Its been a very quiet flat session in European dealing with equities slightly lower and currencies mixed as markets basically tread water ahead of US employment data later today.

On the eco front in Europe, the final PMI prints came in just a ta better at 45.2 versus 44.6 eyed, and in Germany, the unemployment change also posted better results at 62K versus 120K forecast. The data confirms the slow but clear return back to work and economic activity as the threat of virus recedes.

Still despite the rebound economic activity remains in contraction and it is likely to take months for activity in the EU to resume anything resembling pre-COVID levels. The EURUSD saw little reaction to the news but held at the 1.12000 level.

Equities were lackluster throughout staying slightly below yesterday’s close and weakened into the US open. Yesterday end of day ramp was likely driven by end of quarter window painting but now the markets must once again focus on growth in the US which looks problematic at best. The recent spike in coronavirus cases is already forcing some states to rethink their opening policies restricting restaurants, bars, and movie theaters from re-opening.

All of this start and stop policy change is likely to take its toll on business activity and although the market anticipates that today’s ADP labor data numbers will show a strong rebound to 2.8M jobs gained the market may look past the number if it anticipates that many of those jobs will be vulnerable to layoff the month following. If the number misses expectations it will provide a perfect excuse for even greater selling as stocks have not yet seen any correction after their massive rally over the past six weeks and it is long overdue.

Author

Boris Schlossberg

BKTraders and Prop Traders Edge

Boris Schlossberg was key speaker at the FXstreet.com International Traders Conferences 2010. Mr. Boris Schlossberg is a leading foreign exchange expert with more than 20 years of financial market experience.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.