Weekly notes for 07-13 February 2021.
Bank of England told the UK banks to prepare for negative interest rates, however, shortly after that news, BoE Governor Bailey went out of his way to explain that this is just a precautionary step and that they haven’t decided on the negative interest rates and compare the preparation work, to the preparation work that ECB did in 2018. From the latest statement from the BoE looks like the bank doesn’t see the need for further stimulus and its projections now assume the economy will regain all lost ground by the fourth quarter of 2021. As a result, we saw GPB moving to the upside, breaking out against the CHF, JPY and continue to strengthen against the EUR and USD.
The US earning season continues with strong and better-than-expected earnings reports, continuing to beat the analyst’s predictions. Last week Amazon’s Q4 sales topped 100 billion for the first time, following the Apple earning report which also topped $100 billion in revenue for the first time. Better than expected earnings reports and improving economic data in the US helped to lift both NASDAQ and SPX 500 to a new record high. We also saw the USD breaking up against the EUR, CHF, and JPY. Review our technical analysis for the DXY and FXCM dollar index for this week to find out more about this USD break-up.
We also witness a breakup in the Crude Oil and Brent Crude Oil.
In Europe, former ECB president Mario Draghi accepted the Italian president invitation to form the next Italian government.
Here are some of the economic data from last week:
- US Non-Farm Payrolls JAN 49K vs previous at -227K and expectation for 50K
- US Unemployment Rate JAN at 6.3% vs previous at 6.7% and expectation for 6.7%
- US Average Hourly Earnings MoM JAN at 0.2% vs previous at 1% and expectation for 0.3%
- US Manufacturing Payrolls JAN at-10K vs previous at 31K and expectation for 30K
- US Average Hourly Earnings YoY JAN at 5.4% vs previous at 5.4% and expectation for 5.10%
- US Average Weekly Hours JAN at 35 vs previous at 34.7 and expectation for 34.7
- US Government Payrolls JAN at 43K vs previous at -23K and expectation for -5K
- US Nonfarm Payrolls Private JAN at 6K vs previous at -204K and expectation for 50K
- Canada Employment Change JAN at -212.8K vs previous at -68.2K and expectation for -47.5K
- Canada Full Time Employment Chg JAN at 12.6K vs previous at -68.6K and expectation for -25K
- Canada Part Time Employment Chg JAN at -225.4K vs previous at 0.4K and expectation for -10K
- Canada Unemployment Rate JAN at 9.4% vs previous at 8.8% and expectation for 8.9%
- Canada Average Hourly Wages YoY JAN at 5.9% vs previous at 5.4%
This coming week the focus will be on the Democrats and the Biden administration push to pass the 1.9T stimulus package without the Republicans. Also, we have FED chairman Powell speaking on Thursday, 11th of February 2021.
Earnings season in the US is continuing next week, here is a list of some of the companies scheduled to report earnings:
- TWTR, Twitter – reporting earnings on Tuesday, February 09, 2021
- LYFT, Lyft – reporting earnings on Tuesday, February 09, 2021
- UBER, Uber – reporting earnings on Wednesday, February 10, 2021
- UAA, Under Armour, Inc. – reporting earnings on Wednesday, February 10, 2021
- GM, General Motors Company, Inc. – reporting earnings on Wednesday, February 10, 2021
- KO, The COCA-COLA Company, Inc. – reporting earnings on Wednesday, February 10, 2021
- ZNGA, Zynga – reporting earnings on Wednesday, February 10, 2021
- MGM, MGM Resorts International – reporting earnings on Wednesday, February 10, 2021
- DIS, Walt Disney Co. – reporting earnings on Thursday, February 11, 2021
- NET, Cloudflare, Inc. – reporting earnings on Thursday, February 11, 2021 MCO, Moody’s Corp. – reporting earnings on Friday, Friday 12, 2021
Have a happy, positive, and profitable week ahead!