Following muted trading in Asia where most regional markets closed for the Lunar New Year holiday, European equities opened marginally lower as risk mood looks more tepid ahead of a long weekend in the US. On the data front, US initial jobless claims fell by 19,000 to 793,000 last week versus 760,000 expected. In the U.K., the economy contracted 9.9% last year, posting its biggest annual fall since modern records began. In the fourth quarter, the U.K.’s GDP rose 1%.
As for earnings, ING Groep NV beat fourth-quarter expectations with a 1.05-billion-euro pretax profit while provisions for bad loans fell 51% to 208 million from the same period a year earlier. Following the report, the largest Dutch bank’s stocks climbed nearly 5% early in Europe. Meanwhile, La Française des Jeux, France’s leading gaming operator, gained 5.5% after its full-year results.
Against this backdrop, the FTSE 100 in London sheds 0.14% to 6,519, Italy’s FTSE MIB declines by 0.70 percent to 23,145, France’s CAC 40 is down by 0.33% to 5,650, while the German DAX 30 loses 0.62% to 13,953. US stock index futures edge lower after reaching fresh all-time highs overnight.
In currencies, the dollar regains ground on Friday following the recent sell-off as risk sentiment continues to deteriorate. As such, EURUSD turned negative following three daily builds in a row and was last seen flirting with the 20-DMA that arrives at 1.2100. A break below this level could add to the selling pressure surrounding the common currency in the short term. earlier, the 1.2150 zone appears to have prompted some profit taking as the pair failed to preserve recent gains.
USDJPY rallied above the 105.00 figure in recent trading but is yet to confirm the breakout on a daily closing basis. The pair has been in a recovery mode for the third day in a row, erasing earlier losses that took the prices to the 100-DMA earlier this week. Despite a strong bullish momentum, the dollar could struggle to see more gains in the near term, with the next upside target arrives at 105.55 where the 200-DMA lies.
Meanwhile, oil prices have been trending marginally lower for the third day in a row as Brent crude extends its mild and gradual downside correction from fresh January 2020 highs registered around $61.70 earlier in the week. In recent trading, the futures slipped to local lows around $60.35, targeting the $60 figure. Later in the day, the baker Hughes traditional weekly report could affect short-term dynamics in the oil market.
Nathan Lambert, Head of Global FX Analytical Department