Europe Roundup: Sterling strengthens against dollar on vaccine optimism, European shares rise, silver soars to 8-year peak, Oil prices gain as inventories fall and demand picks up-February 1st,2021

Market Roundup

•German Dec Retail Sales (YoY) 1.5%,5.0% forecast, 5.6% previous

•German Dec Retail Sales (MoM) -9.6%, -2.6% forecast, 1.9% previous

•Sweden Jan Manufacturing PMI 62.4, 65.0 forecast, 64.9 previous

•Swiss Dec Retail Sales (YoY) 4.7%,1.7% previous

•Spanish Jan Manufacturing PMI 49.3, 50.9 forecast, 51.0 previous

•Sweden GDP (QoQ) (Q4) 0.5%,0.7% forecast, 4.9% previous

•Sweden GDP (YoY) (Q4) -2.6%, -2.3% forecast, -2.5% previous

•Italian Jan Manufacturing PMI 55.1, 52.4 forecast, 52.8 previous

•French Jan Manufacturing PMI 51.6, 51.5 forecast, 51.5 previous

•German Jan Manufacturing PMI 57.1, 57.0 forecast, 58.3 previous

•Italian Dec Monthly Unemployment Rate 9.0%,8.8% forecast, 8.9% previous

•EU Jan Manufacturing PMI 54.8, 54.7 forecast, 54.7 previous

•UK Jan Manufacturing PMI 54.1, 52.9 forecast, 52.9 previous

•UK Dec Mortgage Approvals 103.38K, 105.00K forecast, 104.97K previous

•UK Dec BoE Consumer Credit -0.965B , -1.100B forecast, -1.539B previous

Looking Ahead – Economic (GMT)

•13:30 French 12-Month BTF Auction 0.621% previous

•13:30 French 3-Month BTF Auction-0.624% previous

•13:30 French 6-Month BTF Auction -0.624% previous

•14:00 Canada Jan Manufacturing PMI 57.9 previous

•14:45 US Jan Manufacturing PMI 59.1 previous

•14:45 US Jan ISM Manufacturing Prices 77.0 forecast, 77.6 previous

•14:45 US Jan ISM Manufacturing Employment 51.7 previous

•15:00 US Jan ISM Manufacturing PMI 60.0 forecast, 60.5 previous

•15:00 US Dec Construction Spending (MoM) 0.9% forecast, 0.9% previous

•15:00 US Jan ISM Manufacturing New Orders Index 67.5 previous

•16:30 US 3-Month Bill Auction 0 .080% previous

•16:30 US 6-Month Bill Auction 0.085% previous

•18:00 Russia GDP Monthly (YoY) -3.7% previous

Looking Ahead – Economic events and other releases (GMT)

• No significant events

Fx Beat

EUR/USD: The euro weakened against dollar on Monday as worsening of the pandemic in the euro area,slow rollout of vaccinations and ongoing lockdowns weighed on euro. Euro zone manufacturing growth remained resilient at the start of the year but the pace waned from December as renewed lockdown measures across the continent, alongside supply shortages, hurt activity, a survey showed. IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) fell to 54.8 in January from December’s 55.2, although that was a touch above the initial 54.7 lash estimate. Immediate resistance can be seen at 1.2116 (5 EMA), an upside break can trigger rise towards 1.2204 (23.6%fib).On the downside, immediate support is seen at 1.2059 (38.2%fib), a break below could take the pair towards 1.2000 (Psychological level).

GBP/USD: Sterling gained against the dollar on Monday as combination of heightened global risk appetite and optimism about the UK’s vaccine rollout boosted sterling. Riskier currencies gained against the dollar, which edged lower as global market sentiment was lifted by an equity rally in the Asian session.The pound strengthened even more than other “risk” currencies such as the Australian dollar and Norwegian crown. The pound rose to $1.3758 just shy of the three-year high of $1.3759 it reached on Wednesday last week. At 1230 GMT, it was at $1.3720, up 0.2% on the day. Immediate resistance can be seen at 1.3758 (23.6%fib), an upside break can trigger rise towards 1.3800 (Psychological level).On the downside, immediate support is seen at 1.3689 (5 EMA), a break below could take the pair towards 1.3643 (38.2%fib).

USD/CHF: The dollar strengthened against the Swiss franc on Monday as cautious mood in the market supported dollar. The Swiss franc fell out of recent trading ranges against the dollar on Monday, dropping to its lowest levels in two months while the U.S. currency bounced to a 2-week high. On the data front, investors awaited to a reading on ISM’s manufacturing index, which is expected to tick lower in January after accelerating to its highest level in nearly 2-1/2 years in December. Immediate resistance can be seen at 0.8962 (38.2%fib), an upside break can trigger rise towards 0.9899 (23.6%fib).On the downside, immediate support is seen at 0.8938 (50%fib), a break below could take the pair towards 0.8912( 61.8%fib).

USD/JPY: The dollar strengthened against the Japanese yen on Monday, although worries over vaccine rollouts and economic recovery persisted among investors. Global investors have mostly opted for safe-haven bets , wary of the ongoing battle on Wall Street between hedge funds and retail investors. That has pushed up dollar buying. Strong resistance can be seen at 104.93 (38.2%fib), an upside break can trigger rise towards 105.41 (23.6%fib).On the downside, immediate support is seen at 104.56 (50%fib), a break below could take the pair towards 104.49 (5 EMA).

Equities Recap

European shares rose on Monday, bouncing from their worst weekly decline since October helped by a rise in shares of miners after an ongoing retail frenzy shifted its attention to silver.

At (GMT 12:40),UK’s benchmark FTSE 100 was last trading up at 1.24 percent, Germany’s Dax was up by 1.44 percent, France’s CAC was last up by 1.36 percent.

Commodities Recap

Silver extended its blistering rally for a third session on Monday, soaring as much as 11.2% to a near eight-year high as retail investors piled into the metal in a frenzy kicked off by U.S. social media users last week.

Spot silver jumped 8.4% to $29.26 an ounce by 1144 GMT, having earlier hit its highest since February 2013 at $30.03.

Oil prices rose on Monday buoyed by falling inventories and hopes of a swifter global economic recovery, although halting vaccine rollouts and renewed travel restrictions capped gains.

Brent crude was up 79 cents, or 1.4%, at $55.83 a barrel by 1215 GMT. U.S. crude gained 61 cents, or 1.2%, to $52.81. Both benchmarks gained nearly 8% in January.

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