Sentiment in the foreign exchange markets was quite mixed with the USDX index showing a continued weakness of the dollar on Thursday, while some emerging market pairs like the USD/ZAR recovered from their recent lows and were up by Friday morning with the USD/ZAR pair again moving past the 15.0-level.
UK retail sales data for December was rather disappointing, showing an improvement of 0.3% on a monthly basis, while analysts expected an improvement in excess of one per cent. With the positive sentiment cooling down by Friday morning, major indices were clearly in the red and the Germany 30 index traded at times already down by more than one per cent.
Crypto markets remain on the move with volatility clearly elevated as Bitcoin fell in one day from above $35k to just around $30k by Friday night and even lower later on. By Friday morning the biggest cryptocurrency in terms of market capitalization managed to recover to around $31k. Ethereum, which earlier this week reached a new all-time high, also declined significantly with the range between daily high and low on Thursday reaching 22 per cent.
On Friday German and EU services and manufacturing PMI numbers can be expected. From Canada data on retail sales will come in and later in the American trading session statistics on existing home sales and the weekly energy commodity inventory numbers from the Energy Information Administration (EIA) can be expected.
EUR/USD
Given the weakness of the greenback, the EUR/USD pair managed to recover and trade above 1.217 on Thursday and Friday morning. Following the meeting of the Governing Council of the European Central Bank (ECB) on Thursday, its president Christie Lagarde reiterated that the pandemic is still seen as a “serious risk” for the economy of the euro zone and given these circumstances “ample monetary stimulus” would remain “essential”. No change in interest rates was announced following the meeting.
The weekly jobless claims in the US remained elevated at 900 thousand over the past reporting week, which is still a small decline compared to the numbers of a week ago, but still elevated in comparison to the previous months when a recovery set in.
On Friday services and manufacturing PMI numbers from Germany and the EU can be expected, while in the US the existing home sales statistics for December will be released.
Gold
Gold prices ended the trading day on Thursday almost unchanged after reaching a new 13-days high. Other precious metals including silver and palladium were also trading lower by Friday morning. Platinum prices also were down by Friday after reaching a new 4-1/2 years high during the trading session on Thursday.
One fundamental factor which has in theory potential to affect gold prices are the yields on other assets, which are perceived to be ‘safe havens’ like US Treasury notes. The 10 year benchmark was up on Thursday, trading at times even above 1.11%.
On Friday weekly Commitment of Traders (COT) statistics from the US CFTC can be expected. These statistics published for many different futures including gold and silver show also the overall net speculative positions on those instruments on the relevant exchanges.
WTI Oil
Oil prices closed almost unchanged on Thursday but then strongly declined at night, with a barrel of WTI crude oil in the March future contract again traded below $53. Natural gas prices continued to decline now for the fifth day in a row with the February future down since the end of last week by more than 11 per cent.
A report by Reuters indicated that the compliance of the OPEC+ group dropped from 101% to 99%, but indicated also that its sources say that the final figure could change slightly. Meanwhile the Energy Information Administration (EIA) expects that in the first quarter of this year the WTI crude oil benchmark could average around $56 per barrel.
The weekly oil stockpile data from the Energy Information Administration (EIA) can be expected this week on Friday. Also on Friday the US Baker Hughes Oil Rig Count will be published. Last week the number of operating oil rigs reached yet another new high after the low from August last year.
US 500
US stock market indices like the US 500 and the US Tech 100 reached another all-time high on Thursday. However some of the gains were lost at the end of the day and the US 500 index settled lower for the day.
Especially oil service companies like Schlumberger (-4.00%) traded lower with the overall sector performance of the energy sector (US Energy ETF -3.25%) deep in the red, as the new US President took a hard stance on the sector and halted new oil and gas leases for 60 days. Schlumberger is expected to release its quarterly results before the market open on Friday.
Tesla (-0.77%) stocks performed relatively steady despite new reports that the maker of electric vehicles now announced price cuts in multiple European countries, which analysts attribute to the expanding number of competitive models offered by traditional car manufacturers.
One of the best-performing stocks on Thursday was Airbnb (+11.87%) with the stock price trading even more volatile than in the previous days and recovering from the losses on Wednesday. The stock price might be influenced by highly diverging analysts’ ratings with some suggesting a strong decline in terms of stock prices, while others saw the current price more or less as justified.
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