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Eurozone industrial production dropped -1.6% mom in Dec, EU down -1.2% mom

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    ActionForex.com
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    Eurozone industrial production dropped -1.6% mom in December, worse than expectation of -0.6% mom. Production of capital goods fell by -3.1% mom and non-durable consumer goods by -0.6% mom, while production of durable consumer goods rose by 0.8% mom, intermediate goods by 1.0% mom and energy by 1.4% mom.

    EU industrial production dropped -1.2% mom. Among Member States, for which data are available, the largest decreases were registered in Hungary (-2.5% mom), Belgium (-1.9% mom) and Finland (-0.9% mom). The highest increases were observed in Denmark (+2.4% mom), Portugal (+1.8% mom), Estonia and Luxembourg (both +1.6% mom).

    Full release here.

    NZD/JPY upside breakout, on track to 77.07 projection level

      By
      ActionForex.com
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      NZD/JPY finally follows other commodity yen crosses, and break through 76.12 support to resume recent rally. Current rise is seen as part of the up trend from 59.49. Next target is 100% projection of 63.45 to 71.66 from 68.86 at 77.07. At this point, we’d stay cautious on topping around this projection level to complete the five wave sequence from 63.45.

      But firstly, break of 75.34 support is needed to be the first signal of short term topping. Secondly, sustained break of 77.07 would likely prompt some upside acceleration for 161.8% projection at 82.14 next.

      GBP/CHF resumes rally on talks of lockdown exit, may target 1.2840 projection next

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        ActionForex.com
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        GBP/CHF’s up trend resumes today and hits as high as 1.2393 so far, on news that UK is mulling lockdown exit after 1.5m of its most vulnerable population are vaccinated already. Health Secretary Matt Hancock said that there will be judgement this week while Prime Minister Boris Johnson will set out the roadmap on the 22nd.

        GBP/CHF now pressing 61.8% projection of 1.1102 to 1.2259 from 1.1683 at 1.2398 and outlook will stay bullish as long as 1.2267 support holds. Sustained break above there will be a sign of more upside acceleration. Whole rebound form 1.1102 would then target 100% projection at 1.2840.

        The projection level is close to 55 month EMA (now at around 1.2800). Sustained break there will at least eliminate medium term bearishness and could at least extend the rally to 1.3310 resistance next.

        Bitcoin fails 50k again, more consolidations first

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          ActionForex.com
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          Bitcoin hits as high as 49238 in early trading but was rejected below 50k handle once again. As noted before, upside momentum is unconvincing with bearish divergence condition in hourly MACD. Even in case of another rally attempt, we’d expect 50k to limit upside for now and more consolidation is likely for the next few days.

          Though, downside should be contained by 43777 support to set the stage for up trend resumption later in the week. Current rise should target 100% projection of 17629 to 41964 from 29283 at 53618 after clearing 50k handle. But a break of 43777 will bring deeper correction first.

          WTI breaks 60 on Yemen clashes, accelerating towards 62.3

            By
            ActionForex.com
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            WTI oil gaps up today and surges to as high as 60.77 so far, breaking 60 psychological level. Buying was triggered by tension in Middle East. Dozens were killed in heavy clashes in Yemen between the country’s internationally recognized government and Iran-backed Houthi rebels. Additionally, sentiments were generally lifted by optimism of returning to normal with global vaccinations.

            WTI is now clearly in upside acceleration mode targeting 161.8% projection of 47.24 to 53.92 from 51.58 at 62.38. Break there will put 65.43 key structural resistance in focus. In any case, outlook will now stay bullish as long as 57.30 support holds, even in case of deep retreat.

            New Zealand BusinessNZ services dropped to 47.9, generally negative

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              ActionForex.com
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              New Zealand BusinessNZ Performance of Services dropped -1.2 pts to 47.9 in January, signal deeper contraction. The index was also well below long term average of 53.8 for the survey. Looking at some details, activity/sales dropped from 51.0 to 46.4. Employment dropped from 52.8 to 46.9. New orders, though, improved from 50.9 to 53.7.

              BusinessNZ chief executive Kirk Hope said that the January result was generally negative when examined more deeply. “Looking at the comments made by respondents, the ongoing trend of contraction was typified by the influences of the Xmas period, ongoing COVID-19 related issues (including freight challenges) and a slower return to business as usual post holidays”.

              Full release here.

              Japan GDP grew 12.7% annualized, 3.0% qoq in Q4, well above expectations

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                ActionForex.com
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                Japan’s GDP grew 12.7% annualized in Q4, well above expectation of 9.5%. On quarterly terms, GDP grew 3.0% qoq, beat expectation of 2.3% qoq. Looking at some details, private consumption rose 2.2% qoq, above expectation of 1.8% qoq. Capital expenditure rose 4.5% qoq, above expectation of 2.6% qoq. External demand rose 1.0% qoq, matched expectations. Price index, however, rose just 0.2% yoy, missed expectation of 0.5% yoy.

                Economy Minister Yasutoshi Nishimura said that the set of data showed the economy’s capacity on recovery. Nevertheless, consumer spending remained below average. Exports could also weaken if the coronavirus infections prompts more restrictions in other markets like Europe. The country is not out of the woods yet.

                Also from Japan, industrial production was finalized at -1.0% mom in December.

                NIESR expects UK economy to contract -3.8% in Q1

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                  ActionForex.com
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                  NIESR said it expected the UK economy to contract by -3.8% in Q1 this year, “as stringent Covid-19 restrictions are expected remain elevated until early spring, along with the effects of post-Brexit adjustment”.

                  “The level of GDP in the fourth quarter remained about 8 per cent below pre-pandemic levels even before a third lockdown became necessary in January 2021. With Covid-19 restrictions expected to remain elevated until early spring, we anticipate a sharp decline in activity during the first quarter of the year. Nevertheless, growth will pick up from the second quarter onwards as restrictions ease on the back of a successful vaccination programme.” Dr Kemar Whyte, Senior Economist – Macroeconomic Modelling and Forecasting.

                  Full release here.

                  Bitcoin hits new record but lacks follow through buying, more consolidations likely

                    By
                    ActionForex.com
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                    Bitcoin hits new record high at 48944 earlier today but lags follow through buying so far. Upside momentum is also unconvincing with bearish divergence condition in hourly MACD. For now, we’d continue to expect some strong resistance around 50k psychological level to limit upside and bring near term correction first.

                    But near term outlook will stay bullish as long as 43777 support holds. We’d expect current up trend to target 100% projection of 17629 to 41964 from 29283 at 53618 next, after completing the envisaged consolidations.

                    UK GDP grew 1.2% mom in Dec, 1% qoq in Q4

                      By
                      ActionForex.com
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                      UK GDP grew 1.2% mom in December, above expectation of 1.0% mom rise. Index of services rose 1.7% mom. Index of production rose 0.2% mom. Manufacturing rose 0.3% mom. Construction dropped -2.9% mom. Agriculture rose 0.3% mom.

                      For Q4, GDP grew 1.0% qoq, well above expectation of 0.5% qoq. Index of services rose 0.6% qoq. Index of production rose 1.8% qoq. Manufacturing rose 3.3% qoq. Construction rose 4.6% qoq. Agriculture rose 0.7% qoq.

                      For 2020, annual average GDP contracted -9.9%, largest yearly fall on record. Services dropped -8.9%. Production dropped -8.6%. Construction dropped -12.5%. Agriculture dropped -9.4%.

                      Full release here.

                      New Zealand BusinessNZ manufacturing rose to 57.5, encouraging with new orders leading the way

                        By
                        ActionForex.com
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                        New Zealand BusinessNZ Performance of Manufacturing jumped a notable 9.2 pts to 57.5 in January. Looking at some details, Production rose from 52.3 to 59.1. Employment rose from 50.2 to 55.4. New Orders rose from 50.3 to 62.4. Finished stocks rose from 47.8 to 52.5. Deliveries also improved from 45.0 to 48.7.

                        BusinessNZ’s executive director for manufacturing Catherine Beard said that the January result was a welcome start to 2021, with the result clearly above the long term average of 53.0 for the Index.

                        BNZ Senior Economist, Craig Ebert said that “the 3-month average to January was 53.6, slightly above the long-term norm of 53.0.  Also, January’s improvement was encouraging in its composition, with New Orders leading the way”.

                        Full release here.

                        BoE Haldane: A decisive corner is about to be turned

                          By
                          ActionForex.com
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                          In Daily Mail article, BoE chief economist Andy Haldane said the “rapid rollout of the vaccination programme” means “a decisive corner is about to be turned for the economy too, with enormous amounts of pent-up financial energy waiting to be released, like a coiled spring.”

                          “People are not just desperate to get their social lives back, but also to catch up on the social lives they have lost over the past 12 months,” he expected.

                          “So come the Spring, we can expect the UK economy to be firing on all three cylinders – households, companies and government,” he added. “A year from now annual growth could be in double-digits and inflation back on target.”

                          “As its energies are released, the recovery should be one to remember after a year to forget.”

                          Full article by Haldane here.

                          Fed Harker doesn’t seen inflation roaring past 2% any time soon

                            By
                            ActionForex.com
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                            Philadelphia Fed President Patrick Harker said in a CNBC interview that inflation is not a problem for now. “I don’t see it roaring past 2% anytime soon, so I’m not so worried about that risk right now,” he said. “In the medium or longer run, yeah, sure, it’s something we have to take into account. But not now.”

                            “What I look at is not only the level of inflation but also is it accelerating or decelerating,” he said. “We’re clearly committed as to exceed 2% for a period of time, but it has to be sustainably above 2% for a period of time.”

                            Separately, Richmond Fed President Thomas Barkin said, “I don’t think the economy requires herd immunity. Consumers who get vaccines, who have money in their pockets…are going to be free to spend”.

                            AUD/JPY resumes up trend, NZD/JPY and CAD/JPY to follow?

                              By
                              ActionForex.com
                              -

                              AUD/JPY’s rally resumes after brief consolidation and reaches as high as 81.35 so far. On the other hand, NZD/JPY and CAD/JPY are both held below corresponding resistance. Ideally, one by one, we’d like to see these three Yen crosses to extend recent up trend to confirm each others’ underlying momentum.

                              AUD/JPY’s current rise is part of the up trend from 59.89 and should target 61.8% projection of 59.89 to 78.46 from 73.13 at 84.60 next. Break of 80.63 support will bring some more consolidations but outlook will stay bullish as long as 79.18 support holds.

                               

                              NZD/JPY also recovers after drawing support from 4 hour 55 EMA. But upside is limited below 76.12 temporary top. While more consolidations cannot be ruled out, outlook will stay bullish as long as 74.11 support holds. Break of 76.12 will resume the up trend from 59.49. Next target is 100% projection of 63.45 to 71.66 from 68.86 at 77.07.

                              Similarly, CAD/JPY rebounds after drawing support from 4 hour 55 EMA, but stays below 82.69 temporary top. Consolidations might extend but outlook will stay bullish as long as 80.96 support holds. Break of 82.69 will resume the up trend from 73.80. Next target is 100% projection of 74.76 to 81.91 from 77.91 at 85.06

                              US initial jobless claims dropped to 793k, continuing claims dropped to 4.55m

                                By
                                ActionForex.com
                                -

                                US initial jobless claims dropped -19k to 793k in the week ending February 6, above expectation of 775k. Four-week moving average of initial claims dropped 33.5k to 823k.

                                Continuing claims dropped -145k to 4545k in the week ending January 30. Four-week moving average of continuing claims dropped -158k to 4749k.

                                Full release here.

                                European Commission expects economy to return to pre-crisis levels earlier

                                  By
                                  ActionForex.com
                                  -

                                  In the Winter 2021 Economic Forecast, European Commission downgraded 2021 growth projection of EU to 3.7% (from Autumn’s 4.1%) and Eurozone to 3.8% (from 4.2%. But it upgraded 2022 growth projection of EU to 3.9% (from 3.0%) and Eurozone to 3.8% (from 3.0%).

                                  Eurozone and EU economies are now expected to reach pre-crisis levels “earlier than anticipated” in Autumn, “largely because of the stronger than expected growth momentum projected in the second half of 2021 and in 2022.”. Growth is “set to resume in the spring and gather momentum in the summer as vaccination programmes progress and containment measures gradually ease.” Inflation, however, is set to remain subdued.

                                  Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People said: “Today’s forecast provides real hope at a time of great uncertainty for us all. The solid expected pick-up of growth in the second half of this year shows very clearly that we are turning the corner in overcoming this crisis.”

                                  Paolo Gentiloni, Commissioner for Economy said: “Europeans are living through challenging times. We remain in the painful grip of the pandemic, its social and economic consequences all too evident. Yet there is, at last, light at the end of the tunnel. As increasing numbers are vaccinated over the coming months, an easing of containment measures should allow for a strengthening rebound over the spring and summer.”

                                  Full release here.

                                  ECB Villeroy: Green central bank action is not about easing

                                    By
                                    ActionForex.com
                                    -

                                    ECB Governing Council member Francois Villeroy de Galhau said he proposed to “decarbonizing the ECB’s balance sheet with a pragmatic, progressive and targeted approach to all corporate assets whether they be held on the central bank’s balance sheet as purchases or taken as collateral.”

                                    Villeroy noted that the stagflationary nature of climate change was the reason to take it into account. It could challenge the price stability mandate by pushing up prices while weighing on the economy.

                                    Though, he also noted, “the greening of central bank action is not about additional monetary policy easing but recalibrating our tools”.

                                    Gold recovery stalled after hitting 55 D EMA, staying bearish

                                      By
                                      ActionForex.com
                                      -

                                      Gold’s recovery lost momentum with 4 hour MACD crossed below signal line. That came after hitting 55 day EMA, and well ahead of 1875.59 near term resistance. Overall outlook stays bearish that decline from 1959.16, as the third leg of the corrective pattern from 2075.18, is in favor to continue.

                                      On the downside, break of 1818.66 minor support will bring retest of 1784.67 first. Break will target 1764.31 and then 38.2% retracement of 1160.17 to 2075.18 at 1725.64. Nevertheless, break of 1875.59 will argue that the falling leg form 1959.16 has completed and bring stronger rebound.

                                      RBA Harper: Still plenty of excess capacity in the economy

                                        By
                                        ActionForex.com
                                        -

                                        RBA board member Ian Harper said there’s “still plenty of excess capacity in the economy”. The tendency for monetary stimulus to product an asset-price bubble is “way off where we’re presently headed”. Policymakers indeed wanted asset prices to be increasing to speed up investment. Harper added, “the bank can continue to buy bonds for as long as it likes, there’s no obstacle to that.”

                                        “The recent changes that the Fed made, well that was to bring them up to where we are basically,” he said. “We’ve never religiously or rigidly interpreted the timeframe over which we would seek the inflation rate to be within the target band.”

                                        Fed Powell: Far from a strong labor market despite surprising recovery

                                          By
                                          ActionForex.com
                                          -

                                          In a relatively dovish speech, Fed Chair Jerome Powell said, “despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared.” And, “even those grim statistics understate the decline in labor market conditions for the most economically vulnerable Americans.”

                                          “Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy,” he added. “It will require a society-wide commitment, with contributions from across government and the private sector.”

                                          Full speech here.

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