Macro economics

Analytics on 02.03.2021. Stocks wobble between gains and losses

Following decent losses seen in Asia where stocks edged lower after the Chinese government expressed worries about a risk of asset bubbles in foreign markets, European shares opened marginally lower. The subsequent bullish attempts failed, with major indexes have settled below the opening levels in recent trading. The 10-year U.S. Treasury note yield keeps retreating from recent highs, helping to limit the selling pressure in the markets this week.

On the negative side, German retail sales fell 4.5% on the month in January after a decline of 9.1% in the previous month. Despite the decline has slowed since December, retail sales came in much weaker than expected, suggesting Europe’s largest economy struggles to recover from the pandemic amid the persisting restrictions. Meanwhile, unemployment change arrived at +9.0k in February versus -10.0k expected. Still, according to the latest reports, Germany is set to extend the lockdown until March 28. The government will be meeting with state leaders tomorrow, and there might be some modifications to the lockdown.

Against this backdrop, the FTSE 100 in London adds 0.16% to 6,598, Italy’s FTSE MIB sheds 0.30 percent to 23,194, France’s CAC 40 is down by 0.17% to 5,783, while the German DAX 30 loses 0.16% to 13,989. US stock index futures slipped in recent trading, a day after Wall Street logged its best day since June.

In currencies, the dollar bulls continue to dominate the market, with the USD index climbing to four-week highs in the 91.30 area. As investor sentiment looks mixed, market players prefer to buy the safe-haven greenback amid upbeat economic data out of the United States and stimulus expectations. As such, EURUSD plunged below the 1.2000 figure, to register one-month lows around 1.1990. If the pressure persists in the short term, the common currency could extend the decline towards this year’s lows in the 1.1950 area.

In commodities, Brent crude managed to stage a bounce from the 20-DMA around $62.50, to turn marginally positive on the day following three sessions of steep losses. Despite the recovery, the path of least resistance continues to point south as traders could take profit further ahead of the OPEC+ meeting due on Thursday. Besides, a stronger dollar will likely cap further bullish attempts in the near term, especially as risk aversion prevails in the global financial markets.

Nathan Lambert, Head of Global FX Analytical Department

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Interest rates

Country Rate Value
USA Federal Funds 0,25 %
Switzerland 3 Month LIBOR Range -0.75 %
United Kingdom Repo Rate 0,10 %
EU Refinancing Tender 0,00 %
Japan Overnight Call Rate -0,10 %
New Zealand Official Cash Rate 0,25 %
Australia Cash Rate 0,25 %
Canada Overnight Rate Target 0,25 %
All rates
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