment insurance claims are expected to drop to 800,000 in the week ended December 12, compared to 853 thousand reported in the previous week. Orders are far from the 200,000 level reported in February and will likely remain elevated for some time. Meanwhile, continued benefits are expected to drop to 5,598 million in the week of December 5, after rising for the first time in eleven weeks
• MONETARY POLICY: The US Federal Reserve has pledged to continue executing its program to purchase until “substantial progress is made” towards their goals of full employment and job stability. prices. The Bank of England voted unanimously to keep the interest rate at a record low of 0.1% and the size of its bond purchase program at £ 875 billion during its December meeting. The bank noted that successful testing of some coronavirus vaccines and initial plans to implement them widely in the first half of next year they are likely to reduce the downside risks to economic prospects. Looking to the future, the authorities promised to take all additional measures necessary to achieve the target inflation of 2%, in a way that helps sustain growth and employment. Inflation is expected to increase by rather sharply towards the target in the spring, as the VAT cut comes to an end and the big drop in energy prices earlier this year comes out of the annual comparison.
• BREXIT: The news that Prime Minister Boris Johnson has put parliamentarians on standby to approve a deal last minute with the EU animated the market. The pound sterling remained at $ 1.36 on Thursday, its lowest level strong since April 2018. EU Brexit chief negotiator Michel Barnier tweeted that “good progress” is being done in the negotiations, although the “last hurdles” still remain.
• ACTIONS: In the U.S., Google was allegedly sued by the state of Texas and nine other states on Wednesday under allegations that the company makes an illegal deal that gave Facebook special privileges in exchange for a promise not to support a competing ad system.
• OTHERS: Bitcoin hit a new high of $ 23,774 on Thursday, more than 10% over the previous session, supported the growing interest of large investors as a potential form of protection against rising inflation.

The D1 Stoch index is above the 70-point line, on an upward trend. It is possible that you are heading towards overbought zone, which would make the asset appreciate another day.

News

The Federal Reserve left the target for its federal funds rate unchanged at 0-0.25% during its December meeting in line with market forecasts. The Fed will continue to increase its holdings in Treasury bills by at least US $ 80 billion per month and agency mortgage-backed securities at least $ 40 billion per month until a substantial progress is made in relation to employment and inflation.

The Federal Reserve is committed to using all available tools to support the American economy in these “challenging” times, to promote as many jobs as possible and achieve the price stability goals, since the economic activity and the labor market continued to recover, but are still well below the levels of the beginning of the year. The committee said it was prepared to adjust monetary policy in the event of risks that could prevent achievement of goals.

Financial conditions remain dovish (accommodative), partly reflecting monetary policy measures and the liquidity of credit to households and businesses, and mentions that weaker demand and falling oil prices have held up inflation to consumers.

The Fed also announced that it will continue to increase the Treasury bond purchase program by $ 80 billion a month and $ 40 billion in mortgages until the employment and price stability targets are met. “These purchases of assets help the market to function and in accommodative financial conditions, which helps to maintain the flow of credit to families and businesses ”, they write. The current pace of bond buying will continue “until substantial progress is made in towards the Committee’s maximum employment and price stability goals, “said the Fed.” These asset purchases help to promote the functioning of the market and accommodative financial conditions, thus supporting the flow of credit to families and companies. “

With rates close to zero, the central bank has relied on its bond purchases to contain the economic downturn, buying $ 120 billion in bonds monthly. The bond purchase program raised the EDF balance sheet to more than $ 7 trillion – from about $ 4 trillion just before the pandemic.

The median drop in US GDP for Fed members in 2020 fell to 2.4%, against a projection of a 3.7% contraction in September. For 2021 and 2022, growth with expansion of 4.2% and 3.2%, respectively, slightly above median September, 4% and 3%. The projection for the job market has improved significantly. The median of the projection the unemployment rate in 2020 was 6.7%, decreasing in 2021 and 2022 to 5% and 4.2%, respectively. In September, the projection was, respectively, 7.6%, 5.5% and 4.6%. Inflation in 2020 is expected to increase by 1.2%, accelerating to 1.8% and 1.9%, still below target above 2% for a period of time since the maximum possible employment is achieved, as well respecting the dual mandate of ensuring inflationary control and stimulating the labor market. Even so, the projection for 2021 and 2022 it is better compared to September, when the median was, respectively, 1.7% and 1.8%. The core of inflation suffered a reduction in the 2020 projection, with the expectation of ending the year at 1.4%, compared to 1.5% in the median of September. For 2021 and 2022, the expectation is higher than in September, rising from 1.7% to 1.8% and 1.8% respectively to 1.9%. There is no projection of an increase in the rate of Feds Funds for the next three years, respecting the statement of the decision in that the institution will maintain the dovish monetary policy as long as necessary.

Highlights

Today’s main highlights are:

• Signs of progress in US fiscal stimulus negotiations
• Signs of progress in post-Brexit trade agreement negotiations in Europe
• Launch of more vaccines against COVID-19
• Better-than-expected PMI for Europe’s largest economies
• Expectation for the results of the EDF meeting

EURUSD started today’s session upwards, with a very strong candlestick just at the opening of the European market that took the asset of the level from 1.2161 to 1.2200, reaching its strongest level since April 2018 at the beginning of the session. The falling DXY is oscillating at the level of 90.2 thousand points. The yen is falling, near 103.4. Gold is trading at $ 1,860 a ounce and silver at $ 25 an ounce, both up slightly. The price of these two metals is expected to strengthen in the coming weeks, because they continue to offer security to the market, as protection against inflation since an increase in the volume of economic stimulus in the near future.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: Germany reported 952 deaths and 27,728 new COVID-19 infections on Wednesday, the biggest increase daily since the start of the pandemic. The country is now entering a phase of greater restrictions, which should last at least until January 10, with non-essential stores and schools closed. In the US, the FDA said that Moderna’s vaccine against COVID-19 is “highly effective”, setting the stage for an emergency use authorization to be released on the end of this week.
• MACROECONOMY: in the USA, data from the Mortgage Bankers Association showed that mortgage applications increased 1.1% in the week ended December 11, recovering from two consecutive weeks of decline. House purchase orders increased 1.8% in the week, however, they represent an increase of 26% when compared to the same period last year. Real estate loan refinancing requests, which advanced 1.4% in the week, presenting an increase of 105% in relation to the same period in the previous year. The rate average interest rate for 30-year mortgages fell 5 basis points, to 2.85% last week, a record low. At US retail sales fell 1.1% month-on-month in November 2020. It’s the second consecutive drop in retail sales amid declining income and lower income for the population. Clothing store sales were those that fell the most (-6.8%), followed by food and beverage services (-4%); electronics and home appliance stores (-3.5%); gas stations (-2.4%) and concessionaires of motor vehicles and parts (-1.7%). Other falls also were observed in sales at furniture stores (-1.1%); general merchandise stores (-1%); health and personal care (-0.7%); sporting goods, hobby, musical instrument and book (-0.6%); and several (-0.5%). In contrast, the high occurred in food and beverage stores (1.6%) and in construction material resellers (1.1%). Retail sales which exclude automobiles, gasoline, building materials and food services decreased 0.5%. In the Euro Zone hourly labor costs increased 1.6% in 3Q20 compared to the same period in the previous period. Wages and salaries increased by 2.2% and the non-salary component decreased by 0.4%. Still in the Eurozone, the trade surplus eurozone increased to EUR 30 billion in October 2020, with exports falling 9% – especially in mineral fuels, lubricants and related materials (-38.3%); transport machinery and equipment (-9.8%) and manufactured goods classified mainly by materials (-7.7%). Imports fell 11.7% to EUR 169.3
• billion – mainly due to mineral fuels, lubricants and related materials (-37.9%); drinks and smoke (-13.7%) and transportation machinery and equipment (-12.3%). China was the EU’s main partner in the period. O trade with the USA recorded a significant drop in both imports (-13.0%) and exports (-10.2%). Another piece of information, still in the Eurozone, shows that the civil construction segment contracted 1.4% in October 2020 compared to the previous year, with construction activity falling 1.5% and civil engineering falling 0.3%. Today were disclosed the PMI information for the Eurozone, they are in the “News” section of this report.
• FISCAL POLICY: both Democrats and Republicans are confident that Congress would agree to a about $ 900 billion package before the holidays. House Speaker Nancy Pelosi, the leader of the majority in the Senate, Mitch McConnell, the Senate minority leader, Chuck Schumer, and the House minority leader, Kevin McCarthy, discussed the bill on Tuesday and seemed optimistic about it.
• MON MONETARY POLICY: The EDF is expected to keep its rate stable at 0-0.25% at its last meeting in 2020, and adopt a more dovish tone. Investors will keep an eye out for any changes to the bond purchase program, be it in pace or composition, like buying more long-term bonds and fewer short-term bonds. The EDF has been buying $ 80 billion in Treasury bonds and $ 40 billion in mortgage bonds every month. Investors they will also monitor the existence of links between asset purchases and employment and inflation measures. In addition, the FED to disclose a new outlook for the US economy, with better long-term forecasts due to the launch of the coronavirus vaccine.
• BREXIT: Negotiations between the EU and the UK continue, although it is still uncertain whether there will be a trade agreement. EU negotiator Michel Barnier has identified a “narrow path” for Brexit’s trade deal.
• ACTIONS: European stocks hit their highest since February this Wednesday
• OTHERS: Bitcoin surpassed the $ 20,000 level for the first time today, after Reuters reported that the manager British fund manager Ruffer Investment Management added bitcoin to its portfolio. Cryptocurrency increased more 200% this year as it is seen as a hedge against inflation amid increasing fiscal and monetary stimulus all around the world.

The D1 Stoch index is just below the 70-point line, on an upward trend. It is possible that you are heading towards overbought zone, which would make the asset appreciate another day.

News

The economic recovery of the private sector in the eurozone bloc came close to stabilizing in December 2020, a since a second wave of coronavirus cases and restrictions on the circulation of people imposed to contain it affected the economic activity as industrial production growth accelerated and service sector activity contracted, as shown in the Purchasing Managers Index (PMI) survey, released today.

IHS Markit Eurozone Composite PMI rose to 49.8 in December 2020 from 45.3 in the previous month, and easily surpassed market expectations of 45.8. IHS Markit Eurozone Services PMI increased to 47.3 in December 2020 from 41.7 in the previous month, also exceeding market expectations of 41.9. Service production contracted for the fourth month consecutive, albeit at a smoother pace, with fewer companies reporting that production was hit by coronavirus block compared to November. Exports dropped again sharply due to strict travel and tourism restrictions; and employment in the sector continued to decline. Looking to the future, the feeling among service providers on future prospects reached a 27-month high in December. The IHS Markit Eurozone Manufacturing PMI jumped from 53.8 in November to 55.5 in December 2020, exceeding market forecasts of 53. The reading pointed to the strongest growth in manufacturing activity in the last 31 months, as growth in production and new order volume accelerated and goods exports increased by the second fastest rate in 34 months, while employment continued to fall. Input costs increased at the fastest rate in just over two years, linked in many cases to the increasingly widespread shortage of many important raw materials. Meanwhile, the sentiment about future prospects reached the highest level in the last 34 months.

In Germany, the IHS Markit Germany Composite PMI increased to 52.5 in December 2020 from 51.7 in November, exceeding market forecasts of 50.4. Manufacturing continues to make up for the weakness in the service sector. THE However, the survey pointed to a small setback in employment, although companies remain optimistic about prospects for the coming year. There are signs of increasing pressure on the supply chain, leading to a sharp increase in manufacturing input costs. The IHS Markit Germany Services PMI increased to 47.7 in December 2020 from 46 in November, exceeding market forecasts of 44. Still, the reading pointed to the third consecutive month of contraction in service activity as blocking measures continue to weigh. Employment grew at a rapid pace slower and price pressures intensified. Finally, businessmen’s confidence in the prospects for activity for the following year remained strongly optimistic in December. The IHS Markit Germany Manufacturing PMI increased to 58.6 in December 2020 from 57.8 in November. It is the highest reading in 34 months, since manufacturing showed little impact of virus containment measures at home or abroad. The order book volumes increased sharply, supported by increased exports, amid increased demand from China. Employment fell and producer prices have increased to the greatest extent since March 2019, due to the scarcity of raw materials. Finally, manufacturers remained optimistic and businessmen’s confidence in the outlook for activity in the following year remained strongly optimistic.

IHS Markit France Composite PMI rose to 49.6 in December 2020 from 40.6 in November and above expectations 42.9 market. The most recent reading points to the milder contraction in business activity in the current sequence of falls of four months, although the country continues to face strict blocking restrictions due to coronavirus disease. The new ones Orders received increased for the first time in four months, with French companies slightly increasing their number of employees in December. Looking ahead, confidence has reached its highest level in almost a year, supported by for an early recovery in demand when COVID-19 vaccines become widely available. The Markit IHS France Manufacturing PMI rose to 51.1 in December 2020 from 49.6 in the previous month and above market expectations of 50.1. The most recent reading pointed to a further expansion in the manufacturing sector, although the growth rate has historically moderate. New orders fell at a smoother pace, with foreign sales recovering lightly; employment has increased and work delays have increased marginally. In terms of costs, prices of inputs were the ones that rose the most in almost two years. IHS Markit France Services PMI rose to 49.2 in December 2020 of 38.8 in the previous month and above market expectations of 40. The most recent reading pointed to the most service activity in the current four-month downturn. New orders have recovered, mainly due to the domestic market, while international orders decreased sharply. In addition, the employment increased and work delays fell less in the current five-month and only marginal sequence. In terms of costs, input prices increased and product prices decreased.

The IHS Markit / CIPS UK Composite PMI rose to 50.7 in December 2020 from 49.0 in the previous month, but market forecasts of 51.3. The most recent reading signaled only a slight increase in private sector production driven by a solid expansion in industrial production. Meanwhile, service sector activity has stagnated due to the continued restrictions induced by coronavirus in several non-core businesses. Total new business volumes remained unchanged, while the job reduction rate was the slowest in 10 months. In relation to prices, input costs increased at a faster and more robust pace. Meanwhile, business optimism about prospects for the following year have decreased only slightly since November and meanwhile have remained much stronger than than the visa from March to October 2020. The IHS Markit / CIPS UK Manufacturing PMI increased to 57.3 in December 2020 55.6 in November, well above the forecasts of 55.9. The reading pointed to the strongest expansion of manufacturing activity since November 2017. New orders expanded at the fastest pace since August, supported by a temporary boost for purchases before the Brexit deadline, while purchasing stocks have accumulated to a greater extent since April 2019. A slower rate of layoffs and a faster increase in supplier leadership times also contributed for an increase in PMI in December. The IHS Markit / CIPS UK Services PMI rose to 49.9 in December 2020 from 47.6 in the previous month, below the market consensus of 50.5. Even so, the most recent reading pointed to a stagnation in the service sector activity due to the continued restrictions of the coronavirus to the hospitality, leisure and travel businesses. At New order entries fell for the third month, while staffing levels were cut at the slowest pace since the beginning of the retraction in March. Several survey respondents commented that the hope of a resumption of activity over the next 12 months, along with the use of leave schemes, encouraged them to retain employees whenever as possible.

Highlights

The week starts with a high value in the EURUSD pair, in the range of 1.21, due to the depreciation of the dollar and not due to the appreciation of the euro. This is because the American government is expected to make a new round of economic incentives this December, already that the country continues to suffer from the expansion of the coronavirus pandemic, as pointed out by a payroll released at the end of the last week. News about a vaccine against the disease no longer moves the market, which has already priced them.

On the euro side, the market is closely monitoring news about Brexit and the outcome of the EU meeting that happens on Thursday and will define a new stimulus package aiming at the economic recovery of the post-pandemic bloc.

With the liquidity of the American currency rising, there is an intensification of financial flows, increasing the risk appetite of the market, favoring markets such as ForEx.

EURUSD started today’s session down to 1.2081 but rebounded to close to 1.2139 after the market opened North American. DXY opened the session on a high, reaching 91.2 thousand points, but returned to the level of 90.8 thousand points after the opening of the market in the USA. The yen is stable near 104.1, after the Japanese prime minister said on Friday that will decide on an economic stimulus package earlier this week. Gold is trading at $ 1,830 an ounce and silver at $ 24 an ounce. The price of these two metals should increase in the coming weeks, as they continue to offer security to the market, as protection against inflation since an increase in the volume of economic stimulus is expected in a near future.

The main factors considered by investors for their decision making at the moment are:

COVID-19: the measures taken to contain the spread of COVID-19 in Europe are beginning to take effect: in France, infections are now around 10,000 / day, compared to 50,000 / day in early November. Belgium has the fifth smallest Europe’s infection rate, after being the country hardest hit in the previous month. Italy has announced a loosening of restrictions last Friday. Even so, in Germany, Bavaria announced a more rigid block from this Wednesday through January 5. On the other hand, in the USA, the number of diagnoses continues to rise daily, reaching 14.7 million people, with more than 282 thousand deaths. In California, bars and beauty salons will return to close. In Asia, the South Korean authorities have tightened the rules of social distance for the capital Seoul and surroundings until at least the end of December. The UK starts its vaccination program this week

• COVID-19: the measures taken to contain the spread of COVID-19 in Europe are beginning to take effect: in France, infections are now around 10,000 / day, compared to 50,000 / day in early November. Belgium has the fifth smallest Europe’s infection rate, after being the country hardest hit in the previous month. Italy has announced a loosening of restrictions last Friday. Even so, in Germany, Bavaria announced a more rigid block from this Wednesday through January 5. On the other hand, in the USA, the number of diagnoses continues to rise daily, reaching 14.7 million people, with more than 282 thousand deaths. In California, bars and beauty salons will return to close. In Asia, the South Korean authorities have tightened the rules of social distance for the capital Seoul and surroundings until at least the end of December. The UK starts its vaccination program this week.
• MACROECONOMY: German industrial production grew 3.2% in October 2020 compared to the previous month, exceeding market expectations of 1.6%, but still 4.9% below the February level. Production grew so much for intermediate goods (4.0%) and for capital goods (5.2%), but decreased for consumer goods (-2.4%). THE energy production increased 4.0% and civil construction 1.6%. In Japan, the index of economic indicators coincident, which consists of a series of data including factory production, employment and retail sales, increased to 89.7 in October 2020, the highest since February, suggesting that economic activity in the third largest economy the world stopped contracting after the shock of the COVID-19. In China, the trade surplus increased to $ 75.42 billion in November 2020, from US $ 37.18 billion in the same month of the previous year, and well above the expectations of the US $ 53.5 billion market. This was the largest trade surplus since at least 1981. Exports jumped 21.1% over the previous year in November 2020, the strongest growth since February 2018 and above market consensus of an increase of 12%. This is despite the strong appreciation of the yuan in recent months, supported by strong demand abroad for personal protective equipment (PPE) and electronic products for work from home, as well as seasonal Christmas demand. Among trading partners, exports increased mainly for the USA (46.1%), Australia (22.6%), Taiwan (18.1%), EU (8.6%), ASEAN (8.8%) and Japan (5.6%).
• MONETARY POLICY: at its next meeting, which takes place between 16 and 18 December, the EDF should give more details about how long it will continue to buy bonds to support the U.S. economy, which could weaken the dollar even more if the Institution decides to increase the money supply. The ECB, which meets on Thursday, December 10, to expand its € 1.35 trillion emergency asset purchase program by another € 500 billion. The ECB’s challenge will be to work this euro stronger, at its highest level since April 2018, which gets in the way the bloc’s trade balance and, consequently, economic activity.
• BREXIT: The pound reached its highest level since May 2018 last week, with investors waiting signs of how the bloc’s commercial relationship with the European Union will begin in January. Negotiators have given signs that an agreement is increasingly distant. British Prime Minister Boris Johnson and the President of the European Commission, Ursula von der Leyen, must review the situation tonight.
• USA PRESIDENCY TRANSITION: US President-elect Joe Biden said on Friday that the current administration would not has a vaccination plan against the coronavirus. Meanwhile, the chief advisor of Operation Warp Speed ​​Initiative government official said he planned to meet with Biden this week to discuss the program before the first vaccination round scheduled for this month.
• STOCKS: European stock markets are down on Monday, as are the Americans. Reuters reported that the US was preparing to impose sanctions on a dozen more Chinese officials. The change came after an increase in visa restrictions for members of the Chinese Communist Party and their families, announced at the end of last week.

The D1 Stoch index is over the 70-point line, indicating that the market is overbought, pointing to a trend that the EURUSD price will fall in today’s session.

News

A Reuters survey of foreign exchange strategists pointed to the possibility that the weakening dollar would last for the at least another six months, as investors continue to migrate to riskier assets, which offer higher returns. The availability of vaccines made investors price an end to the pandemic and its consequences locks. The possibility of greater fiscal and monetary stimulus provides the necessary support for these strategists start working with significant economic growth worldwide, making this investment in assets viable riskier. As such, EURUSD is well supported within what appears to be a new trading range, between 1.2000-1.2500.

Highlights

The growth in numbers of coronavirus infections and new restrictions on social distancing in the United States and Europe are raising concerns about the global economic recovery and highlighting the need for additional fiscal stimulus. The disappointing US retail sales in October also raised concerns and today investors are more pessimistic.

EURUSD started session today on a likely downward path. It opened at 1.1864, has already reached 1,189, but is oscillating close to 1,187. The DXY is oscillating around 92,200 points, the yen close to 103.9, the gold right below $ 1,900 an ounce and silver at $ 26 an ounce. These two metals are offering security to the market, as protection against inflation, since an increase in the volume of economic stimulus is expected in the coming months.

Bitcoin has risen to over $ 18,000 today, a level not seen since December 2017. Bitcoin’s value has more than doubled since the beginning of the year, driven by validation by public companies and interest from major investors. The recovery is expected to continue towards the $ 20,000 level, as many see digital currency as a possible protection against inflation.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: The global daily number of coronavirus fatalities reached 10,816 yesterday, the highest since the pandemic began. The UK recorded the biggest increase in COVID-19 daily fatalities since May 6 yesterday. France, which became the first country in Europe to exceed 2 million cases, on Monday reported its lowest number of cases for the last month. In Germany, the federal government and regional leaders will meet again in a week to discuss the need for further restrictions. Poland reported a record 603 fatalities on the day and Bulgaria 4,828 new cases, also a record. In the United States, 161,934 new cases were registered yesterday, the third highest daily rate since the beginning of the pandemic, with 1,707 fatalities, the highest number since May 14. However, Pfizer said today that its vaccine for Covid-19 is 95% effective, adding that it has the required safety data, and that it would request authorization for emergency use in the United States within a few days.
• MACROECONOMICS: Mortgage orders in the United States fell 0.3% in the week ending November 13. Requests for refinancing home loans fell 1.8%, while home mortgage applications increased 3.5%. The average interest rate on 30- year fixed mortgages rose 1bps to 2.99%, one of the lowest levels in history. In the United Kingdom, the inflation rate was slightly higher than expected in October. New passenger car registrations in Europe fell back into negative territory in October.
• MONETARY POLICY: ECB President Christine Lagarde said yesterday that an effective coronavirus vaccine will not fundamentally change the institution’s economic projections, since a medical solution has already been considered in the forecasts. FED President Jerome Powell noted that the United States economy still has a “long way to go” before fully recovering from the new coronavirus pandemic, warning that there are significant risks, even with the development of new vaccines and therapies.
• BREXIT: a person familiar with the discussion said the authorities are planning the possibility of an announced as early as Monday, while British Prime Minister Johnson said: “It is far from certain that an agreement will be possible, and the time now it’s too short.”
• STOCKS: in the US, Lowe’s and Target’s profits exceeded forecasts. British RSA Insurance gained 4% after saying it received a £ 7.2 billion cash offer from Canadian firm Intact Financial and Danish insurer Tryg. Deutsche Boerse rose 3% after the German stock exchange operator said it would acquire an 80% stake in corporate governance consultancy Institutional Shareholder Services; In the UK, positive highlights for Ubisoft and Micro Focus International, which jumped nearly 30% Página 2 after disclosing guidelines that their annual earnings should be higher than their expectations, while disappointing quarterly results were reported by Schaeffler and Maersk. In Italy, Banca Generali confirmed its financial targets for 2021. Finecobank, CNH Industrial, Azimut Holding, Intesa Sanpaolo and Poste Italiane appreciated more than 1%. In Spain, Banco Sabadell is among the biggest losses, after gaining almost 30% in the previous two days.

News

Japan registered a trade surplus of JPY 872.9 billion in October, the fourth consecutive month of surplus and the largest since February, with exports falling 0.2% over the previous year, while imports fell 13.3%.

New passenger car registrations in the European Union fell 7.8% compared to the previous year in October 2020. Declines were observed in all markets, except Ireland and Romania. Demand fell in Spain (-21%), France (-9.5%) and Germany (-3.6%). In Italy, on the other hand, demand remained almost unchanged (-0.2%). From January to October, new car registrations fell 26.8%.

Mortgage applications in the United States fell 0.3% in the week ending Nov. 13, data from the Mortgage Bankers Association showed. Requests for refinancing home loans fell 1.8%, while home mortgage applications increased 3.5%. The average interest rate on 30-year fixed mortgages rose by 1bps to 2.99%, one of the lowest levels in history and one of the main factors responsible for the increase in demand: “The demand for housing remains sustained by the continuous recovery in the labor market and a growing appetite for families looking for more space because of the pandemic, ”said Joel Kan, associate vice president of economic forecasts and the MBA sector

Highlights

The week started with investors increasing their risk appetite for new news about vaccines against coronavirus, although the pandemic remains uncontrolled in Europe and the USA. Hungary and Poland filed lawsuits preventing the use of the ECB’s € 750 billion monetary stimulus package, raising concerns about the recovery bloc’s economic growth. In the USA, investors are concerned about rising levels of debt and its consequences on economic recovery in the country.

In today’s American session we’ll see the publication of one of this week’s most influential data sets: sales data US retail sales in October can be highly influential to the US dollar’s outlook if investors.

Tomorrow we will see the publication of US industrial production and manufacturing figures. And more speeches from members of the broad ECB summit, including a speech by President Christine Lagarde.

EURUSD started today’s session looking for appreciation. It opened at 1.1859 and has already reached 1.1886. DXY is oscillating close to 92.4 thousand points, the yen close to 104.54, gold just below $ 1,900 an ounce and silver at $ 26 an ounce. These two metals are offering security to the market, as protection against inflation as an increase in the volume of stimuli is expected in the coming months.

The main factors considered by investors for their decision making at the moment are:

• COVID-19: In the USA, New Jersey, California, Iowa and Ohio announced new restrictive measures to contain the pandemic, since 1 million cases were confirmed in less than a week in the country. German Chancellor Angela Merkel said this Tuesday that the coronavirus situation in Germany is still very serious, although the number of infections has not is going up so fast. The increase in the number of cases was smaller than last week, but the deaths soared in that same comparison. In the United Kingdom, the Deputy Director of Public Health in England advised the government to strengthen blocking measures when the current one ends on December 2. In France, the government wants allow stores to reopen on December 1, but bars and restaurants can be closed. In Italy, Lombardia and Piedmont, the first regions of the country to enter a blockade, saw a drop in the infection rate in the last few four days.
• MACROECONOMY: US retail sales rose 0.3% from the previous month in October 2020, below forecasts of a 0.5% increase. Sales at motor vehicle dealerships and gas stations increased at a slower pace, while sales fell at food and beverage stores, clothing, furniture and sporting goods, hobby and bookstores. Compared to the previous year, retail sales increased by 5.7%. Prices of US imports showed the first monthly drop in the index since the beginning of the pandemic. Prices of fuels decreased by 1.9% while non-fuels increased by 0.1% led by supplies and materials industrial products and food, feed and beverages that more than compensated for the fall in prices of consumer goods and automotive vehicles. In the annual comparison, import prices decreased 1.0% in October.
• MONETARY POLICY: Investors are assessing the chances of the FED increasing its government debt purchases in the coming weeks to counteract the economic consequences of a resurgence of COVID-19, a intervention that could reverse a recent increase in Treasury yields, although asset purchases have already are at record levels and the EDF has not indicated that it intends to increase them at its next policy meeting Page 2 December 15-16. EDF President Jerome Powell is due to speak this afternoon, and investors they will listen carefully to any insight. The Fed can also be forced to adjust its Treasury purchases if the news positive about the vaccine raise 10-year yields above 1%, which increases the cost of borrowing for companies and individuals, which can threaten economic growth.
• BREXIT: The UK’s chief negotiator, David Frost, told Prime Minister Boris Johnson to expect a trade agreement with the EU “early next week”, possibly next Tuesday. That came after the news last week that Dominic Cummings, one of the political architects of the Brexit project, was about to leave the government, prompting some observers to predict a greater chance of an agreement soon.
• USA ELECTIONS: President-elect of the United States, Joe Biden, will dedicate himself to shaping his team this Tuesday. O deputy Cedric Richmond, who was national co-chairman of the Biden team and chaired the Congress’s Black Caucus, he must hold a high-ranking post in the government, as does Steve Ricchetti, Biden’s longtime adviser. THE Richmond’s promotion would leave his Louisiana parliamentary seat vacant. Jen O’Malley Dillon, who took over manages the Biden campaign earlier this year and is the first woman to lead a presidential campaign winning democrat, should be appointed deputy chief of staff

News

The Japanese currency, the yen, achieved the highest yield among the top three currencies this year. In the past few weeks the yen reached high with news of a Biden presidency and a possible COVID-19 vaccine, which is at odds with its tendency to weaken when investors look for risk and growth prospects. Analysts cite two major reasons: as a net creditor nation in a world of fiscal extravagance, the yen retained some of its safe haven, and as interest rates in Europe and the United States plummet, Japanese government bonds offer comparatively higher returns on an inflation-adjusted basis. At levels around 104 per dollar, the yen rose 4% this year. Analysts estimate that it may steadily reach the level 100 last seen in 2016. Japanese investments in foreign bonds have already slowed down, with the country’s largest pension fund, GPIF, having a limited room for maneuver to increase foreign bonds, since their allocation is close to their goals. JPMorgan analysts say their model suggests that Japanese portfolio allocations to overseas assets will decrease even more towards the end of the year and in 2021, helping to sustain the yen over time.

Investors are hesitant to buy the euro due to the persistence of dovishness by the European Central Bank (ECB), whose members indicated today that the bank is likely to continue to intensify its easing policy: the Governing Council should increase monetary accommodation to avoid market fragmentation, given the worsening outlook for both activity both economic and inflation.

The statistics released today about US retail in October came below market expectations, which increases market concerns about the recovery of the US economy from the pandemic. However, Walmart Inc today released a greater than expected increase in same-store quarterly sales and exceeded profit expectations, amid a 79% increase in your online business. Total revenue increased 5.2% to $ 134.71 billion, exceeding estimates for US $ 132.23 billion. Sales in US stores opened at least a year increased by 6.4%, excluding fuels in 3Q20. Analysts estimated an increase of 4.16%. The increase in demand for essential products at Walmart seen at the height of blockages extended to the second half of the year, with consumers relying on delivery options on the same day and in-store pick-up services to buy everything from groceries to sneakers. Walmart said on Tuesday that incurred approximately $ 600 million in additional COVID-19 expenses, which included higher salaries for employees deposits and bonuses for store employees, as well as spending more to keep their facilities clean.

Highlights

EURUSD opened the week close to 1.183, after rising 0.24% on Friday. Today, it is hovering between 1.1815 and 1.177 without a well-defined direction. Investors are more open to risk earlier this week after yet another drugmaker announces that its coronavirus vaccine is highly effective in preventing COVID-19. In addition, 15 economies in the Asia-Pacific region signed an important agreement with the aim of reducing commercial tariffs. China and Japan’s 3Q20 industrial production and GDP were above expectations, raising hopes for a global economic recovery.

Also, without a defined direction and close to stability, the DXY is oscillating between 92.4 and 92.7 thousand points, the yen opened the week close to 104.9, gold is trading at around $ 1,892 an ounce and silver is trading at $ 24.4 an ounce.

The main factors considered by investors for their decision making at the moment are:

• VID COVID-19: The American pharmaceutical company Moderna announced on Sunday that its experimental vaccine is 94.5% effective in preventing coronavirus. In addition to last week’s Pfizer / BioNTech vaccine news, the announcement of Moderna brought encouragement to investors, who now more confidently price the end of the pandemic and the resumption economy around the world. US COVID-19 cases continue to rise to 11 million on Sunday. Meanwhile, states are tightening circulation restrictions, with Michigan closing schools, bars and restaurants. In Washington, restaurants, gyms, cinemas, theaters and museums will be closed. Germany reported 16,947 new Covid-19 cases and the government wants to increase social isolation, as the disease is spreading at a rapid rate despite the blockade implemented in early November. France recorded 27,228 new cases in the last 24 hours, raising hopes that the peaks of the second wave of the pandemic have passed. Prime Minister Briton Boris Johnson isolated himself after contacting someone infected, but said he had no symptoms. Austria will close schools and non-essential businesses from tomorrow.
• MACROECONOMY: Industrial production in Japan grew for the fourth consecutive month in September and the economy of country came out of recession in 3Q20, growing 5% better than expected due to an increase in domestic demand and exports. China’s economy gained momentum in October, supported by gains in industrial production (+ 6.9% yoy in October), retail sales (+ 4.3%, third consecutive month of expansion) and investment in assets (+ 1.8% yoy in the first ten months of the year). Meanwhile, 15 nations in the Asia Pacific signed one of the largest free trade agreements in history, covering 2.2 billion people and 30% of world economic production. The benefits of the agreement include the elimination of tariffs of at least 92% on goods traded between countries participants, as well as stricter provisions to deal with non-tariff measures, improvements in areas such as protection of personal and consumer information online, transparency and paperless commerce.
• BREXIT: Brexit chief negotiator Frost said the UK will “not change” its position as it returns to Brussels for negotiations. Negotiations between the UK and the EU have made no progress on competition and fisheries rules, while the EU summit on 19 November is seen as the deadline for a draft Brexit deal
• USA USA ELECTIONS: President-elect Joe Biden’s scientific advisers will meet this week with companies companies that develop coronavirus vaccines to assess the logistical challenges of vaccination widespread.
• ACTIONS: In the UK, Vodafone Plc’s shares rose after the mobile operator said it was increasingly confident about their performance throughout the year. In Spain, the shares of the financial group BBVA rose more than 15% after the announcement that its business in the USA, BBVA USA Bancshares, will be sold to PNC Financial Services Group. The entire European banking sector is operating on a high after this news. In Italy, the Page 2 payments Nexi SpA announced another stage of its market consolidation process: it is buying its competitor, Nets A / S, of a private equity and Poste Italiane announced a preliminary agreement to sell its 80% stake in the Nexive Group. In France, Nissan has announced that it wants to sell some or all of its stake 34% at Mitsubishi Motors, which would change the alliance that the two companies have for Renault. In the USA, the launch success of Elon Musk’s SpaceX rocket on Sunday night is helping to appreciate Tesla and other companies in the technology segment.

News

The American pharmaceutical Modern announced on Sunday that its experimental vaccine is 94.5% effective in preventing the coronavirus. In addition to last week’s Pfizer / BioNTech vaccine news, Moderna’s announcement investors, who are now more confident in pricing the end of the pandemic and the resumption of the economy worldwide, already that the US may have two vaccines authorized for emergency use in December, with up to 60 million doses available until the end of the year. Next year, the US government may have access to more than 1 billion doses from drug manufacturers. vaccine, more than necessary for the country’s population of 330 million people. A crucial advantage of the vaccine Modern is not requiring ultra-cold storage, like Pfizer, which makes it easier to distribute. Moderna believes that it remains stable at typical refrigerator temperatures, between 2 and 8 degrees Celsius, for 30 days and that it can be stored for up to six months at minus 20º Celsius. The Pfizer vaccine needs to be transported and stored at 70º Celsius negative and under typical refrigerator temperatures, it can be stored for up to five days.

Test data from 30,000 Moderna participants also showed that the vaccine prevented severe cases of Covid-19, a question not yet answered by the Pfizer vaccine. Of the 95 cases in the Moderna test, 11 were severe and all of them occurred among volunteers who received the placebo

Moderna, which is part of the US government’s Operation Warp Speed ​​program, expects to produce around 20 million of vaccine doses to the US this year, much of which the company has already manufactured, and is ready to send them if it receives authorization from the US Food and Drug Administration (FDA). The company expects to have sufficient safety data to receive authorization in the U.S. next week, and apply for emergency use authorization in the coming weeks.

In Asia, the Integral Regional Economic Partnership (RCEP) was signed this Sunday, aiming to progressively reduce tariffs trade, combat protectionism, increase investment and allow freer movement of goods in the region. O agreement includes China, Japan, South Korea, Australia, New Zealand and the 10 members of the Association of Southeast Nations Asia: Brunei, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Indonesia and the Philippines. India was involved in the first discussions, but gave up last year due to concerns about Chinese imports. The states ATR Up ATR Down ATR% POC VWAP 1.1900 1.1795 58% 1.1844 1.1848 Page 3 members said there is still room for India to join the RCEP. Anyone can join the RCEP 18 months after their entry into force, but India, as one of the original negotiating partners, may join at any time as soon as the agreement comes into force. The agreement must be ratified before it comes into force, a process that will take months to begin and years to complete.

The Japanese economy advanced 5% in 3Q20 compared to the previous quarter, surpassing the market consensus of 4.4%. It is was the first quarterly growth rate in a year, as activity and demand recovered from serious damage caused by the COVID-19 crisis. Private consumption increased for the first time in four quarters (4.7%), while the fixed capital investment decreased at a smoother pace (-3.4%). Exports grew for the first time in three quarters (7%) while imports fell (-9.8%).

Highlights

This Tuesday, the EURUSD opened extending gains, reaching 1.184, and then dropped to 1.178. Once the new support was established, the asset gained again to the level of 1.18. This drop was influenced by news that France’s unemployment rate has reached its highest level in the last 2 years and that investor mood in Germany have dropped more than expected. The second wave of coronavirus infections remains very strong, and blockages to circulation continue to take Europe. France, Spain and the United Kingdom have already reached more than 1 million confirmed cases, all with more than 20 thousand cases per day. France recorded 551 new deaths on Monday, the highest number in this second wave.

DXY continues to operate between 92.5 and 92.8 thousand points. The market is optimistic about the post-pandemic economic recovery in the US, and is already operating in the expectation that FED may shorten the period of low interest rates. This optimism is the result of news about the vaccine developed by the Pfizer / BioNTech partnership, proving 90% effectiveness in preventing infection among people without evidence of previous disease, which could be made available soon, at affordable prices, as stated by the head of BioNTech strategy, Ryan Richardson: “We seek to pursue a balanced approach that recognizes that innovation requires capital investment, so the plan for the price of our vaccine is well below typical market rates, reflecting the situation we are in and the objective to guarantee wide access around the world”.

In the United States, which is the epicenter of COVID-19, the number of infections has surpassed the mark of 10 million, with almost 59 thousand patients hospitalized on Monday, the highest number of patients in treatment for the disease ever registered in the country. In the past 24 hours, about 120,000 new infections were reported in the United States.

US futures pointed to losses at the opening on Tuesday. On Monday, the Dow Jones jumped 835 points or 3.0% to 29,158, reserving its best day since early June. The S&P 500 rose 41 points or 1.8% to 3551. The Nasdaq fell 182 points or 1.5% to 11,714.

Gold is rising close to 1% today, to $ 1,885 an ounce, after falling close to 4.5% in the previous session. Silver rose slightly to $ 24.2 an ounce today, after falling close to 6% in the previous session.

News

In the United Kingdom, the issues that are dominating the financial market are the Brexit negotiations, resumed yesterday, and the vote on the Internal Market Bill, a package that aims to establish the conditions of trade between the four British nations in the post-Brexit period. British Finance Minister Rishi Sunak said yesterday that the UK and the EU had made significant progress in the negotiations. Also yesterday, the House of Lords voted Prime Minister Boris Johnson’s proposal for the Internal Market Bill, which goes against the Brexit deal. The proposal contains clauses necessary to protect Northern Ireland’s delicate status as part of the United Kingdom, as it remains a member of the European Union. Johnson says the clauses exist to act as a safety net if ongoing negotiations with the EU fail to figure out how goods can flow between Britain, the British province of Northern Ireland and across the open border with Ireland. However, many see this bill as a negotiating ploy to obtain concessions from the EU in trade negotiations. Including Joe Biden, who has already spoken out on this issue. Despite the strong opposition faced in the House of Lords, the bill had already been passed in the House of Commons

Still in the United Kingdom, employment figures came in worse than expected by the market. In the third quarter of 2020, 164,000 vacancies were eliminated, totaling 32.51 million people in the labor market, when investors expected a drop of 148 thousand. Now 675,000 jobs have been lost since the coronavirus pandemic began, despite efforts by the government, which subsidizes wages, and has prevented even more jobs from being cut.

Against this backdrop, markets have reduced expectations that UK interest rates will be negative, for June 2021 starting in May

In Germany, the November ZEW indicator (which measures market sentiment for the next 6 months, through a survey with 350 German institutional investors and analysts) fell 17.1 points from the previous month to 39, 0, way below the market expectation of 41.7. Investors expressed concern about the economic impact of the second wave of coronavirus infections and the resulting prospect of the German economy returning to recession. According to the survey participants, neither the Brexit negotiations nor the outcome of the presidential elections in the United States are impacting economic expectations for Germany. The assessment of Germany’s economic situation has worsened somewhat, currently standing at -64.3 points, 4.8 points below that recorded in the previous month.

In France, the highlights today are data on industrial production and unemployment. Industrial production in France in September 2020 increased 1.4% over the previous month, above market forecasts of 0.8%. The figures show that the industrial sector has been recovering, growing for the 5th consecutive month, after a record drop of 20.7% in April, despite still being 5.1% below the pre-pandemic level. Manufacturing grew by 2.2%, with production of transportation equipment increasing by 8.8%. Meanwhile, mining and utilities shrank 2.8%. France’s unemployment rate increased to 9% in the third quarter of 2020, above market expectations of 7.9%. Unemployment data for the first two quarters of 2020 were distorted because of the mid-March to mid-May block, which reduced the number of people technically classified as unemployed, since it was impossible to look for a job. The behavior of labor demand resumed in the third quarter, consequently unemployment increased sharply in the third quarter of 2020. However, the increase in unemployment compared to the third quarter of 2019 (+0.6 points), shows a clear deterioration in the labor market.

In Italy, the highlight is industrial production, which fell 5.6% in September 2020 compared to the previous month, above market expectations of a 2% drop. Production fell for consumer goods (-4.8%); capital goods (-3.9%); intermediate goods (-1.6%) and energy (-0.3%). In comparison with the previous year, industrial production fell by 5.1%.

Considering the Eurozone, the ZEW indicator decreased from 19.5 points in November 2020, to 32.8 points, the lowest since April. In November, 17.2% of analysts interviewed expected a deterioration in economic activity, 32.8% did not expect changes, and 50% predicted an improvement.

In this scenario, European stocks are extending gains on Tuesday. In Germany, Adidas and the Deutsche Post reported negative quarterly results. Adidas led the losses, falling about 4%, as it said it expected sales to grow again in China in the fourth quarter, but predicted an overall drop in sales similar to that reported in the third quarter. Logistics group Deutsche Post shares fell more than 3% after pessimistic results; while the consumer goods group Henkel rose slightly after the company reported sales growth of 3.9% in the third quarter, but warned that the pandemic will weigh on its results in the final three months of the year. Meanwhile, Thyssenkrupp’s stocks jumped about 5%, as the group is in talks with the German government about more than € 5 billion in steel aid.

Analysis

Considering Stoch in an overbought position, and pessimistic data regarding the European economic situation, EURUSD was expected to fall today.

With the POC at 1.1832, VWAP at 1.1816, the asset opened extending gains, close to 1.1816. The asset found resistance at 1.1841 and started a downward trend until reaching support at 1.178.

Throughout the session there were several green and red candles, demonstrating that the market was not on a specific course.

Following the M1 and M5 Stoch, I opened 3 BUY orders, between 1.178 and 1.18. I opened 4 SELL orders between 1.18 and 1.181. With these 7 orders, with a volume of 0.1 each, I scored 18.46 points.

However, also following Stoch, I opened 3 SELL orders between 1.1782 and 1.1784 that have not yet closed. I believe that in the next few hours EURUSD will still return to this level and these orders will reach their TP before SL. Let´s wait and see.

Calendar:

Amid growing concerns over government measures to be taken to stem the sharp rise in the number of coronavirus cases in Europe and the US, as well as the lack of solution to the Brexit issue and the US economic stimulus package, on Tuesday the euro is trading close to $ 1.18 and the DXY to 93,000 points.

As winter comes to the northern hemisphere, coronavirus cases in Europe have skyrocketed and hospitalization rates continue to rise, rising the need for lockdowns. USA, Russia and France reported records in the numbers of new infections per day, and deaths in the USA exceeded the 225,000 mark. Spain and Italy already announced stricter blocking measures last weekend, which Germany is expected to do soon. France could close borders again, increase curfew and ban people from leaving on weekends, Belgium is considering a new lockdown, Poland and the Czech Republic have signaled that new restrictions will soon be imposed; and Ireland paralyzed its economy for 6 weeks.

The Mayor of London said that he is waiting for the city to reach the limit of 100 new infections per day for every 100,000 inhabitants to enter level 2 of restrictions, where Londoners could not meet anyone outside their homes, and do their best not to leave their houses for at least 2 weeks. The current level is already 90 new cases for every 100,000 inhabitants, and these restrictions are expected to be announced later this week.

Contrary to what happened during the first wave of infections, governments now face opposition to new blockades, both from companies and people. Protests erupted in major cities like London, Naples and Berlin.

However, news that the vaccine against COVID-19, which is being developed by AstraZeneca and the University of Oxford, produced an immune response in the elderly and young people and that the adverse reactions were less among the elderly encouraged the market.

On the other hand, scientists at Imperial College London tracked antibody levels in the British population after the first wave of Covid-19 infections in March and April this year and found that the prevalence of antibodies dropped from 6% of the population at the end of June to 4.4% in September, suggesting that protection after infection may not last.

Meanwhile in the U.S., hopes for a new economic stimulus project ahead of next week’s presidential election have faded, especially after White House economic adviser Larry Kudlow said the differences between the two sides “have narrowed” , but “the narrower it is, the more conditions arise on the other side.” In addition, the Senate majority leader suspended the House’s activities until November 9, after the election.

Today, the quarter earnings release of 3M, Caterpillar, Merck & Co, Pfizer and Advanced Micro Devices exceeded expectations and excited the market.

The growing risk aversion in the market, caused by the US presidential election, is starting to limit major movements in assets. With only a week left until the election, polls are giving Democratic candidate Joe Biden a solid advantage over President Donald Trump, although only a small advantage in some decisive states.

News:

In France, in September 2020, the number of unemployed people decreased by 15.2 thousand in relation to the previous month, to 3.606 million, still well above pre-pandemic levels, since in comparison with the same month of the previous year, the number of people registered as unemployed increased by 274.5 thousand.

Still in France, the prices of industrial products rose 0.2% in September in relation to the previous month, pulled upwards by mining, energy and water (1.65%), especially distribution of electricity, gas, steam and air conditioning; chemical products (0.6%); and transportation (0.4%), especially automobiles. On the other hand, the price of refined oil fell 7.5% and that of food and beverages 0.1%. Compared to the previous year, producer prices overall fell 2.4%

The unemployment rate in Spain increased to 16.26% in the third quarter of 2020. This rate does not include licensed workers, which means that the real number can be significantly higher. This was the biggest quarterly jump since 2012, with the number of unemployed increasing by 355 thousand, to 3.723 million people. Young people were the most affected, as the unemployment rate among those under 25 was 40.45% in the third quarter. The third quarter is generally the time of year when more people are working in Spain, as summer vacation tourism increases seasonal employment. However, hospitality, accommodation and transportation are among the activities that suffered most from the Covid-19 pandemic.

In the UK, retail has shown signs of slowing down, with sales dropping unexpectedly from the reading taken in October 2020, as coronavirus cases increase and restrictions are tightened in many parts of the country. Food volumes were stable after five months of strong growth. There was a drop in sales in the non-food segments of department stores, clothing and “other normal products”, while the furniture, DIY and recreational items segments reported strong growth. Internet sales growth has also returned to the long-term average. According to trends, sales and order volumes are expected to fall again in November.

Loans to households in the Eurozone increased 3.1% in September 2020, still at the slowest rate of increase observed in the last 2 years. Loans to companies rose 7.1% in the period, maintaining the strongest increase in the last 11 years.

Analysis:

Will the dollar continue to be considered the “safe heaven” for a long time? Even in the face of so many economic changes? An article published by Bloomberg shows that yes, it will.

When thinking about the future of the US dollar, it is crucial to separate the analysis on two fronts: the devaluation of the US currency against other currencies and the prospect of the United States losing its place as the issuer of the world’s main reserve currency.

Regarding the exchange rate, it is important to highlight that the dollar has historically fluctuated in multi-annual cycles since the early 1970s. Therefore, any devaluation could be considered one-off and should not cause concern in the long time. This means that the dollar will maintain its “safe-heaven” place on the global stage, no matter how weak it may become in the coming months. And there are a number of reasons showing that the dollar will fall further:

• The dollar tends to appreciate when US interest rates rise and to weaken when it falls. Short-term Treasury yields are set
at close to zero and are expected to remain so for years, while long-term yields have increased somewhat, but remain
close to their historic lows.
• The federal budget deficit has increased this year in response to the Covid-19 pandemic. The market is already working
with growing deficit for next year, especially if the Democratic Party takes the White House and both chambers of
Congress, as polls indicate. America’s so-called twin deficits – current account and budget – are so extreme that a
Bloomberg News regression analysis projects a 31% drop in the next two years on DXY.
• Urban chaos, violent conflict and uncertainty about who will control the country in the coming years create a very bad
business environment. Worst case scenario, companies and investors may decide that the United States is a bankrupt
state and that it is better to keep your money elsewhere, at least until things calm down. The result could be an
unprecedented capital flight – money leaving one of the largest economies in the world and abandoning the reserve
currency at the same time. This would likely mean a fall in the dollar, rising inflation in the US and destabilizing hot money
flows to Europe, Japan, Canada, Australia, South Korea and other more stable developed nations. As unlikely as this
scenario appears, it must be considered.
• Four more years of the Trump administration and its protectionist trade policies and withdrawal from crucial global
deals would likely erode the dollar’s value because the rest of the world would view America as an unreliable global
leader.
• On the other hand, a non-contested victory by Joe Biden, combined with a Republican Senate and a Democratic
Chamber, could mean even greater impasses and budget deficits than today.

Data from the International Monetary Fund show that there are USD 6.8 trillion in foreign exchange reserves in dollars, USD 2.2 trillion in euros, USD 625 billion in yen and USD 486 billion in pounds. Therefore, it is not in anyone’s interest (at least not soon) for the US dollar to lose its place as a reserve currency. So don’t worry about the dollar’s continuing decline. Whether considered weak or strong, it must remain the epicenter of the financial world for many years to come.

Calendar:

After reaching USD 1,188 yesterday, its highest level since September 16th, the market is bearish on EURUSD trading. The USD weakened yesterday as market confidence increased expecting a close for fiscal stimulus deal for the U.S., generating demand for riskier assets, but that optimism dissipated today as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin did not announce a deal on Wednesday as promised, even though they will resume talks again today. Investors, however, are already considering unlikely for a deal to be struck before the presidential election, which takes place in less than 2 weeks. Negotiators on both sides acknowlegded that the lack of scheduling and the resistance in the Republican-controlled Senate make any agreement very unlikely before the elections. The US dollar was also pressured by the pound sterling, which jumped to a six-week high after the BoE rejected negative interest rates.

As such, the DXY index is trading higher at around 92.8 this Thursday. The market is looking forward to the final debate between Donald Trump and Joe Biden that takes place tonight. Biden remains ahead in the polls, and Wall Street has positioned itself in his favor. At the debate they will probably discuss the news that Iran and Russia are trying to interfere in the presidential election and the weakening of the dollar amid growing optimism about the global economic recovery, especially a robust recovery in China.

After a few days with a strong appetite for risk, investors are more cautious as they await news about Brexit and the US fiscal stimulus package. At the same time, concerns about the spread of the coronavirus pandemic across Europe continued to increase, especially after Spain and France reached 1 million infected, Italy and Germany released their highest numbers for new infections by Covid- 19 in one day, and the UK has seen a marked increase in new infections, raising fears that Europe is inevitably heading back to the lockdowns seen earlier this year.

European leaders across the continent have introduced new restrictions to curb the spread of the disease, with a combination of national and regional measures and curfews in regions such as Paris, Rome and Madrid. Globally, the number of people infected with the coronavirus has exceeded 41.2 million, of which at least 1.13 million have died and 28.12 million have recovered, according to data released by Johns Hopkins University. Vaccine testing continues to move around the world, with good and bad news.

European leaders across the continent have introduced new restrictions to curb the spread of the disease, with a combination of national and regional measures and curfews in regions such as Paris, Rome and Madrid. Globally, the number of people infected with the coronavirus has exceeded 41.2 million, of which at least 1.13 million have died and 28.12 million have recovered, according to data released by Johns Hopkins University. Vaccine testing continues to move around the world, with good and bad news.

News:

The GfK index, which points the consumer sentiment in Germany, fell to -3.1 in November 2020, worse than expected by the market consensus of -2.8. The index has worsened since August amid fears about another lockdown after the resurgence of COVID-19 cases in the country. Consumers are working with a scenario where the recovery of the German economy is expected to take even longer than expected, or the pandemic is expected to last longer than anticipated.

In France, industry sentiment dropped to 93 in October 2020, from 94 in September, and below forecasts of 96, remaining below pre-pandemic levels and the long-term average of 100.

In the UK, the British Industry Confederation’s order book rose 14 points to -34 in October 2020, its highest level since March and exceeding market expectations of -45. Despite the improvement, conditions in British industry remain difficult. In the next quarter, manufacturers expect production to grow at a moderate pace. However, total new orders are expected to remain unchanged, reflecting a steady growth in domestic orders and a slower decline in export orders. Employment is expected to remain virtually unchanged in the next quarter, after six quarters of decline. The manufacturers showed tranquility regarding access to financing, however, they showed concern with access to raw materials and components.

In the USA, the FED “Beige Book” was published yesterday (a report published eight times a year, which gathers information on the current economic conditions of each of the 12 districts – presented on the map below, through reports from bank directors and agencies and interviews with key business contacts, economists, market experts and other sources) suggesting that the United States economy has been expanding at a “light to modest” pace. The residential housing sector has shown the best performance of the economy, demonstrating that the increase in demand for mortgages is the main driver of the general demand for loans. The low interest rate in the country helps this scenario. Vehicles demand remained stable, but low inventories restricted sales to varying degrees. The sources consulted said they were generally optimistic or positive about the future, but with a considerable degree of uncertainty. Many expressed concern that default rates may increase in the coming months, however, default rates have remained stable so far. FED member Lael Brainard said yesterday that the American economic recovery remains highly uncertain and uneven, emphasizing the need for additional fiscal support.

With that in mind, investors will look at the release of weekly unemployment insurance claims data this Thursday. The expectation is that 860 thousand American workers applied for unemployment benefits during the week ended on October 17, the lowest level of the last two months, and below the figures obtained in the previous week of 898 thousand applications. It would be the 8th consecutive week with orders above 800 thousand, pointing to a slow recovery in the labor market. Meanwhile, claims for continuing benefits are expected to drop to less than 10 million for the first time since March 28, but will still remain well above the 1.7 million average reported before the pandemic.

Tonight Donald Trump faces Joe Biden in the last broadcast debate of the presidential election campaign, probably the last opportunity for Trump to gain some room in the polls before the election. The debate comes a day after Trump’s director of national intelligence, John Ratcliffe, and FBI chief Christopher Wray, said Iranian and Russian agents had invaded registered voter lists and were using the information to influence the election. While Ratcliffe said the Iranian effort was aimed at undermining the Trump campaign, reports indicate that the Iranian effort focused on sending intimidating emails to registered Democrats, telling them to “vote for Trump or…”. The emails were supposedly sent by the right-wing group “Proud Boys”.

In this scenario, gold and silver are being traded bearishly, with the USD recovering some ground in view of the reduced risk appetite in the market.

Analysis:

In the book “The Consistent Trader”, author Sam Eder defends the importance of consistency in the trader’s work. The “consistent trader” is the one capable of reading the market to use the right strategy for the momentary conditions; capable to find very good settings to increase your probability of winning; capable to identify the low risk / high reward entry point; and capable to set appropriate goals.

Throughout the book, the author instructs traders to:

• Build a position sizing model to achieve your goals
• Protect yourself from losses with a hard-to-reach stop loss
• Operate in the market ahead of you with a complex exit strategy
• Stay calm and be error free for executing perfect order

The author uses a methodology to build a winning ForEx trading system. A Forex trading system is a set of rules that you have to place a buy or sell order. The first part of developing a high quality Forex trading system is setting goals. The second step is to develop a set of position sizing rules that are designed to meet these objectives.

• Earnings
• Maximum drawdown
• Maximum drawdown chance
• Negotiation opportunity
• Win rate
• Target risk / reward ratio
• Maximum number of positions

Once you are clear about these objectives, you will have the necessary ingredients to develop a robust system for building a set of trading rules to achieve your goals and to negotiate with discipline

The drThe drawdown is the maximum drop in the value of an asset in relation to its highest quote. For example, if you had a trading account with $ 10,000 in it and lost $ 1,000, you would be having a drawdown of 10%. Although you may never want to have a drawdown, they cannot be avoided in trading. And they must be seen as an intrinsic cost to the business and, therefore, must be planned before it occurs. When traders don’t plan their drawdowns, they tend to make mistakes and leave trading at the wrong time.

The author suggests that the trader must be more conservative with his drawdowns and does not risk more than 2-3% per month if he wants to earn 10%, or 10% per year if he wants to earn 50%. However, it is important not to limit yourself to taking advantage of the opportunities in front of you because of your drawdown limit. For some people, taking a big risk allows them to generate big profits.

On page 108 of the book the author presents a table showing that after exceeding the established drawdown it can be difficult to recover, and the greater the drawdown, the greater the effort to be made:

If you reach your drawdown, you have a few options, including: reducing the size of your position; continue trading and waiting for winning trades, pause your trading and analyze what is working and what is not, or stop trading altogether. It is important to write down on your trading plan exactly what to do.

Calendar:

In yesterday’s trading session, the USD rose sharply with investors seeking security after US President Donald Trump ended talks with Democratic leaders on a new stimulus package until after the election, scheduled for November 3, 2020. ” I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business ” Trump wrote in a Tweet.

As shown in the graph below, the euro strengthened against the dollar during the day, but in the late afternoon it reversed and ended up loosing.

Investors will now turn their attention to the European Central Bank’s monetary policy meeting, which takes place on Thursday, in the hope of further stimulus for the recovery of the post-pandemic European economy.

News:

Industrial production in Germany unexpectedly dropped 0.2% in August 2020 in comparison to the previous month, impacted especially by the capital goods (-3.6%), consumer goods (-1.3%) and construction (-0.3%) sectors. This was the first drop in Germany´s industrial production since April. Automotive industry production fell 12.5%, after an 8.9% increase in July, placing it at a level close to 25% below the level of February 2020, before the pandemic hit the country. On the other hand, production grew in the sectors of intermediate goods (3.3%) and energy (6.7 percent). In comparison to August 2019, German industrial production fell 9.6%.

Retail sales in Italy rose 8.2% in August 2020 in comparison to the previous month. Sales of non-food products (13.8%) and food (1.6%) recovered the losses obtained in July. Compared to August 2019, Italian retail trade rose 0.8%

Analysis:

According to author Thomas N. Bulkowski, in the book “Getting Sarted in Chart Patterns”, the patterns are like footprints on the road, which you can follow to get along with the money at your destination.

According to Bulkowski, to be assertive in your trading, what you observe in the trend lines, how many times the price touched that line, what is the time interval that this line is reaching and what is the angle that this line forms.

From this analysis the trader can start to establish his/hers target price. One way, which works between 63% (upward trend lines) and 80% (downward trend lines) of the time, uses the distance from the trend line to the high price (A – B), measured vertically and then projected to low from breakout (D) to obtain a post-breakout target price.

Using the same interval of time to draw the external trend line of the peaks and the one of the valleys will make you form a channel – two parallel trend lines with prices fluctuating between them. Think of the canal as a river where the price runs. You will ride your canoe between the banks: when you reach the bottom of the channel, buy; and sell when it shows signs that will not be reaching the top line. If the price does not reach the top (or bottom) of the channel, it may signal a weakening (or strengthening) trend and a time to sell (or buy).

Pay close attention since its more likely – but not guarantee – that when the price reaches the channel’s trend lines, prices stage a breakdown (or upward) and the trendline bursts. There we found a “change in trend”.

The author suggests a trend change identification method called 1-2-3, which follows the following 3 rules:

1. Draw a trend line from the lowest valley before the highest peak and leading to the highest peak on the graph, so that the trend line does not replace any price between them. Notice how the line replaces prices. Rotate the line from point B to the right until the line touches, but do not override the prices. Find the breakout, which is your target price.
2. The price should test the rise again after the trend line breaks. This means that the price should try to rise back to the price level of the highest peak, but not exceed it much, if any.
3. Finally, the price should close below the lowest valley between points 1 (the breakout price) and 2 (the upward retest).

Let´s make a test using EURUSD prices in the last month, in the chart below:

1. I identified the highest peak
2. I identified the lowest valley before this highest peak
3. I draw a line between them (here, the yellow line with longer strokes)
4. Look at the price behavior on the right and look for the next highest peak
5. Draw a line between the lowest valley before the highest peak and the new peak (here, the yellow line with shorter strokes)
6. Set your target price below this second line.

After this analysis, the author gives some tips regarding the analysis of the trend lines looking for the target price:

• Expect a pullback (break-down) or throwback (break-up) after the price pierces a trend line.
• When the price deviates from the trend line, momentum increases. When the price moves towards the trend line, momentum is decreasing. When the price goes up along the trend line, the rate of change is constant.
• Trend line mirrors: sometimes a price increase on one side of the trend line reflects on the other side of the line as a drop and vice versa.
• When the price crosses a steep trend line, it usually rises at a slower pace, following a new trend line.
• When the price pierces a downward trend line and makes a higher peak (note: this is the second highest peak), connect the two peaks with an upward trend line. Then, draw a new line parallel to the original trend line, starting at the bottom between the two peaks. The lower trend line will show where the price is likely to reverse.
• During strong bullish trends, the price may pierce the trend line and fall for about a month before resuming the bullish trend at almost the same angle. This stair climb is a graphical pattern called measured move up. The reverse also applies and forms a graphic pattern called measured move down.
• When prices exceed the trend line, note the previous day’s close. For upward trend lines, if the previous close was close or at the intraday high, the chances of a downward break being false increase (because the profit realization has been taken away, forcing the price down). If the close was close to the intraday low, chances are high that the break is valid.

Looking at the EURUSD´s last day chart, plotting two trend lines from the lowest valley, I would establish the pullback close to 1.178 and the throwback close to 1.174. Throughout today’s trading, I would observe the times when the price is far from this range to place my positions. The strength of my orders would depend on the volume at the moment: the greater the volume, the greater the force and vice versa.

Calendar:

EURUSD is trading at 1,178 today after ECB President Christine Lagarde told the Wall Street Jornal that the ECB is ready to launch further monetary stimulus to the eurozone’s economic recovery, including further cuts in its interest rates, which are already negative. Lagarde also warned that the production level should not return to pre-pandemic levels until the end of 2022.

Next Thursday the ECB’s monetary policy meeting will take place, and investors will closely monitor its results, in the expectation of knowing what the Institution’s proposed stimulus for European economic recovery will be. Trading the rumor, EURUSD continues to appreciate this week, from 1.1715 to almost 1.18.

News:

The European Central Bank warned the markets that the profitability of the largest banks in the euro zone plummeted in 2Q20 even with defaults under control. The return on equity in the first half of 2020, at the height of the pandemic, was 0.01%, well below the 6.01% achieved in the previous year, with at least 7 of the 19 eurozone countries showing negative returns.

Negotiations on the post-Brexit trade agreement between the UK and the EU continue to attract investors’ attention. At the moment, there is optimism in the market, as British Prime Minister Boris Johnson and European Commission President von der Leyen approved another month of negotiations. Chief negotiators on both sides confirmed that there has been enough progress in recent negotiations to justify a last push for an agreement. Negotiations will resume tomorrow and EU chief negotiator Michel Barnier will meet today with German Chancellor Angela Merkel in Berlin. Merkel suggested on Friday that the EU should show greater flexibility in negotiations.

Polls over the American presidential election are pointing to a victory for Democratic candidate Joe Biden, with more than a 10% margin over his opponent and current president, Republican Donald Trump. Trump, who was diagnosed with COVID19 last Friday and has been hospitalized since, left the hospital yesterday and promised to resume the campaign as soon as possible. The next debates are scheduled for October 15 and 22, however, this calendar may change due to Trump’s illness and Biden’s age (who is 77 years old).

Analysis:

According to author Thomas N. Bulkowski, in the book “Getting Sarted in Chart Patterns”, patterns are like footprints on the road, which you can follow to get along with the money at your destination.

According to Bulkowski, in almost all price charts for an asset, there will be a zigzag. If you draw a line connecting the peaks of this zigzag and another connecting its valleys, you will obtain an external trend line. The trend lines indicate buying or selling opportunities when the price crosses them. When the price touches the valley line, it is a sign that the price should go up so it’s time to buy. When the price touches the peak line, it is a sign that the asset price will fall, so it is time to sell.

Internal trend lines are drawn on the flat, or bottom, of peaks or valleys and often cut prices. They represent the behavior of the masses.

The curved trend lines show that prices have risen or fallen more than expected, but indicate that this movement will eventually stop, so everyone runs for exits, forcing prices to change dramatically. When the price closes below a rising but curved trend line, this is the sell signal and can help you to be one of the first to exit. An abrupt reversal generally follows the breaking of a curved trendline.

To be assertive in your trading, what should you do besides drawing these lines? Observe how many times the price has touched that line, what is the time interval that this line is reaching and what is the angle that this line forms.

The more times price touches a trendline, the more significant becomes a breakout from the trendline. The author gives the following example: “observing 85 downward trend lines that were priced by touching the trend lines 3 times. After an upward breach, the price rose by an average of 33%. Then I compared 40 trend lines with 5 touches and found that the post-break increase was on average 57%. To verify this result, I divide the trend lines into 4 rings or less. They showed gains on average 35%. Those trend lines with more than four touches went up an average of 48%. ”

Long trend lines perform better than short ones. The author says that “139 days is a good time to establish a long enough line. While shorter trend lines led the trading decision to profit by an average of 33%, long trend lines made 43% gains ”.

The steeper the trendline, the worse the performance. Look for trend lines with an inclination from 30 to 45 degrees, they are more reliable. Outside this range the price movement can reverse very quickly.

In addition to looking at the information inherent to the trendlines, it is also relevant to observe the volume traded. If the volume is increasing, the tendency is to reinforce the direction of the line. If the volume is decreasing, the trend is that the direction of the line will be weakened.

Calendar:

The profits were modest today for the EURUSD pair, with the release of encouraging data regarding the sentiment of purchasing managers, as a trend for the economy, both in Europe and in the USA.

Investors are concerned with the inflation levels in the largest economies, especially in the euro zone, where the consumer inflation was negative by 0.3% in September, which marked the second consecutive month of deflation. In order to improve that fact, the ECB reduced interest rates to negative territory and implemented stimulus programs injecting trillions of euros into countries, but the economic activity continued weak and steadily declining. The expectation is that any decision by the ECB will only come in December, when the bank publishes its economic projections, including about inflation. This would be a logical moment for the ECB to announce an increase in its Pandemic Emergency Purchase Program (PEPP), as this would probably weaken the euro value, throughout the increasing in its availability.

The D1 Stoch index is moving out of its overbought position.

News:

The IHS Markit US Services PMI, an index that points to the sentiment of purchasing managers in the North American services sector, or the trend for this market, was 54.6 in September 2020, below the previous month (55.0 ) but signaling a solid recovery in the service sector. The volume of new business in the month had the greatest expansion since the beginning of the pandemic, driven by the strengthening in the domestic demand and an increase in exports. In addition, the rate of job creation was encouraging as were pending jobs. About prices, input costs increased at a marked rate due to higher wage and equipment costs, with many highlighting the increase in fixed asset and freight prices. Sales prices increased and reached the best monthly rate since September 2018, allowing prices to increase more than costs.

The IHS Markit US Composite PMI, an index that points to the sentiment of North American purchasing managers in the private sector, which points to a trend, stood at 54.3 in September 2020, little changed compared to the August measurement of 54.6. As we have seen, service sector activity continued to grow at a solid rate, and industrial production in September 2020 was the fastest growing since November 2019. The volume of new business increased at a more pronounced pace and employment continued growing. Sales prices increased sharply and at a faster rate than the costs of inputs, with the consumer absorbing the transfer price.

Payroll data was released last Friday, showing that the United States economy added 661,000 jobs in September 2020, well below the 1.489 million obtained in the previous month, and market forecasts of 850,000. In September, non-agricultural employment was below February’s level, before the pandemic hit the US, at 10.7 million. Of the more than 22 million jobs lost in March and April, only about 11.3 million have been recovered so far. The private sector created 877 thousand new vacancies in September, while the sector published eliminated 216 thousand, mainly in education.

The IHS Markit Eurozone Services PMI, an index that points to the sentiment of purchasing managers in the European service sector, was 48.0 in September 2020, from a preliminary estimate of 47.6 and below the 50.5 obtained in August. The reading signaled a contraction in the services sector, with the overall volume of new business falling for the second consecutive month and the export business also falling sharply, extending the current period of contraction to more than two years. In addition, employment continued to fall and pending jobs decreased for the seventh consecutive month. About prices, operating expenses increased for the fourth consecutive month, while production charges fell again. Still, business confidence has strengthened for the next 12 months in September compared to the previous month. By country, Spain recorded the sharpest monthly decline, followed by Ireland. Germany was the only one to register growth.

The IHS Markit Eurozone Composite PMI, an index that points to the sentiment of purchasing managers in the European private sector, went to 50.4 in September 2020, down from 51.9 in the previous month. This reading indicated a marginal expansion in the economy, with service sector activity falling back to contraction amid an increase in coronavirus cases, while industrial production grew at the fastest pace in more than two and a half years. In general, the entry of new businesses increased slightly, and exports increased for the first time in more than two years. Meanwhile, job numbers have been reduced again, marking a seventh consecutive monthly drop. About prices, operating expenses increased for the fourth consecutive month, while production charges fell for the seventh consecutive month. Finally, business confidence grew stronger for the next 12 months in September, reaching its highest level in seven months.

Eurozone retail trade volume increased 4.4% over the previous month, in August 2020, exceeding market expectations of 2.4% growth, while countries in the region continued to relax measures COVID-19 containment system. Sales of non-food products grew 6.1%, driven by online commerce (12.4%), textiles, clothing and footwear (7.7%) and pharmaceuticals and medical goods (3.2%). The food, beverage and tobacco trade grew 2.4% after being unchanged in July, while sales of automotive fuels increased 2.1%, compared to 8.9% in the previous month. Compared to the previous year, retail sales increased 3.7%, the best result for the last 3 years.

Analysis:

According to author Thomas N. Bulkowski, in the book “Getting Sarted in Chart Patterns”, the patterns are like footprints on the road, which you can follow to get along with the money at your destination. In other words, a trader capable of analyzing graphic patterns has a good chance of making money.

According to the author, the basic questions a trader should ask.

• Did you use stops on all of your orders? Use the stop loss on all orders. That way, you don’t have to make a difficult decision at the time of the loss. In addition, a well-positioned SL is sure to provide less loss than if you try to manage the operation without a stop. As you get the hang of trading, start working with larger SL.

• Did you buy close to the annual high to increase earnings? The longer you trade, the better your trading habits will be. Regardless of the method you adopt, try to follow it as long as possible, this will make you more skilled at making an assertive reading of trends. Practice makes perfect, they say.

• Do you see trading as a business? Set realistic goals, observe your costs, track your inventory, study before making a decision (don’t be impulsive), have a plan, follow that plan.

• Did you look at the market averages and related assets before placing your orders, to see which way they were going? Did you observe the moments when you could have made a profit if you were trading that asset? Now visualize what decisions you will make from now on to profit from this asset. Also note the importance of being patient, and knowing how to wait for the right time to act.

• Are you aware of your comfort zone? In which moments of trading do you feel anxious? Worried? What works best for you, looking at the price of the asset or the profit from the order? How do you feel when you profit? And when do you profit a lot? Do you doubt the assertiveness of your own decisions? In what situations do you hesitate? How do you view your mistakes? Self-knowledge is very important for you to have control of your emotions and allow them to help you, and not hinder you, in trading. This is a very emotional job, yes, but it can be done without stress if you are in control of your reactions.

• Are you ready? Do your analysis, and set the prices you believe are your goals. From there keep in mind that sometimes it is better to profit than to be right.

Calendar:

Euro is trading between $ 1,171 and 1,177 this Thursday, after suffering a 1.8% loss in September, its biggest single-month percentage drop since July 2019, amid concerns about a second wave of infections in Europe and their impact on the region’s economic recovery.

After gaining around 2% in September, the best monthly gain since July 2019, DXY extended losses for the 4th consecutive session to close to 93.5 on this first day of the fourth quarter, with investors’ risk appetite returning to market amid prospects for more government stimulus, and data release showing that the US economy is recovering from the pandemic (private companies created more jobs than expected in September, GDP contraction for the second quarter was revised downwards for the second time and home sales also increasing).

US House of Representatives President Nancy Pelosi and Treasury Secretary Steven Mnuchin expressed hope for an advance in the stimulus plan negotiations even today. The Democrats’ updated proposal includes funding for schools, small businesses, restaurants and airline companies. The plan targeted $ 75 billion in funding for coronavirus exams, contact tracking and isolation measures. The plan would also update the PayCheck Protection Program, including a second round of payments of USD 1,200 per taxpayer and USD 500 per dependent, and extending the unemployment payment of USD 600 per week until January 2021. The plan also aims to offer USD 436 billion to state, local, territorial and tribal governments to pay for rescuers and health professionals.

Today will be published the sentiment of the industrial manager in Europe and the USA, the expenses and revenues of the Americans and, as every Thursday, the data related to the distribution of unemployment claims in the USA, a thermometer that measures the pace of recovery of the economy and the expectation of purchase power increase, among other less relevant information.

The market is already preparing for the disclosure of the payroll for the month of September, which takes place tomorrow, the first Friday of October.

The D1 Stoch index continues on its way to the overbought position.

News:

Today several data on jobs and purchasing power in the USA were released.

This year, 2,082 million jobs were extinguished and 2,673 million were created, creating a surplus of 591 thousand jobs in the USA. US-based employers announced 118,804 thousand job cuts and 929,860 hires in September 2020. The volume of layoffs in September is 2.6% higher than in August 2020. Among sectors, bars, restaurants, hotels and parks entertainment cut 32,099 positions; the aerospace / defense industry 18,971; and the transport sector 16,628.

Last week, which ended on September 26, the number of Americans applying for unemployment insurance increased by 837,000, just below market expectations of 850,000. It was the fifth consecutive week at the level of 800 thousand, signaling a slowdown in the recovery of the labor market. Since mid-March, when the coronavirus pandemic hit the United States, nearly 63 million people have applied for unemployment insurance.

Also in the USA, personal income fell 2.7% in August 2020 compared to the previous month. The decrease in personal income in August, as well as in September, is explained by the decrease in the value of unemployment insurance, which provided a supplementary weekly payment of USD 600 until July 31 and has fallen to USD 300 since then. Government wages and salaries disbursements increased by $ 17.5 billion in August, after an increase of $ 14.5 billion in July, through temporary hiring of people working on the census.

Personal consumption in the USA increased by 1% in August 2020 compared to July, reflecting higher spending on food and accommodation services, and health care, where hospital and outpatient services increased. In contrast, the amount spent on consumer goods decreased, mainly on food and beverages purchased for consumption outside the establishment.

Facing this scenario, future business in the US tried to start the last quarter of the year positivly this Thursday. On the last day of September, the Dow Jones closed at 329 points, up 1.2%. The S&P 500 ended at 3,363 points, up 0.8%. The Nasdaq closed at 11,168, up 0.7%.

In Europe, a survey confirmed that the eurozone manufacturing sector achieved the highest monthly growth in September since August 2018. The IHS Markit Eurozone Manufacturing PMI increased to 53.7 in September 2020, mainly due to the resurgence of exports. At the same time, the rate of layoffs has slowed to the lowest observed in the past seven months, while backlogs have increased. In relation to prices, input prices were slightly higher overall, while product taxes fell for the fifteenth consecutive month. Finally, the expectation reached its highest level since April 2018.

Analysis:

While the number of people infected with coronavirus worldwide reaches almost 34 million, of which at least 1 million have died, markets are experiencing a period of fear regarding the resumption of a strong wave of infections that would lead to the closing of business and consequent economic stagnation. In the last 24 hours, in the USA, the current epicenter of the disease, 42.8 thousand people contracted COVID-19 (7.23 million so far), India registered 86.8 thousand new cases (6.31 million in total), and Brazil, 33.4 thousand (4.81 million in total). In Europe, a second wave of infections continues to affect several countries, in particular Spain, France, the United Kingdom and Germany. In terms of fatalities, the USA and Brazil continued to lead with a total of over 206 thousand and 143 thousand people, respectively. India has the third highest number of deaths in the world, with 98.6 thousand, followed by Mexico (77.6 thousand) and the United Kingdom (42.1 thousand).

On the eve of the September Payroll release, investors are betting on more fiscal stimulus, through the Democrats proposed package that will be negotiated with Republicans, especially now that data has shown that the recovery in the US labor market is cooling. Given the statistics and forecasts already released, Payroll is likely to show little difference in relation to market expectations. In this case, following the logic of “buy the rumor, sell the fact”, investors are building positions today in DXY, causing the asset to fluctuate considerably, as shown in the graph below:

According to Credit Suisse, EURUSD is approaching what appears to be a tougher resistance at 1.1764 and extending to 1.1804 (last 55-day average), with a downward trend since the peak at the beginning of September and a 38.2% decline from the September drop: “We hope this is an ideal limit for maintaining the top and the risk of falling again. Support is seen initially at 1.1709, then at 1.1693, with a break below 1.1665 / 61 needed to reaffirm a bearish tone again with support then seen at 1.1642 before the recent 1.1598 low with 1.1495 / 85″.

Looking at the latest payroll disclosures for August 2020, the market was frustrated when it expected 1400K and the result was 1371 thousand. However, given the disclosure, the asset fell only 0.02%.

In June, the result of 4800K was much better than expected, of 3000K. On July 2, when this news was released, DXY closed neutral.

Analyzing the past, the view of Credit Suisse and the current scenario, I believe that the trend for tomorrow is a slight devaluation of the DXY, and consequent appreciation of the EURUSD, with a lot of liquidity in the market, through the realization of the positions set up this week. From the current level of 1.1745, it is possible that the EURUSD will come close to USD 1.18 tomorrow and then correct it back to close to USD 1.175.

Calendar:

Last day of September, the euro is trading around USD 1.17 this Wednesday after European Central Bank President Christine Lagarde signaled a change in the ECB’s strategy to align it with the of the US Federal Reserve, which is likely to allow the rate to rise without the institution intervening. The reason for that isinflation data for Europe’s biggest economies is weaker than expected in September, raising concerns about the pace of economic recovery amid the coronavirus pandemic. At the same time, the dollar is gaining value as investors, worried about the risk, digest the debate between Donald Trump and Joe Biden, candidates for the presidency of the United States, which happened last night.

The D1 Stoch index remains right in the middle of the bands, on the way to overbought position.

News:

The United States economy shrank by 32.9% in the second quarter of 2020. This figure is practically in line with market projections and mainly reflects higher personal consumption expenses (PCE) and low exports and non-residential fixed investment. Still, it remains the biggest contraction of all time, as shown in the graph below, taking the economy into a recession while the coronavirus pandemic has forced many businesses, especially restaurants, cafes, stores and factories to close and people to stay home, decreasing consumer and business spending. “The outlook is not very good,” says Sung Won Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles, to Reuters. “Americans are not behaving well in terms of social distance, the infection rate is unacceptably high and that means that economic growth cannot gain momentum.” This data is a first estimate, and will undergo two revisions in the coming months.

Analysis:

Looking at the behavior of the EURUSD price this week, we realize that today the asset is correcting the gains obtained so far. The pair started the week at USD 1.1618, closed the day yesterday at 1.1741 and today trades lower, around 1.1700. However, the EURUSD pair started the month at 1.1955. Without news about the vaccine against COVID-19, without a clear definition of the election in the USA, without the approval of a strong economic stimulus package for the American economy, it is possible that the EURUSD pair will continue to fluctuate considerably, as investors oscillate between the need for liquidity and security.

News about the ECB’s decisions and the presidential debate can even drive some price moves in the ForEx market, but the it is really subject to normal fluctuation today.

Calendar:

This week is starting expecting further appreciation of the DXY and consequent drop in the EURUSD. The perception that the pandemic was under control in the Eurozone no longer exists and the Brexit negotiations going badly are making investors seek USD security:

The ECB President will make a statement today to the European Parliament’s Economic Committee and the market is monitoring any clues about possible economic stimuli.

This Tuesday takes place the first debate between the 2 candidates for the presidency of the USA, Donald Trump and Joe Biden. Questions about Trump’s tax situation should fuel the debate, as lawyers point out accounting maneuvers between companies and Trump’s individual reports to avoid paying taxes

Hopes for a stimulus package for the US economy soared after House Speaker Nancy Pelosi said yesterday that an agreement could be reached soon with the White House and in the face of rumors that Democrats would be open to lessen the value of their proposal to reach an agreement with Republicans.

The last round of negotiations between the UK and the European Union on BREXIT begins tomorrow, with key negotiators Michel Barnier and David Frost meeting next Friday. Both sides are under strong pressure to reach an agreement, given the economic needs of the entire area.

The past few months have been challenging for the British. Prime Minister Boris Johnson is being accused of jeopardizing the agreement with the European Union and of taking the country to the position of the most punished by the coronavirus in Europe, with almost 42 thousand deaths. According to UK Finance Minister Rishi Sunak, the government is about to launch an employment protection plan. Despite the clear need for this plan, it is possible that its approval will encounter strong resistance, since opposition to Boris Johnson’s management is growing stronger.

The D1 Stoch index continues to show that the market is oversold even with the euro at USD 1.167. Lateralized market, but with good opportunities, with Stoch pointing to overbought on several opportunities in M5.

News:

Chinese industries’ profit jumped 19% in August, for the fourth consecutive month of high and the country’s central bank will inject the equivalent of US $ 3 million into the economy, via securities repurchase. The scenario boosted US indices after negative four straight weeks.

Calendar:

This past week had few important facts but lots of concerns about both a second wave of coronavirus infections and the pace of economic recovery around the world, which made investors rush for security. The USD continues to maintain the level of 94.5 thousand points, in the process of registering a gain of 1.5% for a week, EURUSD testing a slight recovery, within the range of USD 1.16, as shown in the graph below:

The D1 Stoch index shows that the market is oversold in euro at $ 1,163. Market moving laterally, but with good opportunities within the 1,163 to 1,164 range. During the week, the EURUSD pair had two consecutive daily closings below the main Fibo and Murray patterns:

The D1 Stoch index shows that the market is oversold in euro at $ 1,163. Market moving laterally, but with good opportunities within the 1,163 to 1,164 range. During the week, the EURUSD pair had two consecutive daily closings below the main Fibo and Murray patterns:

US and European futures stocks are going down this week, amid risk concerns. In Europe, the Stoxx 600 index fell 1%. Automotive and travel and leisure companies led the decline, with losses of 2.1% and 1.6%, respectively, with Lufthansa AG, Ryanair Holdings Plc and IAG among the biggest declines.

News:

With a less peaceful tone than that of the ECB, several senior FED members, including Chairman Jerome Powell, asked the US government to provide more fiscal support, warning that otherwise a slowdown in the economic recovery will take place. The need for fiscal incentives is becoming increasingly relevant, however, the proximity of the presidential elections in the USA is making it difficult. Goldman Sachs and JPMorgan reduced their US growth forecast for the fourth quarter.

This week the current president and candidate for re-election, Donald Trump, refused a peaceful transfer of power, if his opponent, Democrat Joe Biden wins the election (Republican lawmakers promised to make a presidential transition without interruption, in a rebuke to Trump). In addition, Trump is pressuring the Senate to approve his Supreme Court candidate as soon as possible, because he believes that the Court will have to decide on an election outcome. This indicates that the Legislative and Executive branches have other priorities in the coming months, other than the fiscal stimulus package to recover the economy from the coronavirus pandemic.

There are rumors about Democratic lawmakers to be drafting a $ 2.3 trillion stimulus proposalt, lowering its initial $ 3 trillion suggestion and approaching the Republicans’ proposal.

Still in the US, new orders for durable goods increased 0.4% month-on-month in August 2020, below market forecast for a 1.5% increase. Still, it was the fourth consecutive month of growth in orders, as the economy recovers from the coronavirus. Transport (0.5%), machinery (1.5%) and computers and electronics (1.2%) led the increase, while orders for electrical equipment and appliances (-1.5%), motor vehicles (-21, 7%) and defense capital goods (-3.3%) shrank. Orders for non-defense capital goods, excluding aircraft, increased 1.8%, down from 2.5% in July, but above 0.5% proposals. This volume is an important indicator to show how much companies are preparing to increase their productive capacity.

In France, the number of people without work fell by 171.0 thousand in relation to the previous month, to 3.622 million in August 2020, as the labor market continues to recover from the pandemic. In comparison with the same month of the previous year, the number of people registered as unemployed increased by 263.0 thousand.

More than 32.2 million people have been infected with the coronavirus worldwide, of which at least 983,000 people have died and 22.2 million have recovered, according to Johns Hopkins University. In Europe, a second wave of infections continues to hit several countries, putting pressure on hospitals. Among the most affected countries, France reported more than 12,000 new cases, followed by Spain (+10,653), the United Kingdom (+6,634) and Germany (+2,153). The USA and India continued to lead with a total of more than 6.9 million and 5.8 million, respectively. Brazil has the third largest number of confirmed coronavirus infections in the world, with more than 4.6 million. Italy, which has been protected from the second wave so far, has reported 1,786 new cases (against 1,640 the previous day) and is slowly increasing. Meanwhile, Poland (1,136), France (16,096) and the United Kingdom (6,648) recorded one-day increases in new cases, albeit with a much higher level of testing than during the first wave. In the US, weekly cases have increased to over 300,000 again, after falling below that level in late August. The country may be seeing the start of another round of infections. Officials across Europe warn of difficult times ahead.

Analysis:

The $ 10 trillion corporate bond market is under pressure. In the last two times this has happened, the FED has announced a new monetary policy, leading investors to believe that the institution is about to intervene.

Or would the Institution let this bubble burst? The Fed and the US government are caught in a vicious cycle by which they create bubbles and then deal with their consequences. We had the technology bubble in the 90s. The housing bubble in the mid-2000s. And now, the bubble of everything in 2020. Everything indicates that won´t be this time the FED will let the bubble burst.

This intervention should inject more dollars into the economy, which would make the EURDXY pair gain value, especially in the short term.

Calendar:

News week, with USD recovering, returning to the level of 94 thousand points, EURUSD at the level of 1.16, as shown in the graph below:

This week, several senior members of the EDF, including President Jerome Powell, asked the US government US to provide more fiscal support, warning that otherwise a slowdown in the economic recovery will happen. Everyone knows, however, that a new stimulus project will not be approved before the presidential election, that happens in early November.

Among the data released in the last few days, the mood of German business has been weaker than expected in September, while France’s industrial pace exceeded forecasts.

News:

Sales of new homes in the United States increased 4.8% in August 2020 compared to the month immediately previous year, reaching 1,011 thousand units in the period, surprising the market, which anticipated a drop in this comparison, with an estimate of 895 thousand new units in the period. New home sales exceeded 1 million by first time since September 2006, as the housing market continues to recover from the pandemic, motivated by very low interest rates and increased demand, as many people are choosing to move out of the big cities. Sales of new homes increased 13.4% in the South (636 thousand) and 5% in the Northeast (42 thousand), but fell 21.4% in the Midwest (99 thousand) after an increase of 59.5% in July, and 1.7% in the West (234 thousand). The average selling price per unit it dropped to $ 369,000 from $ 392,700 a year earlier. The number of new houses for sale available on the market fell 3.1%, to 282 thousand units.

While the market expected 840, 870,000 Americans applied for unemployment insurance in the week ended 19 September 2020, keeping this volume below 1 million in the last 2 weeks, a sign that the work is slowly recovering from the coronavirus pandemic. However, the number remained well above 665 thousand registered in March 2009, the worst period of the great recession caused by the financial crisis of 2008-2009, suggesting that the labor market recovery has stalled as government support has waned. The moving average week, which removes week-to-week volatility, was 878,250, a decrease of 35,250 from the revised average from the previous week. Continued benefits fell to 12,580,000, a decrease of 167,000 from the level released the previous week.

Analysis:

Faced with this scenario, in which FED authorities indicate a slowdown in the economic recovery and the need for more fiscal support in the U.S., and also where the number of coronavirus infections remains high worldwide, increasing the risk of another set of blockages in Europe, investors are looking for more investment insurance, like the dollar. The USD reached today the highest value in the last 2 months, 94.6.

Gold continues to fall, trading near $ 1,855 an ounce on Thursday. At the start of the session, gold it reached $ 1,849 an ounce, a level not seen since July 22.

The silver accompanies, being traded around $ 22 an ounce this Thursday. At the start of the session, the ounce value reached $ 21.65 an ounce, a level not seen since July 22.

The US listed stocks are operating down on Thursday. The Dow Jones dropped more than 150 points, the S&P 500 more than 15, I reach the lowest value of the last 7 weeks (3,223 points).

European equities are also down on Thursday, with the DAX 30 falling 0.2%.

Calendar:

Today, the decisions taken at the FOMC (FED’s monetary policy committee) meeting, held yesterday will be released.

Today, retail sales in the USA are also disclosed.

Now, the focus of the market is on the Bank of England policy-setting meeting, which is due to be completed tomorrow. Market expectations won´t change, but the division of votes and the minutes of the meeting will be carefully studied to give an idea of the bank’s intentions in the future, given the economic challenges facing the UK.

News:

US retail sales increased 0.6% in August 2020 compared to the previous month, below market forecasts for a 1% increase. Sales increased more in food and beverage services (4.7%), clothing (2.9%), furniture (2.1%) and construction materials and garden equipment (2%). Gas station sales increased 0.4% and that of automobiles, 0.2%. Declines were observed in sales in department stores (-2.3%), supermarkets (-1.6%), sporting goods, hobby and music (-5.7%). Retail sales, which correspond more closely to the consumer spending component of GDP, fell 0.1%. The reduction in the value of unemployment insurance checks probably weighed on the pace of recovery in consumption in the USA.

At its meeting, FED´s FOMC decided to keep the basic rate of the American economy close to zero (0 to 0.25% per year) until at least the end of 2023 to help the economy recover from the coronavirus pandemic, which was widely expected. However, the Institution showed optimism regarding the impact of the pandemic on the American economy in 2020, raising its forecast of GDP contraction to a 3.7% drop, compared to a previous estimate of a 6.5% drop, based upon employment and inflation improving. On the other hand, these estimates worsened for the years 2021 and 2022, to 4% and 3%, to 5% and 3.5%, respectively. The unemployment rate is expected to rise to 7.6% this year (at the June meeting the estimate was 9.3%) and drop to 5.5% in 2021 (6.5% was expected in June).

The FOMC’s strategy is to achieve inflation moderately above 2% for some time, so that average inflation is 2% over time and long-term inflation expectations remain well anchored at 2%. The votes were 8 to 2, with the Dallas FED chairman preferring to maintain “greater interest rate flexibility”, and the Minneapolis FED chairman in favor of waiting for rate hikes until “core inflation reaches 2% sustainably. “

The US NAHB housing market index jumped 5 points to 83 in September 2020, exceeding market forecasts of 78. It is the highest reading ever recorded, as low interest rates for real estate financing continue to drive demand for new houses and many people are moving from big cities in this pandemic period. The current sub-index of single family increased to 88 from 84 in August and that of potential buyers increased from 64 to 73. In addition, the indicator of home sales in the following six months rose from 78 to 84 in the previous month.

The OECD (Organization for Economic Cooperation and Development) pointed that the world economy could shrink by 4.5% in 2020, improving its outlook from the June forecast, which was a 6% contraction. US GDP is expected to fall 3.8% in 2020, while the eurozone is expected to contract 7.9% and Britain’s GDP is expected to fall 10.1%. China is likely to grow only 1.8%, while India’s GDP is expected to fall 10.2%. The OECD expects the global economy to recover 5.0% in 2021, but warns that world production will still be below the levels at the end of 2019.

Analysis:

The fall in the value of DXY since the end of May 2020 is a reflection of FED´s low interest policy practiced by the. Investors are coming out of the currency looking for higher yields on other assets.

News of economic activity in the US recovering faster than expected, at least in 2020, raises expectations that values above 93,000 points in the DXY will be nothing more than a short-term phenomenon. The asset is expected to fluctuate between 90,000 and 93,000 points, causing the EURUSD to fluctuate between $ 1,170 and $ 1,190. The FED’s struggle to maintain positive inflation involves maintaining DXY at this level of devaluation, which increases its exports and makes imports more expensive, generating jobs domestically.

In the coming weeks, news about the US presidential election and Brexit negotiations could move asset values, with an upward trend towards the DXY, as the dollar is close to its lowest level in 16 months. Net future bets on a lower dollar totaled $ 32.67 billion, according to the latest data from the Commodity Futures Trading Commission.

Uncertainty about the American elections, in which the results may be uncertain or even contested, can lead investors to sell their riskiest investments and head for safer assets, such as the US dollar. The greater the uncertainty regarding the elections, the more the dollar tends to appreciate. Still on the elections, the leadership of current President Donald Trump values DXY, as he shows less appetite for fiscal expansion and more likely to muddle markets with a hard line towards China. If your opponent, Joe Biden takes the lead in the polls, DXY should devalue itself.

Calendar:

Today starts the FOMC meeting, FED´s monetary policy committee, the last one before the US presidential elections, which takes place on November 4, 2020. Market is waiting for even more accommodative measures aimed at accelerating the recovery of the US economy in the post-pandemic coronavirus disease, especially after US Treasury Secretary Steven Mnuchin said yesterday that there are “clearly” areas of the US economy, especially in the tourism sector (travel, entertainment, hotels, etc.), small businesses and restaurants, which still need support, and that fear of increasing the national debt should not prevent Congress from passing another stimulus bill.

The FOMC reduced the basic interest rate to almost zero at the start of the pandemic and announced that there would be
no hikes until the economy was “on the right track” to meet the FED targets (maximum employment and price stability).
Analysts already question this strategy and expect FED to readjust that decision, although, do not believe it will happen this
meeting, as officers have minimized any sense of urgency in making such a decision in recent public comments.

When the last set of projections was released in June, the report showed that all but 2 of the 17 FOMC members expected to keep rates close to zero until the end of 2022. The projections to be released tomorrow will extend the forecast horizon by the end of 2023, which does not seem to be enough for the market to trust the results projected by the FED. “We have to forecast five to ten years ahead if we want to talk about average inflation targets,” said Andrew Levin, a former FED economist who participated in the development of projections in the Ben Bernanke and Janet Yellen administrations, and is now a professor at Dartmouth College. The crucial question is: what is the FED’s long-term plan?

EURUSD started the day higher, starting at USD $ 1.1870 and coming very close to USD $ 1.19. With the market opening in Europe, the price fell to the range of USD $ 1,188. The expectation is that it will fall even further in the opening of the operation in the USA, as investors should appreciate the dollar against the euro awaiting the stimulus measures that should be announced by the FED tomorrow.

The dollar remained under pressure on Tuesday, with risk appetite returning to markets amid hopes for a coronavirus vaccine and major corporate deals in the U.S. The US dollar hit a 28-month low of 92.144 on August 31, but has since gone up amid growing optimism about the US economic recovery.

This morning, data on industrial production in the USA will be released.

News:

As shown in the graph below, the ZEW Indicator (which measures market expectations for the next 6 months, through a survey made with about 350 German institutional investors and analysts) for Germany, in September 2020, rose 5, 9 points compared to the previous month, to 77.4, exceeding market estimates of 69.8. Good news about the recovery of the economy in Europe after several days of pessimism in the market.

For the Euro Area, this same ZEW indicator increased 9.9 points over the previous month to 73.9 in September 2020, the highest reading since February 2004. In September, 77.9% of analysts surveyed predicted an improvement in economic activity, while 4% expected it to worsen and 18.1% did not expect changes.

The mood is positive today, despite Brexit negotiations stalled and COVID-19 cases rising. However, the banking sector has shown fears of an increasing number of loan defaults in the next six months.

The price of gold reached its highest value in almost two weeks (US $ 1,969 an ounce) and that of silver continues to rise (above US $ 27 an ounce) this Tuesday, with the dollar repressed, while investors await the result of the FED meeting, and the continued increase in coronavirus cases worldwide.

Analysis:

Despite all the recent volatility in the ForEx markets, there are still many opportunities for profits for traders, especially in very short-term operations, those that ignore the news and analyze only the movement of the candles.

The chart below shows how many pips the EURUSD pair has traded daily in the last 12 months. In the last 10 weeks, there were 88 pips on average per day. This means that with 10,000 euros deposited, it would be possible to make US $ 880 a day. Discounting 15% income tax, it would still be possible to make more than USD 3.7 thousand in a week or USD 16.5 thousand in a month.

In order to take full advantage of these opportunities, one of the things the trader must do is to monitor the level of aggression in the market.

While small investors support their operations in charts, indicators and fundamentalist analysis concepts, which uses the past as a basis, large institutions make their decisions always looking to the future. The structure of a large institution guarantees its ability to estimate more assertively the variables that will impact assets value in the future. Small investors Página 3 should accept and work with this “disadvantage” in accessing information. It is by monitoring the “aggression” of the market that the small investor will have evidence of the performance of the big players.

As these institutions demand immediate execution and they usually have a high volume to execute, they use “aggression” to form their positions in the market. The greater the amount taken, the greater the signal that there is an urgency to execute and if there is an urgency to execute there are indications of information accessible to institutions but not to small investors.

There are tools that show all the deals that took place on a certain asset throughout the day. It´s possible to see exactly these aggressions through it, as in the example below:

However, traders must always monitor factors such as interest rates, trade and tourism flows, economic strength and geopolitical risk, which affect the supply and demand for currencies.

Calendar:

The FOMC, FED´s monetary policy committee, will meet this week. Investors are waiting for even more accommodative measures aimed at the recovery of the American economy in post-pandemic times.

News:

Albert Bourla, CEO of the Swiss pharmaceutical Pfizer, said last weekend that the vaccine the company is developing against the coronavirus could be available for distribution in the U.S. by the end of this year. According to Bourla, phase 3 of the drug test would be completed by October. However, this same Bourla said recently that there is no guarantee about the longevity of immunity: efficacy and supply still are important challenges. On efficacy, Pfizer must monitor 70,000 trial participants for at least two years to assess immunity and determine whether people need extra doses of the vaccine. On supply, large parts of Africa, South America and Asia will not be able to receive volumes of the vaccine due to the lack of logistical capacity with an adequate refrigerated chain.

Anglo-Swedish pharmaceutical company AstraZeneca, which is also developing a coronavirus vaccine, in partnership with the University of Oxford, received approval from UK authorities last weekend to resume the phase 3 trial of its vaccine.

Phase 3 is the last stage of the vaccine development process. It carries out large-scale tests to assure the safety and efficacy of the product on the target audience.

The CEO of Serum Initiative of India, the world’s largest vaccine manufacturer, warned that, given the production capacity available for the vaccine, 20% of the countries in the world would be immunized by the end of 2021 and only in 2024 would all those in risk groups for COVI-19 will be immunized.

In July 2020, eurozone industrial production increased 4.1% over the previous month, as the bloc’s economy continued to recover from the pandemic. Production increased for capital goods (5.3%), durable consumer goods (4.7%), intermediate goods (4.2%), non-durable consumer goods (3.9%) and energy (1, 1%). Compared to July 2019, industrial production contracted 7.7%. The numbers are similar to market expectations

Calendar:

Many inflation disclosures today (Germany, UK, Spain, USA). Investors continue to digest the decisions of the European Central Bank, released yesterday indicating that the Institution will not act to insure the appreciation of the euro. For this week, the euro is likely to end up practically stable.

Next week, the FED holds its last meeting before the US presidential election, and while everyone expects it to remain dovish, it may not deliver everything investors want.

News:

Continuing the tension mood between the US and China, President Trump decided to ban the TikTok app in the country, which belongs to the Chinese company ByteDance, reaffirming that they have until September 15 to sell their operations in the US to an American company, as Microsoft, or it will no longer be allowed to operate in its territory. Trump is calling it a security issue as the video app is accused of sharing data with the Beijing government (the company denies the charges). TikTok, which has more than 80 million users in the US, is one of the most popular social medias at the moment. The Chinese Foreign Ministry opposes the forced sale of TikTok, an operation that, they believe, violates the principles of the World Trade Organization (WTO). However, ByteDance said today that it plans to move its headquarters to Singapore and invest billions of dollars there over the next three years, in what appears to be an effort to prevent these changes in the U.S.

India has already blocked TikTok and other Chinese apps. Australia, which has already banned Chinese technology company Huawei and telecommunications equipment maker ZTE, is also considering banning TikTok.

In Europe, in contrast to the peaceful tone used by ECB President Christine Lagarde yesterday, the Institution’s chief economist Philip Lane said that he is concerned about the strength of the euro and its consequent impact on European inflation: “The Governing Council is ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards the target in a sustained manner.” The euro dropped with this news before rising again in the late morning in Europe.

The ECB President’s optimistic tone and her lack of direct action to slow the euro surprised many analysts, but were consistent with a modest upward revision of the ECB’s growth forecast for this year. For the investors, this contradiction between her and Lane is enough to speculate a lack of direction in the ECB’s decisions and generate more volatility in the ForEx market.

As much as Lagarde remains faithful to what was agreed, it is inevitable that she is under a lot of pressure. If, on the other side of the ocean, the FED remains dovish (inclined to offer more and more stimulus), other authorities, in particular the ECB, will have to use a more accommodative policy as a way to contain the appreciation of their currencies against the dollar.

Analysis:

In anticipation of the FED meeting, which takes place next Wednesday, September 16, the market is expected to operate with considerable volatility next week. According to the “buy the rumor, sell the fact” rule, investors must bet on strong stimulus from the FED, which would favor the dollar against the euro, at least until Wednesday, when, probably, the FED will come with a policy still dovish but not so aggressive, disappointing the market, since the American economy is already showing signs of a good recovery pace. On Wednesday, with the release of the FED decision, the dollar is likely to reverse the week’s gains, and will move back to 93,000 points between Thursday and Friday.

For the coming weeks, the ForEx market is expected to follow news about the US election, which includes the potential conflict with China, Brexit negotiations, economic data from European countries and possible coronavirus vaccines.

Calendar:

Investors have their eyes and ears on the results of the European Central Bank meeting. Speech by the President of the Institution Christine Lagarde started around 9:30 am, BSB time, causing the euro to skyrocket, being traded close to USD 1.19 (“buy the rumour, sell the fact”).

This afternoon, weekly US unemployment insurance claims will be released, and the Republican-controlled Senate votes on a stimulus package.

News:

At the meeting held today, the European Central Bank decided to keep the interest rate at 0% and the commitment to buy up to € 1.35 trillion in debt securities until June 2021 (flexible as to type of assets, country and duration), within the scope of the Pandemic Emergency Purchase Program (PEPP). On June 4, 2020, the ECB increased this program, which was € 750 billion, by € 600 billion.

The ECB today also released new projections for the Eurozone economy, as shown in the graph below:

Through these small changes, the bank shows that it is unnecessary to increase the stimuli already used for the economic recovery of the Euro Area.

On the strong appreciation of the euro against the dollar, especially since May 2020, as shown in the graph below, ECB President Christine Lagarde said that the bank does not aim to maintain the exchange rate. The Institution’s focus is to maintain price stability (meaning inflation), which the bank does through fiscal and monetary, not exchange rate, policies. The appreciation of the euro reduces the competitiveness of European exporters on the international market and creates a deflationary effect on domestic prices. Even so, analysts are forecasting a further rise in the value of the euro, estimating that it will reach $ 1.25 in the coming months.

The US Senate was due to vote today on a fifth economic stimulus package for the coronavirus, which would allocate approximately $ 300 billion to renew federal unemployment insurance and establish new protections for companies against lawsuits filed during the pandemic, labeled by Democrats as a “poison pill”. However, the package was not approved.

This may be the latest news about the stimulus package for the American economy in 2020, as from now on, lawmakers will
likely focus on returning to their home states and starting the campaign for re-election.

Meanwhile, unemployment insurance claims have been below 1 million for two consecutive weeks, a sign that the job market is slowly recovering from the coronavirus pandemic.

Concerns about the conclusion of Brexit are growing among investors, as negotiations are heading into uncertain directions. In this scenario, the value of the GBP, in dollars, fell from USD $ 1,346 on 9/1/2020 to USD $ 1,275 today.

Analysis:

On September 1, 2020 – the day the euro peaked against the dollar – ECB board member and chief economist Philip Lane said that “the euro-dollar rate matters”, signaling for the market that the bank could change its performance in relation to the currency value. The euro promptly declined from its highs. Since then, the market has been looking forward to the ECB meeting, in the expectation that the Institution would start to inject money directly into the foreign exchange market.

The dollar has remained stable above the 93,000-point mark, supported by gains against the GBP and by the sell-off in the American stock market, especially in technology companies. Tesla, Apple, Microsoft, Amazon, Alphabet and Facebook, together, lost $ 1 trillion in market value between Monday and Wednesday this week, with investors pulling out of those stocks.

Meanwhile, the price of silver continues to hover around $ 27 an ounce, with an increase in purchase intentions, but limited by a stronger dollar. The price of gold is heading for the second consecutive weekly gain.

Calendar:

The Eurozone GDP was released today for the 2Q20, with a reduction of 11.8% in relation to the 1Q20 and 14.7% in relation to the same period in the previous year. The level of employment in the Euro Zone was also released, decreasing 2.9% in relation to the 1Q20 year and 3.1% in relation to the same period in the previous year. Were also released retail in Italy and Balance of Trade in France and Germany, all of them with numbers below market expectations, increasing the investors pessimism in relation to the pace of economic recovery in the European bloc. This week, investors are focused on the outcome of the European Central Bank meeting, which takes place this Thursday and should decide on the projections and the stimulus policy. Investors are also following the increase in tension between the US and China.

News:

The Eurozone economy shrank 11.8% in 2Q20 compared to 1Q20, slightly less than market estimates, which expected a drop of 12.1%. Still, it is the biggest contraction ever recorded. Household consumption dropped 12.4%, investment 17% and government spending 2.6%. Exports fell 18.8% and imports 18%. Among the biggest economies in the bloc, Spain recorded the biggest drop in economic activity (-18.5%), followed by France (-13.8%), Italy (-12.8%) and Germany (-9.7 %).

The number of people employed in the Eurozone decreased by 2.9% in 2Q20 compared to 1Q20. It is the biggest decline in the series, which started in 1995. Compared to the same period last year, employment decreased by 3.1%.

In July 2020, retail sales in Italy fell 7.20% in comparison to the same month of the previous year and 2.2% in relation to the immediately previous month. In the first scenario, the market estimated a decrease of 0.2% and, in the second, an increase of 5.1%.

The trade deficit in France was EUR 6.99 billion in July 2020, while the market estimated EUR 4.8 billion. Exports increased 9.6% over the previous month and are now at 83% of 2019 average level. Sales increased mainly in capital goods (21.3%), such as aeronautical equipment, telephones and communications equipment, and automobiles. Sales also increased for intermediate goods (4.3%) and consumer goods (3.7%). Imports increased 4.9% and are at 90% of 2019 average level. Purchases increased in investment goods (10.6%) and intermediate goods (5.7%) segments, but stopped in consumption.

Germany’s trade surplus fell to EUR 19.2 billion in July 2020, from EUR 21.3 billion in the same month last year. Exports fell 11%, due to the decrease in sales to the European Union (-10.7%), the United Kingdom (-12.6%), the USA (-17.0%) and China (-0.1%). Imports fell 11.3%, with purchases from the EU falling 13.1%, from the UK 24.8% and from the USA 14.8%. On the other hand, imports from China increased 7.4%. On a seasonally adjusted basis, exports increased 4.7% in July 2020 compared to July 2019, below market expectations of 5%, while imports increased 1.1%, also below market expectations of 3.3%.

Opening Data:

Analysis:

After the disclosure of Payroll, with figures that did little to encourage the market, added to unfavorable numbers about the European economic recovery, investors began to operate awaiting the decisions of governments regarding recovery packages, both in America and in Europe.

The next 2 months will bring even more volatility to the market due to the electoral dispute in the USA. Democrat Joe Biden, who is personally insignificant but carries the force of rejection to his opponent, the current president of the United States and candidate for re-election, Donald Trump.

Last night, Trump delivered a speech in which he promised to drastically reduce economic relations between the United States and China if re-elected: American companies would be punished if they sent jobs abroad and rewarded if they brought them back, aiming to make the USA the most powerful global industrial area. Trump also promised to break the partnership between the two countries’ armed forces. These promises are old and were already on Trump’s list of proposals when he ran for office 4 years ago. Throughout his term he put the relationship between the two countries on a tightrope but did nothing concrete. Has he now gathered the necessary context to carry out his campaign promises?

As in the last election, the unexpected can happen. Trump could be re-elected. Or not. By November 4, ForEx traders should be prepared to operate on dollar volatility, with caution, and a lot of cold blood.

Calendar:

Friday, PayRoll’s disclosure day, market waiting for numbers below the estimate. If the economy continues to create jobs at an average rate of 1.5 million per month, as it has been, it will take at least another 8 months to complete the recovery and return to the level of February 2020. Investors are also concerned with the difficult negotiations between Democrats and Republicans to launch a new recovery package for entrepreneurs and individuals.

This week is ending with pessimism regarding the economic recovery in Europe, with data showing the sixth consecutive month of contraction in the construction sector.

The bias at this point is pessimistic for both EUR and USD, increasing market volatility and valuing gold and silver. The postpandemic economic recovery is likely to take place in both America and Europe. There are more risks in the USA but Europe is more conservatism.

The market continues to price the EUR close to USD $ 1.18 awaiting the US government’s economic recovery package.

News:

The IHS Markit Eurozone Construction PMI, an index that indicates the sentiment of purchasing managers in the construction sector, or the trend for this market, fell to 47.8 in August 2020. This is the sector’s 6th consecutive contraction and the more pronounced in three months. The production of commercial buildings recorded the greatest reduction. The moderate growth in housing construction in Germany and Italy was insufficient to offset the decline in France. In the sector as a whole, the number of jobs was reduced, input price inflation has intensified and general sentiment among European construction companies is negative.

Order entry for Germany’s industry increased 2.8% in July 2020 compared to the previous month. However, orders in July were 8.2% lower than in February, before restrictions were imposed. By category, the demand was higher for intermediate goods (9.5%) and consumer goods (0.2%), while the demand for capital goods decreased (-0.4%). In the automotive industry, orders increased 8.5% in July compared to June, but were still 2.4% lower than in February. Year-onyear, order entry for German industry fell 7.3% in July 2020.

In the US, Payroll data showed that the pandemic is still far from being under control and many companies have not even started to expand their workforce, maintaining lay-offs. In addition, large companies like United Airlines, American Airlines and Ford have announced job cuts. 1.371 million non-agricultural jobs were created in August 2020, down from the 1.734 million created in the previous month, and slightly below the market forecast of 1.4 million. There are still 11.5 million vacancies to reach the pre-pandemic level, since more than 22 million jobs were lost between March and April. Among the sectors that created more jobs in August are the public sector (344K), largely reflecting the temporary hiring for the 2020 Census, retail (249K), services (197k), entertainment / leisure (174K), education and health (147K), transport and storage (78K), financial activities (36K) and industry (29K).

The US unemployment rate fell to 8.4% in August 2020, totaling 13.6 million unemployed, still above 3.5% in February, before the pandemic hit the economy, but below the peak of the global financial crisis of 2008/2009, when it reached 10%. Considering the way the survey is conducted, these numbers may be far from reality, as many people are being classified as employees, although they are away from work.

Opening Data:

The USD rose about 0.4% this week, its biggest weekly increase in almost four months, due to optimistic data about the US economy. The EUR has been oscillating near its lowest level since August 27, amid concerns about the eurozone’s economic recovery.

Analysis:

Recent releases showed that economic recovery in both America and Europe, should take at least 1 year to return to February levels, when restrictions imposed by the pandemic started. In this scenario, the valuation of asset values should consider more than just numbers.

While the economic packages are holding back the financial market, which is supporting companies and individuals to survive the crisis, some facts are frightening. It is expected that more than 50 million Americans will fight hunger by the end of this year, out of the 330 million people who live in the United States, this means 15% of the population. Those who are not eating will not be consuming, nor will honor their debts.

According to a survey commissioned by the European Parliament between 23 April and 1 May 2020, 58% of the population in Europe is facing economic difficulties due to the restrictions imposed by the pandemic. Among the problems reported are income decrease (mentioned by 30% of respondents), total or partial unemployment (23%), use of personal savings ahead of schedule (21%), difficulties in paying rent, invoices or loans (14 %) and complications to have a “decent” diet (9%). One in ten respondents said they had to ask financial help from relatives or friends, while 3% said they went bankrupt. Respondents from Hungary, Bulgaria, Greece, Italy and Spain were the ones who had the most financial problems, while those from Denmark, the Netherlands, Sweden, Finland and Austria were the least affected.

This adverse situation contributed to increase the demand for precious metals as a safer investment. It is possible that a wealth transfer will occur if investors decide to move out of speculative financial bubbles to solid real assets, and precious metals are the highest quality solid assets on the market, as are gold and silver.

The graph below shows the behavior of the silver price in the last 5 years, in USD. Between February 20 and March 19, 2020, the price of silver fell sharply, as at this moment the market was looking for liquidity, and this metal is really not the best option for this purpose. However, facing the concerns with the post-pandemic economic recovery, the market’s attention turned to this type of investment and the silver price skyrocketed.

Silver is much cheaper than gold (approximately US $ 25 against US $ 1,900 an ounce) easing the investments into this commodity. On the other hand, the gold market is much larger than that of silver (annual gold supply is estimated to be five times greater than silver).

The industrial demand for silver tends to increase too, mainly with the increase of renewable energy sources, which relies on batteries for its daily use. There is even evidence that the rapid increase in the silver price is due to physical purchase, not financial speculation. There was a downward trend of the commercial net short position, as the price continued to rise. Typically, in the past, when the silver price increased, speculators increased their net short position.

While gold has already broken value records this year, exceeding $ 2,000, the price of silver is still only halfway to its record of more than $ 48 in April 2011, offering opportunity for profits while the uncertainty of economic recovery lasts

Calendar:

Thursday, with disclosure of weekly initial claims and Trade Balance for the United States. In Europe, disclosure of general Markit and retail sales. Market is waiting for PayRoll’s release this Friday.

News:

Eurozone retail sales fell 1.3% in July 2020 compared to the previous month, disappointing the market, which expected 1.5% growth. In this comparison, sales of non-food products fell 2.9% due to the lower trade in textiles, clothing, footwear (- 10.6%), computer equipment, books and others (-6.7%), pharmaceuticals and medical products (-1.7%) and electrical and mobile products (-1.6%). E-commerce contracted 7.7%. Meanwhile, sales of food, beverages and tobacco remained unchanged, while fuel sales increased 4.3%.

The French government announced a € 100 billion stimulus package that will be 40% financed by the European Union Recovery Fund. This package aims to reduce corporate taxes by more than 20 billion euros over the next 10 years, one of the central policies by which Macron was elected in 2017, but has not been able to carry out.

In the United States, ADP’s National Employment Report released yesterday showed that 428,000 jobs were created in the private sector in August 2020. This indicator measures employment levels in the non-agricultural private sector, based on actual payroll data for around 24 million employees, processed by Automatic Data Processing, Inc. Despite being below the median of economists’ projections, which expected 1 million new jobs, this data began to show post-pandemic recovery.

The Challenger Job-Cut report, which provides monthly information on the number of layoffs in the private sector, was released this morning pointing to 115,762 cuts in August 2020 in the U.S. This is the highest number for the month of August since 2002. Among the most affected sectors are transportation (26,545), especially the airlines, and entertainment / leisure (17,271), including bars, restaurants, hotels and amusement parks. Considering the first eight months of the year, there were 1.963 million job-cuts.

The number of Americans applying for unemployment insurance for the first time, however, dropped to 881 thousand in the week ending August 29, the lowest level since the effects of the pandemic began to be felt and below market expectations of 950 thousand.

America’s July 2020 trade balance release pointed to a $ 63.6 billion trade deficit, above market projections of a $ 58 billion deficit. Exports and imports increased in July, but remained below pre-pandemic levels, as many companies continued to operate with limited capacity or ceased operations altogether. July exports were $ 168.1 billion, $ 12.6 billion above June. July imports were $ 231.7 billion, $ 22.7 billion more in the same comparison.

Opening Data:

The euro widened its losses to $ 1.183 this Thursday after crossing the $ 1.20 mark on Tuesday for the first time since May 2018, amid concerns about the eurozone’s economic recovery, after data showed that retail sales across the block fell unexpectedly in July. At the same time, demand for the USD has increased due to optimistic data on the recovery of the US economy. All eyes will be on the ECB policy meeting next week, as markets are still waiting for more stimulus before the end of the year, now that the eurozone entered deflationary territory for the first time in four years. The Financial Times reported that several ECB officials were worried about the rise in the value of the euro, however, an interview by ECB board member Isabel Schnabel to Reuters contradicted this view.

Analysis:

Traders today have their short-term eyes on the expectation of the disclosure of the American Payroll this Friday. However, looking at the data already released, we conclude that the bias could be negative for the USD. Both the cut in job openings and the number of applications for unemployment insurance came below market expectations, which is a Página 3 good thing, however, estimates pointed to a much higher number of new jobs than observed. Adding these factors together, we conclude that the recovery of the labor market in August will still not be enough for investors to believe in the recovery of the post-pandemic American economy.

In relation to the EUR, the investor is also cautious, even with the news of the French economic stimulus package, as the latest news shows that the economic recovery in the bloc may be longer than expected.

In a scenario like this, in which the two strongest currencies available inspire prudence, the market’s attention is turned to gold and silver.

In the last 5 years the value of gold in USD has been rising consistently, having reached a very strong appreciation since the beginning of the coronavirus pandemic in 2020, as shown in the graph below. This metal has always been an important ballast of the world economy and will probably continue to be, regardless of the path it takes.

It is worth noting that gold does not pay dividends, does not pay interest, has no cash flow, and that is why it is very difficult to find a fair value for it. So, is it still worth investing in gold? Is it metal strength enough to surpass the value of 2 thousand USD per ounce?

Gold has a negative correlation with the US interest rate. In other words, when the American future interest curve falls, the value of gold tends to rise. The interest rate is already close to zero and should remain close to this value, therefore, the correlated appreciation of gold has already happened, it has already been priced, which helped the metal to reach these record values.

Analysts believe that, as long as the policy of monetary stimulus in the United States lasts, gold would be able to remain close to US $ 2 thousand, and may even reach US $ 2.1 thousand. The table below shows the banks’ consensus on the metal’s future price:

It is still possible to make some profits from gold trading, however, they are reduced and require a longer payback period than ForEx trading.

Calendar:

Wednesday, the market is optimistic awaiting the release of PayRoll this Friday, September 4th, with a consensus expectation of 167,000 job openings in July 2020. Today’s main disclosures are Australia’s GDP, sales data in German Retail and PPI (Producer Price Index) for the Euro Zone. Many speeches from the EDF team this afternoon.

News:

The Australian economy shrank 7% in 2Q20 due to the pandemic, an even stronger drop than the 5.9% forecast. It was the sharpest quarterly contraction recorded, opening the first recession in 30 years. Household consumption fell (-12.1%) as did gross fixed capital formation (-4.9%). In contrast, government spending had the fastest growing since the fourth quarter of 1995 (2.9%). Exports decreased (-6.7%), as well as imports (-12.9%). On the production side, most sectors contracted, except mining, finance and insurance, public administration and education. In 1H20, the Australian economy shrank 6.3%.

Retail sales in Germany increased by 4.20% in 2020 compared to the same period in last year, below the forecast of 5.1%, raising concerns about the recovery of Europe’s largest economy. Analysts expected an increase of 0.5% in July compared to the previous month, however there was a decrease of 0.9% in this comparison.

The Euro Zone PPI (Producer Price Index) decreased by 3.30% in 1H20 compared to the same period in last year, in line with forecasts of a 3.4% decline. In July 2020, in comparison with the previous month, prices increased in energy (2.1%), durable consumer goods (0.4%) and intermediate goods (0.1%). On the other hand, the price of capital goods remained unchanged and non-durable consumer goods fell 0.2%

n the US, the eyes are on FED decisions, whose strategy is to keep interest rates low (close to zero) for a longer period, despite the inflation (around 2% per year). This will happen through a flexible monetary policy (currency issuance). FED believes this will be able to stimulate the economy enough to reach a maximum level of employment. In real life, US authorities are working to neutralize the risks to consumer / voter confidence. Yesterday, for example, they issued a national order temporarily preventing millions of US tenants from being evicted, claiming that the evictions would accelerate the spread of Covid-19.

Opening Data:

The USD has been recovering its value against other currencies, trading around 92.6 this Wednesday. The market is optimistic based on the latest data released on the North American economy (Manufacturing PMI reached the highest number in almost 2 years and vehicle sales returned to pre-pandemic levels). However, the USD remains far from 100, awaiting the new economic recovery package, and the euro hit the $ 1.20 mark for the first time since May 2018.

Analysis:

Higher-than-expected manufacturing data in the US raised hopes for a faster recovery in the world’s largest economy. The Industrial Activity Index of the Institute of Supply Management (ISM), which indicates the pace of industrial activity in the previous month, resulting from a survey with more than 400 companies from 20 industries across the 50 states, reached 56 points in its last release. This information is considered a very important measure of economic confidence. Below 50 indicates an economic recession, especially if the trend continues for several months. A number above 50 indicates a period of economic growth. The graph below shows this index growing and close to 55 between May and July 2020.

This situation shows that the FED’s decisions are supporting the economy and that this situation will continue until the coronavirus vaccine is launched and the economy regains its normal pace. In an election year, the White House insists on a solid economic recovery forecast, and the figures released recently even confirm this thesis. However, it is increasingly evident that this economic recovery is unlikely to be V-shaped.

Due to the pandemic, the US government has allocated more than US $ 3 trillion in tax incentives, a record amount, to people and companies. However, that support ended abruptly on July 31, when Congress and the White House were unable to agree on a second round of stimulus, which is removing at least $ 750 billion a month from the economy in the second quarter.

In response to this situation, the August consumer confidence index fell 7 points, to 84.8. Meanwhile, the financial market turns its attention to stocks, causing the S&P 500 to reach a new record, as shown in the graph below:

There is also an expectation that there will be a second wave of contamination by the coronavirus in the coming months, due to the arrival of the autumn-winter season. Another point is inflation, which is being pulled upwards by strong monetary intervention, and which can take the country’s debt to too high levels. The transition from physical money to a digital version should also impact the dollar’s strength in the long run. In contrast to the government’s theory, the analysts of financial institutions are already betting more on the W-shaped recovery, that is, it will get worse before it gets better.

This 2020 crisis is affecting the economy in general. What will happen when the fiscal well runs dry, companies operate with record levels of indebtedness and the monetary tap is unable to pour liquidity as fast as it has been doing?

These doubts are keeping the ForEx market in a situation of strong volatility. Anything can happen while people are not solidly vaccinated against coronavirus. In the meantime, we believe that the dollar is still a safe currency, backed by the largest economy in the world, and that provides the basis for most contracts signed globally. However, it is recommended to make the most conservative decisions possible in your trading, and be emotionally prepared for the unexpected

Calendar:

Tuesday is bringing the release of German GDP data, a preview of the Brazilian IPCA and the number of new homes in the USA. EURUSD opened in appreciation, with the market still operating with considerable volatility.

News:

Industrial production in Austria shrank 10.3% compared to the previous year, in June 2020. Production decreased in mining (-20.4%); manufacturing (-12.5%); construction (-6.8%) and electricity supply (-3.8%). In relation to May 2020, industrial production increased by 5% pointing towards recovery.

Germany’s GDP for the second quarter declined by 9.7%, less than the estimated 10.1%. Consumption and exports were largely responsible for this result. The market takes this information as positive, but with little encouragement, since the recovery for the coming quarters should be slower than expected. The indicator that measures the expectations of companies in the country for the coming months continued to improve (97.5 in August vs 96.7 in July 2020). Encouragement improved in the industrial segment (-5.4 vs -12.1), services (7.8 vs 2.1), commerce (-4.8 vs -5.1) and construction (0.0 vs – 2.5).

It is interesting to highlight the latest restoration of DowJones (DJIA), an index that represents the evolution of the share price of the 30 main North American companies. Exxon Mobil, a giant in the oil and gas segment, left the composition of the index, pointing to the future decline of the natural resource extraction industry. Were also excluded from the index Raytheon (defense) and Pfizer (Swiss pharmaceutical). They were replaced by Salesforce (CRM software), Amgen (biotechnology) and Honeywell (industry).

The commercial relationship between the USA and China is in a good moment. China has set record quantities of US oil to be imported next month.

The hurricane season is beginning in the USA with 2 storms affecting oil production in the southern region of the country.

The S & P500 closed at 3,431.28 this Monday, driven especially by the FDA’s approval of the use of blood plasma to treat COVID-19.

Analysis:

The United States of America is currently going through a very turbulent time. In addition to the pandemic, the electoral dispute, the potential conflict with China, the bubble in the stock market, the excessive government intervention to keep the economy going, the country is also going through a series of riots, with people protesting against systemic racism and police brutality in several cities. Last weekend in Chicago, the protests resulted in two dozen people arrested, and 17 police officers and at least two injured protesters.

It is increasingly evident that no ‘V’ shaped economic recovery will soon reach the American economy. There is an expectation that there will be a second wave of contamination by the coronavirus in the coming months, due to the arrival of the autumn-winter season. Another point is inflation, which is being pulled upwards by strong monetary intervention, and which can take the country’s debt to higher levels. The transition from physical money to a digital version of it should also impact the dollar’s strength in the long term. The country, which has always been managed as a federation, is moving towards to a centralized administration, increasing the power of the Federal Government.

Analysts at financial institutions are already betting more on the W-shaped recovery, meaning that it will get worse before it gets better. And that recovery will take longer to happen.