04
Feb
04
Feb

Italy CPI, EU PPI, Google Earnings

On Friday the US dollar traded almost unchanged against other major currencies. However the pound sterling (GBP) further declined, clearly leaving the 1.31 range over continued Brexit concerns. In the newest development due to the uncertainty, the car maker Nissan cancelled its plans to produce its X-Trail SUV in the UK.

The Indian Rupee (INR) opened significantly weaker against the dollar on Monday, close to the low seen in mid-December, following an announcement from the Ministry of Finance that the fiscal deficit for this and next year will have to be adjusted higher.

Global stock indices closed mixed on Friday, while the VIX – Volatility Index, which is also called by some a “fear indicator” further declined to the lowest level since the beginning of December.

On Monday Italy releases its consumer price index (CPI) and the European Union the producer price index (PPI) for the bloc. From the US data on factory orders will come in.

Later in the Asian-Pacific trading session a significant amount of data will come in from Australia. Besides the interest rate decision by the Reserve Bank of Australia, data on retail sales and the trade balance will be released.

EUR/USD

With the relatively unchanged dollar, the EUR/USD also saw only a limited upside during the trading session on Friday. European inflation (HICP) was as expected at +1.4% y/y in January, while the German manufacturing PMI was again seen declining. US data was mixed with NFP at 304 thousand above expectations, while at the same time the unemployment rate was reported 0.1% higher compared to the previous month.

On Monday Italy releases its consumer price index (CPI) and the European Union the producer price index (PPI) for the bloc. From the US data on factory orders will come in.

The EUR/USD chart

Germany 30

In an otherwise overall mixed trading session on Friday Adidas (-3.97%) was one of the weaker performers in the market, with analysts from different investment banks giving price targets to the upside and also to the downside.

The German manufacturing PMI further declined to a level of 49.7, below the expected 49.9 that was reached the previous month. This is the second time in a row with a manufacturing PMI below 50, indicating an adverse development in that sector.

Shares of Deutsche Bank (-0.39%) reached a new two-weeks low, as there are rumours that the troubled bank might need to merge with its competitor Commerzbank (+0.48%) later this year to stay afloat, should business not improve by then.

For Tuesday the results of the services and composite PMI are expected. Later this week data on factory orders and trade balance will become available.

On Wednesday Munich Re releases quarterly financial results and the car maker Daimler will inform the public about its financial results for 2018.

The Germany 30 chart

WTI Oil

Oil prices were up at the highest level in over two months with multiple factors possibly driving the prices higher.

The US Baker Hughes Oil Rig Count was reported down by 15 oil rigs to only 847 operating now. This is the lowest number of operating oil rigs since May last year. Other possible factors influencing the energy commodities markets could have been the US sanctions against the oil sector in Venezuela and the market seeing commitment from OPEC countries to follow up on their pledges to curb production levels. However the oil production in Russia was reportedly missing the output cut targets with the newest numbers indicating a decline by only 35 thousand barrels per day compared to October.

On Tuesday the American Petroleum Institute (API) publishes its weekly report on crude oil stockpiles in the United States. The Energy Information Administration (EIA) is the set to release its weekly inventory numbers on crude oil, gasoline and distillates on Wednesday.

The WTI Oil chart

US 500

On Friday stock indices trade mixed, however on a weekly basis clear gains were seen after the flat results from last week, with the S&P 500 (US 500) by now making up for almost all the losses of the pre-Christmas sell-off.

Especially energy (US Energy ETF +1.68%) and chip sector (US Semiconductors ETF +1.22%) stocks traded overall higher, while a downside was seen in the sector of consumer discretionary (US Cyclicals ETF -1.54%) goods.

Economic data was mixed, with the unemployment rate slightly up from the previous record low, now at 4% and wholesale trade falling to +0.3% m/m in November. However the key indicators nonfarm payrolls (NFP) at 304 thousand (expected 158 thousand) and the ISM manufacturing index at 56.6 (expected 54.0) remained strong.

The chip maker Cypress Semiconductors (+7.02%) traded higher after showing better than expected quarterly earnings results, thanks to its growing business for internet connected devices and the car industry. Amazon (-5.63%) traded lower after the quarterly financial disclosures indicated a weaker than expected guidance for the first quarter this year.

Further earnings are expected to be released this week, with Google’s parent company Alphabet publishing earnings on Monday. For Tuesday earnings from Electronic Arts, Tenable, Walt Disney and Snapchat are expected to come in.

The US 500 chart

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