Global Equities Rise with US Dollar Pushing Higher
02 Feb 2021 · 3rd Party Analysis
- Global stocks rise across the board
- US dollar ticks higher, euro slides on internal confrontations
Tuesday Market Outlook
Global markets saw some positive momentum yesterday. Both the Euro and Dollar market climbed considerably as investors decided to flock into riskier assets to kick off the week. Renewed hopes for a stimulus package, progress over vaccine rollout, and a decreased volatility in retail trading buoyed equities as the dollar advanced against its competitors. Tuesday markets remain positive as DAX, CAC40, and FTSE100 all point higher by roughly 1.00% each.
Later on Monday, silver pulled back from its intraday tops. Silver was able to reach a 6-month top and go over $30. The 13% rally in a few hours was a result of increased buying momentum from the retail community, which is targeting silver as the next short squeeze. Off its highs, silver is now trading towards the $28.50 level. The trading session for gold was much more muted yesterday, up some 1.3% at most, climbing from $1,847 to $1,871. Gold is now hovering below $1,860.
The dollar advanced by 0.66% against the euro as the EURUSD pair reached a low of 1.2056. The British pound remains well bid, currently in the area of 1.3650 to 1.3700 against the US dollar. The UK’s currency is holding strong as the country’s vaccine program is progressing more successfully than the rollouts in the US and Europe. The euro weakened across the board as a result of a vaccine shortage and internal disturbances.
Covid Tracking Project & Stimulus Aid
Over to the US, President Biden continues to press forward in his attempt to secure a $1.9tn fiscal stimulus to aid the faltering US economy. He has vowed to do it even if he has to bypass Senate Republicans who oppose a large portion of the measures in the plan. One of the most disputed measures drafted in the proposal is the size of the stimulus checks to individuals.
As market participants remain optimistic over the stimulus package, the US recorded its deadliest month during the pandemic. According to the Covid Tracking Project, the figures reveal that 94,357 coronavirus fatalities were recorded in the US for January. When it comes to new infections, the US seems to have gotten off its highs as around 100,000 to 120,000 new cases per day have been reported in the last several days.
As the week unfolds, traders and investors remain focused on the companies that are reporting quarterly results. After the closing bell on Tuesday, Google-parent Alphabet and Amazon report their fourth-quarter results. The shares for both companies ended the session on Monday sharply higher. Amazon stock closed higher by 4.26% while Google climbed 3.60%. Tech stocks led the rise in Nasdaq Composite yesterday as the benchmark index rose 2.55%.
The earnings season continues this week as the market will be looking to find out the latest figures of Alibaba, BNP Paribas, Ferrari, and many more. In addition, the US Labor Department is set to report the latest NFP and unemployment data on Friday. The most important monthly economic indicator will reveal how the US economy performed during January. Last month was the first negative one in an eight-month period. The country lost 140,000 jobs in December while the unemployment rate remained unchanged at 6.7%.