U.S. Review
U.S. Manufacturers Facing Headwinds
- U.S. manufacturers were already struggling with a stronger U.S. dollar when the currency appreciated further against the euro and Canadian dollar as central bankers in those regions made unexpected moves. The negative effects of oil are also starting to show up in regional manufacturing surveys.
- Housing starts improved in December with upward revisions to the prior month. Unfortunately, permits look a bit weaker, suggesting starts could see some payback in the coming months. Homebuilder sentiment did not add much optimism to the housing market recovery.
Global Review
Slow Growth in China and Central Banks Step Up Easing
- At the start of this week, the IMF downgraded its forecast for global growth citing among other things "a reassessment of prospects in China" and it cautioned advanced economies that "monetary policy must stay accommodative."
- The year-over-year rate of Chinese GDP growth released this week was a shade stronger than the consensus expected, but the sequential growth rate shows that growth is slowing.
- The European Central Bank embarked on an ambitious quantitative easing program and the Bank of Canada surprised financial markets with an unexpected rate cut.
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Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.