Overnight Highlights
U.S. financial markets were closed for a day on Monday, Jan. 18, in observance of Martin Luther King Jr. Day.
EU member states will seek to extend approval of the EU-UK free trade deal from February to April in a bid to give member states and the European Parliament more time to assess the treaty while allowing time for text translation, according to people familiar with the matter.
The European Commission will ask to block all non-essential travel, the EU has pledged to reach consensus on vaccination certificates by the end of January, the EU will tell member states that they must complete vaccination of 70% of the population by summer, German Finance Minister Scholz said every effort must be made to boost vaccine production; the UK expanded its vaccination program to the over 70s and the clinically highly vulnerable.
European stocks turned up at the end of the day but British stocks fell, Carrefour fell nearly 7% to lead the broader market, Stellantis rose 7% on its first day of trading
Despite positive economic data from China, concerns about the resurgence of the global new crown epidemic quickly dissipated optimistic expectations for a rapid economic recovery. Overnight the Nikkei 225 fell 1% and off a new 30-year high, while the MSCI ACWI Global Index edged lower, falling for a second day and off an all-time high.
European stocks opened lower on Monday, the pan-European Stoxx 600 index turned higher at the end of the day, the auto sector led the broader market with a gain of more than 1%, the utilities sector fell more than 1%. Germany, France, Italy and other countries stock indexes were higher in late trading, but the UK FTSE 100 index maintained a decline. In addition, the three major U.S. index futures fluctuated and edged up at the close of European stocks.
By the close of trading, the FTSE Pan-European Outperform 300 index closed up 0.12% at 1575.71 points. Europe’s STOXX 600 index closed up 0.20% at 408.68 points. The Eurozone STOXX 50 index closed up 0.09% at 3602.67 points.
Germany’s DAX 30 index closed up 0.44% at 13848.35 points. France’s CAC 40 index closed up 0.10% at 5617.27 points. Britain’s FTSE 100 index closed down 0.22% at 6720.65 points. Italy’s FTSE MIB index closed up 0.53% at 22,498.89 points.
On Friday, the Stoxx 600 index stopped its three-member positive streak, hitting the biggest drop in three weeks and ending a four-week winning streak, falling more than 1% on the day to a new closing low since Jan. 6 and retreating from a new high since Feb. 21, 2020. Last week, German, French, British and Italian stock indexes all fell nearly 2%.
International oil prices collectively fell more than 1% to a one-week low during the session as the resurgence of the epidemic triggered demand concerns
U.S. oil WTI February contract fell as deep as $0.60 or 1.1% during the day, once below the $52 integer level, the daily low to $51.76, down two days in a row and traded at a one-week low since January 11, from last week’s 11-month high. International Brent fell as deep as $0.61 or 1.1% during the day, falling below the $55 level to a daily low of $54.49, the lowest since Jan. 8.
On Friday, WTI February crude oil futures closed down $1.21, or 2.26%, at $52.36 per barrel, up 0.23% for the week and up three weeks in a row. Brent March crude oil futures closed down $1.32, or 2.34%, the largest closing decline since December 21, at $55.10/barrel, down 1.57% for the week and ending a two-week winning streak.
Analysts said the resurgence of the new crown outbreak in major countries around the world has renewed market concerns about oil demand conditions. Jeffrey Halley, senior market analyst at agency OANDA, noted that the relative strength indexes of the main international crude oil futures contracts are all in overbought territory and could trigger a correction. However, Norges Bank has raised its price expectations for Brexit, believing that oil demand will approach 100 million barrels per day this year.
Spot gold rebounded from a month-and-a-half low, most of the domestic black market closed lower, while copper rebounded from a four-day low
Spot gold rose as high as 0.7% during the day, once surpassing the $1840 integer level, ending two consecutive losses and rebounding slightly from the one-and-a-half month low hit on Friday. Last week, gold fell 0.3% and fell for two weeks, mainly due to the strength of the dollar dragged. Spot silver rose as high as 1.5% to regain above the $25 round figure. DBS believes that the U.S. fiscal stimulus and dovish Fed to provide support for gold prices.
Most of the domestic black futures closed lower overnight, with coke and power coal both down more than 2%, thread futures closed down 1.12% overnight, hot coils down 1.25% and coking coal down 1.68%, but iron ore futures closed up 0.80%.
Copper futures rose, rebounding slightly from a four-day low, having stopped a three-day streak and closed down $100 on Friday. Shanghai copper closed up 0.39%, Shanghai aluminum closed down 0.33%, Shanghai zinc closed up 0.02%, Shanghai lead closed down 0.23%, Shanghai nickel closed up 0.61% and Shanghai tin closed up 0.46%.
Dollar turns lower after hitting four-week high, Italian political turmoil sends euro to six-week low, bitcoin below $36,000
The dollar index rose as much as 0.2% on Monday to stand at a new four-week high since Dec. 21, but turned lower after European stocks closed.
Europe’s tightening blockade due to the resurgence of the epidemic and Italy’s political turmoil both weighed on the euro, which fell to a six-week low of 1.2055 against the dollar and hit a one-month low against the yen.
The dollar fell 0.2% against the yen, still standing firm above the 103 mark. The pound fell 0.5% against the dollar to a one-week low of 1.3521. The Australian dollar, which is more sensitive to risk sentiment, fell to a one-week low against the dollar, and the New Zealand New Zealand dollar fell to a three-week low against the dollar.
Investors are watching the speech of U.S. Treasury Secretary-designate Yellen, who will appear at a U.S. Senate nomination hearing on Tuesday. Media said she will reiterate that the market determines exchange rates and make clear that the U.S. will not seek to devalue the dollar for competitive advantage.
But investors are still focused on betting on a falling U.S. dollar. net short positions held by hedge funds rose to the highest in nearly three years since April 2018 in the week of Jan. 12. Analysts said that the unexpected decline in U.S. retail sales in December for the third consecutive month, combined with the resurgence of the epidemic, have called into question the U.S. economic recovery; the Biden administration is expected to expand fiscal stimulus, which will trigger reflation and elevated risk appetite, and the dollar will continue to fall.
The onshore yuan closed at 6.4921 yuan against the dollar (CNY) at 23:30 GMT, down 104 points from Friday’s overnight close. Volume was $41.005 billion, up $10.040 billion from Friday.
At around 7:12 a.m. Eastern on Monday, bitcoin briefly moved higher by more than $800 in 15 minutes, back above $37,000, up more than 4% intraday. According to Coindesk data, European shares fell below $36,000 after the close, with intra-day gains narrowing to near-flat.
Bitcoin had risen above $40,000 on Jan. 8 and touched that mark again on the 14th. Bitcoin fell more than $5,000 intraday on the 15th, once below $34,400, and fell more than $3,000 for the week, the worst single-week performance in four months.
Europe’s major bond yields all down, British bond yields fell for four days in a row
The 10-year German bond yield once rose 0.9 basis points during the day to a daily high of -0.515%, European shares turned lower at the end of the day, trading at -0.528%. 10-year British bond yields fell for four consecutive days, the deepest down 0.9 basis points during the day and fell below 0.28%, refreshing more than a week low.
On Friday, U.S. bond prices rebounded, yields fell back, December retail sales data is poor to stimulate risk aversion, 10-year U.S. bond yields once fell below 1.09%, intra-day drop of more than 4 basis points, all week the term of the U.S. bond yields are cumulative decline.
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