U.S. Review
Mixed Signals on the Domestic Front
- The U.S. economy grew at a 2.6 percent annualized pace in the final quarter of 2014. The outturn was weaker than expectations. Equipment spending fell at a 1.9 percent annualized pace as businesses put cap-ex plans on hold, in part, amid the steep drop in oil prices.
- The fourth decline in five months for durable goods orders this week offers no reason to expect investment spending to pick up meaningfully any time soon.
- On the upside, housing and consumer confidence figures reported this week highlight bright spots for future growth.
Global Review
Will Greece Leave the Eurozone?
- The rise to power of the far-left Syriza party in Greece has raised the specter of Greek default and exit from the Eurozone. It will be a game of brinkmanship between the Greek government and its creditors, which are mostly other European governments and the IMF, in the coming weeks and months.
- If Greece were to leave the Eurozone, the probability of an extreme market dislocation in Europe is lower today, than it was three years ago. There are now institutions in place to help prevent contagion spilling over to other countries.
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Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.