eFXdata reports that Danske Research discusses EUR/CHF outlook and targets at 1.08 in 1-3months, and 1.10 in 6-12 months.
"Following the relief rally in EUR/CHF since early summer 2020, spot has been unchanged and intervention remains the key policy tool. Swiss policy rates are thus set to stay unchanged at the longstanding -0.75%. Going into Q1, EUR/USD took a step lower and with it EUR/CHF too. Currently, upside risk to European inflation and demand seems very limited (due to lockdowns). In turn, the near-term potential to see a weaker CHF also appears limited," Danske notes.
"We see balanced risks to EUR/CHF near term. If EUR/CHF is to move higher, it would be likely to happen in tandem with opening up the European economy from H2 onward," Danske adds.
FXStreet reports that economists at Standard Chartered expect the EUR/USD pair is set to see dips but should hold above the 1.2000 level.
“We expect USD to move lower through 2021, but also expect short-term rebounds along the way. We see EUR/USD long positions being, by far, the most elevated and significant for broad USD. In that context, additional drivers of a near-term decline are likely to be a recent rise in US Treasury yields, a steeper US yield curve and a widening yield differential. The large fiscal stimulus planned by the incoming Biden administration could potentially boost short-term US sentiment and economic outperformance.”
“We expect robust supports around 1.2060 and 1.2000. A mild USD rally could end there. A break lower would suggest a deeper decline into 1.1600-1.1900 window.”
According to the report from Eurostat, in November 2020 compared with October 2020, seasonally adjusted production in the construction sector increased by 1.4% in the euro area and by 1.2% in the EU. In October 2020, production in construction remained stable in the euro area and increased by 0.7% in the EU. In November 2020 compared with November 2019, production in construction decreased by 1.3% in the euro area and by 1.1% in the EU.
In the euro area in November 2020, compared with October 2020, civil engineering increased by 3.1% and building construction by 1.0%. In the EU, civil engineering increased by 3.0% and building construction by 0.7%.
In the euro area in November 2020, compared with November 2019, building construction decreased by 1.6% while civil engineering increased by 0.4%. In the EU building construction decreased by 1.2% and civil engineering by 0.2%.
According to the report from ZEW, the Indicator of Economic Sentiment for Germany increased in the current January 2021 survey, climbing 6.8 points to a new reading of 61.8 points. The assessment of the economic situation in Germany increased somewhat, and currently stands at minus 66.4 points, 0.1 points higher than in December 2020. “Despite the uncertainty about the further course of the lockdown, the economic outlook for the German economy has improved slightly. The results of the ZEW Financial Market Survey in January show that export expectations in particular have risen significantly,” comments ZEW President Professor Achim Wambach on the current expectations.
The financial market experts’ sentiment concerning the economic development of the eurozone increased by 3.9 points, bringing the indicator to a new level of 58.3 points in January. In contrast, the indicator for the current economic situation in the eurozone dropped by 3.2 points and now stands at minus 78.9 points.
Inflation expectations are experiencing a strong increase. For the eurozone, expectations have risen by 10.9 points to a new indicator value of 51.6 points. The inflation indicator for Germany is at 58.2 points in January, 18.6 points higher than in December 2020.
FXStreet reports that according to the MUFG Bank, Yellen’s hearing is set to provide more insights on USD policy under the Biden administration but is unlikely to prove market-moving for the US dollar.
“It has been reported in advance of the hearing that Janet Yellen will argue that ‘the smartest thing we can do is act big’ as she seeks support for the Biden administration’s proposed $1.9 trillion COVID-19 relief package.”
“The increasing likelihood of bigger fiscal stimulus including infrastructure investment is supportive for commodity prices and related currencies. We continue to see scope for further gains in commodity-related currencies in the year ahead which should benefit as well from the strengthening global recovery once vaccines are rolled out more widely.”
“The Biden administration is expected to support a strong US dollar policy. However, we do not believe that fundamentals are as supportive for a strong US dollar, and continue to expect further weakness in the year ahead.”
According to the report from European Central Bank, the current account of the euro area recorded a surplus of €25 billion in November 2020, decreasing by €1 billion from the previous month. Surpluses were recorded for goods (€34 billion), services (€9 billion) and primary income (€1 billion). These were partly offset by a deficit for secondary income (€20 billion).
In the 12 months to November 2020, the current account recorded a surplus of €231 billion (2.0% of euro area GDP), compared with a surplus of €278 billion (2.3% of euro area GDP) in the 12 months to November 2019. This decline was driven by reductions in the surpluses for services (down from €65 billion to €26 billion) and for primary income (down from €53 billion to €24 billion). These developments were partly offset by a larger surplus for goods (up from €320 billion to €335 billion) and a smaller deficit for secondary income (down from €159 billion to €155 billion).
In financial account, euro area residents’ net acquisitions of foreign portfolio investment securities totalled €526 billion and non-residents’ net acquisitions of euro area portfolio investment securities totalled €231 billion in 12 months to November 2020
FXStreet reports that Commerzbank analysts discuss the outlook for EUR/USD
“EUR/USD has sold off to, tested and so far held the 55-day ma at 1.2058, intraday rebounds are indicated to struggle around 1.2140. Beyond the the 55-day ma at 1.2058 we would allow for losses to extend to 1.2014 the September high and even the 1.1969 2020-2021 uptrend, which we suspect will hold the initial test. Assuming that the uptrend (1.1969) and 23.6% retracement of the move up since March 2020 (1.1945) holds; medium-term the market continues to track higher whilst targeting the 1.2556 2018 high and 1.2624.”
|07:30||Switzerland||Producer & Import Prices, y/y||December||-2.7%||-2.3%|
During today's Asian trading, the US dollar fell against the euro, but rose against the yen.
The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell by 0.15%.
The market is focused on hearings in the US Senate Finance Committee, where Janet Yellen, ex-Chairman of the Federal reserve system, nominated by US President-elect Joe Biden for the post of Treasury Secretary, will speak.
The Senate Finance Committee must approve Yellen's candidacy for the post of head of the US Treasury before the issue is put to a vote in the Senate.
According to the text prepared for Yellen's speech, she will call on lawmakers to support large-scale measures to stimulate the economy. According to Yellen, the US economy could face a longer and more painful recession without new stimulus.
Yellen will also have to answer questions from senators, including possibly related to monetary policy. On the eve of the WSJ wrote, citing its sources, that Yellen will declare his commitment to the approach in which the dollar is regulated by the market.
According to the report from the European Automobile Manufacturers' Association (ACEA), in December 2020, demand for new passenger cars in the European Union declined by 3.3% to 1,031,070 units. The four largest EU markets, however, recorded very different results. Italy and France both suffered double-digit losses, with car registrations down 14.9% and 11.8% respectively, in the last month of the year. By contrast, Germany posted a solid gain (+9.9%) and Spain’s performance remained stable, as the number of registrations was more or less the same as in December 2019.
Looking at full-year 2020 results, the EU passenger car market contracted by 23.7% to 9.9 million units as a direct result of the COVID-19 pandemic. Indeed, containment measures – including full-scale lockdowns and other restrictions throughout the year – had an unprecedented impact on car sales across the European Union.
2020 saw the biggest yearly drop in car demand since records began, with new-car registrations falling by 3 million units compared to 2019. All 27 EU markets recorded double-digit declines throughout 2020. Among the region’s biggest car markets, Spain posted the sharpest drop (-32.3%), followed closely by Italy (-27.9%) and France (-25.5%), while full-year losses were significant but less pronounced in Germany (-19.1%).
According to the report from the Federal Statistical Office (FSO), the Producer and Import Price Index rose in December 2020 by 0.5% compared with the previous month, reaching 98.4 points (December 2015 = 100). Compared with December 2019, the price level of the whole range of domestic and imported products fell by 2.3%. The average annual inflation in 2020 reached –3.0%.
The average annual inflation for 2020 corresponds to the rate of change between the annual average for 2020 and that for 2019. The annual average is equal to the arithmetic mean of the 12 monthly indices of the calendar year. The decline of 3.0% in 2020 is due in particular to lower prices for petroleum products and pharmaceutical products. While prices for domestic producers declined by 1.6%, import prices fell by 5.6%. The average annual inflation reached –1.4% in 2019 and +2.4% in 2018.
In particular, higher prices for petroleum products and scrap were responsible for the increase in the producer price index compared with the previous month. Non-ferrous metal products also increased in price. In contrast, price decreases were seen for slaughter pigs and pork. In the import price index, increasing prices compared with November 2020 were seen in particular for petroleum products, petroleum and natural gas as well as basic metals and semi-finished metal products. Higher prices were also seen for motor vehicles and motor vehicle parts. In contrast, pharmaceutical preparations were cheaper.
According to the report from the Federal Statistical Office (Destatis), consumer prices in Germany rose by 0.5% on an annual average in 2020 compared with 2019. The increase was markedly below the relevant level in the previous year (2019: +1.4%). Destatis also reports that a lower annual rate of price increase was last measured in 2009 during the financial and economic crisis (+0.3%). In December 2020, the inflation rate, measured as the year-on-year change in the consumer price index, stood at -0.3%. This was the fifth time that the rate was negative in 2020.
One of the reasons for the low annual rate of price increase was the temporary value added tax reduction. This measure of the Federal Government's stimulus package was implemented on 1 July 2020. It had a downward impact on the consumer prices as a whole and differing effects on the individual groups of products in the second half of 2020.
The prices of energy products were markedly down by 4.8% in 2020 year on year, following a 1.4% rise in 2019. Declining prices were especially recorded for heating oil (-25.9%) and motor fuels (-9.9%).
Food prices rose above average in 2020 compared with 2019 (+2.4%). The price increase slowed during the year when the value added tax rates were reduced.
In 2020 the prices of goods (total) were down by 0.4% on 2019. The prices of services (total) rose above average by 1.3% (including net rent exclusive of heating expenses: +1.4%) on an annual average in 2020 compared with 2019.
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.2094
Support levels (open interest**, contracts):
- Overall open interest on the CALL options and PUT options with the expiration date February, 5 is 47865 contracts (according to data from January, 15) with the maximum number of contracts with strike price $1,2000 (3260);
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.3607
Support levels (open interest**, contracts):
- Overall open interest on the CALL options with the expiration date February, 5 is 10966 contracts, with the maximum number of contracts with strike price $1,4000 (1724);
- Overall open interest on the PUT options with the expiration date February, 5 is 19419 contracts, with the maximum number of contracts with strike price $1,2500 (2183);
- The ratio of PUT/CALL was 1.77 versus 1.78 from the previous trading day according to data from January, 15
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
|07:00 (GMT)||Germany||CPI, m/m||December||-0.8%||0.5%|
|07:00 (GMT)||Germany||CPI, y/y||December||-0.3%||-0.3%|
|07:30 (GMT)||Switzerland||Producer & Import Prices, y/y||December||-2.7%|
|09:00 (GMT)||Eurozone||Current account, unadjusted, bln||November||34.1|
|10:00 (GMT)||Eurozone||Construction Output, y/y||November||-1.4%|
|10:00 (GMT)||Eurozone||ZEW Economic Sentiment||January||54.4|
|10:00 (GMT)||Germany||ZEW Survey - Economic Sentiment||January||55.0||60|
|13:30 (GMT)||Canada||Manufacturing Shipments (MoM)||November||0.3%|
|18:00 (GMT)||United Kingdom||MPC Member Andy Haldane Speaks|
|21:00 (GMT)||U.S.||Net Long-term TIC Flows||November||51.9|
|21:00 (GMT)||U.S.||Total Net TIC Flows||November||-10.4|
|23:30 (GMT)||Australia||Westpac Consumer Confidence||January||112|
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