Here is what you need to know on Friday, February 19:
The market mood remains sour amid uncertainty around US stimulus, weak data, and elevated yields. Oil prices are falling from the highs as output in TExas gradually returns, while Gold and Bitcoin are on the back foot. Preliminary PMIs for February are awaited around the world.
Global equities have extended their correction from the highs as bond yields in the US and also in Japan and other places continue to rise. Weekly US jobless claims disappointed with a jump, indicating the ongoing struggle of the world's largest economy.
Declining coronavirus statistics have failed to cheer investors. However, as ten-year Treasury yields hover below 1.30%, the dollar is retreating from the highs.
US stimulus: President Joe Biden and Treasury Secretary Janet Yellen reiterated their message to Congress to "go big" on covid disaster relief ahead of a potential vote in late February. The Washington Post reports that in addition to the proposed $1.9 trillion bill, Democrats are mulling an additional $3 trillion in a jobs and infrastructure program.
Gold has been extending its decline, trading below $1,770 at the time of writing. Investors seem more enthusiastic about Bitcoin as a haven while rising returns on US yields make the yieldless less attractive.
Where next for stocks, gold and Bitcoin in a world where bad news becomes good news
EUR/USD has retreated from the 1.21 level ahead of Markit's publication of preliminary Purchasing Managers' Indexes for February. The forward-looking gauges are set to show an ongoing divide between the humming manufacturing sector and the struggling services one. Germany's finance minister said he sees a subdued economy while European Central Bank Christine Lagarde stated that 2021 is the "year of the recovery."
GBP/USD has maintained a safe distance from the 1.40 level ahead of the release of UK PMIs and Retail Sales. Prime Minister Boris Johnson's speech on reopening the economy on Monday is eagerly awaited and details may come out.
WTI Crude Oil has slipped below $60 as output in Texas is coming back online after the "deep freeze" storm paralyzed production. Moreover, Saudi Arabia is likely to return to higher output levels later in the spring.
Cryptocurrencies: Bitcoin has cooled off the highs but remains above $50,000. Tesla's Elon Musk continued touting the granddaddy of cryptocurencies. Ethereum is holding up above $1,900 while XRP is changing hands above $0.50.
Bitcoin price at new all-time highs while on-chain metrics suggest further growth
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EUR/USD stabilizes near 1.0550, looks to post weekly gains
EUR/USD continues to fluctuate in a tight channel at around 1.0550 in the American session on Friday as trading action remains subdued with US financial markets heading into the weekend early. The pair looks to end the week in positive territory.
GBP/USD loses traction, retreats below 1.2700
After climbing to its highest level in over two weeks at 1.2750, GBP/USD reverses direction and declines to the 1.2700 area on Friday. In the absence of fundamental drivers, investors refrain from taking large positions. Nevertheless, the pair looks to snap an eight-week losing streak.
Gold pulls away from daily highs, holds near $2,650
Gold retreats from the daily high it set above $2,660 but manages to stay afloat in positive territory at around $2,650, with the benchmark 10-year US Treasury bond yield losing more than 1% on the day. Despite Friday's rebound, XAU/USD is set to register losses for the week.
Bitcoin attempts for the $100K mark
Bitcoin (BTC) price extends its recovery and nears the $100K mark on Friday after facing a healthy correction this week. Ethereum (ETH) and Ripple (XRP) closed above their key resistance levels, indicating a rally in the upcoming days.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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