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Market Update
The British pound currency and the FTSE 100 index have failed to react this morning after UK fourth-quarter and monthly Gross Domestic Product data came in better than many economists had been predicting.
Sterling has slipped below the 1.3800 support level this morning, while the FTSE 100 continues to struggle above the 6,500-benchmark level. UK Q4 GDP came in at +1.0, beating the markets expectations of a +0.5% increase.
Monthly UK GDP data recorded a +1.2% headline number, with improved service sector data helping to lift the monthly figure. Sterling traders may be looking to buy into price dips towards the 1.3760 to 1.3750 area if the drop under 1.3800 gathers pace.
Bank of England Haldane has also been on the wires this morning stating he is bullish towards the United Kingdom once that virus restrictions are lifted. He also noted that in a year UK growth could be in double digits.
The EURUSD up move has started to show signs of upside exhaustion despite the Five-Star party backing former ECB President Mario Draghi to become Italian Prime Minister. Watch out for a breakout once the EURUSD moves either side of the 1.2110 to 1.2145 price range.
Most of the main European indices are called to open lower this morning following DR Fauci’s negative comments towards the South Africa COVID-19 variant yesterday and a lack of fresh stimulus news from the US.
Australia has also announced a new lockdown, following a rise in COVID-19 infections. This news is currently weighing on the AUDUSD and the ASX 200. Tepid trading ranges due to the Lunar New Year holiday also weighed on the market during the Asian session.
Bitcoin raced to a new all-time earlier today, following news that Mastercard is going to add cryptocurrencies to its payment network. The news was seen as a massive step towards mainstream adoption for the top crypto.
WTI oil is starting to weaken under the $48.00 level, following two-days of straight losses and a rejection from just under the $49.00 level. Prior to the latest pullback WTI oil racked up nine-straight days of gains.
Upcoming News
The main event on the economic docket today will be the release of the US Michigan Consumer Sentiment survey. Sentiment is tipped to come in at 80.80, which is a beat on the previous month. Traders and investors pay attention to sentiment due to the power of the US consumer, and the overall effect that consumption has on the US economy.
The US dollar currency could receive a boost is if the consumer sentiment number comes in a strong today. Stocks are also likely to receive a boost due to the consumptions story. We should expect the opposite reaction if US sentiment comes in weak today.
Aside from sentiment data, FED member William’s is also speaking later today. Expect William’s to stick to the dovish playbook and talk down the US economy. Traders should remember that there is also a G-7 finance minister meeting today.
