· Dollar stands stall as global stock rally fizzles
The dollar extended gains against most currencies on Thursday as a stock market rout triggered by concerns about excessive valuations boosted safe-harbour demand for the U.S. currency.
The euro nursed losses after a European Central Bank member warned that interest rate cuts are possible to curb the common currency’s recent gains.
The Australian and New Zealand dollars, two currencies considered a barometer of risk appetite, also fell against their U.S. counterpart in a sign of waning market confidence.
Concerns about a short-squeeze among hedge funds, worries about corporate earnings, and delays in coronavirus vaccinations have slammed the brakes on a heady rally in global equities, which could continue to lift the dollar in the short term.
The dollar edged up to 104.27 yen following a 0.4% gain on Wednesday.
Against the euro, the dollar stood at $1.2094, close to a one-week high.
The British pound fell for a second consecutive session to $1.3673.
· The dollar index stood at 90.742, holding onto a 0.6% gain on Wednesday.
In addition to concerns about corporate earnings and the economic outlook, worries that hedge funds squeezed out of short positions in GameStop Corp and similar companies will take profits on other assets also fuelled risk aversion.
The U.S. Federal Reserve kept monetary policy unchanged as expected on Wednesday but did signal some concern about the pace of economic recovery, which some traders said is another negative factor.
U.S. gross domestic product data is due later on Thursday to gauge the strength of the world’s largest economy as it struggles with the coronavirus pandemic.
The onshore yuan briefly touched a one-week low of 6.4946 per dollar and other Asian currencies also fell against the dollar, highlighting strength in the greenback.
The Australian dollar fell to $0.7634, while the New Zealand dollar slid to $0.7135 as investors sold currencies with close ties to the global commodities trade to trim riskier positions.
· Low-cost airlines may be ‘better positioned’ for 2021 challenges
As the world races to roll out mass vaccination programs to combat Covid-19, analysts say more carriers will likely go bust this year and pre-pandemic demand won’t be returning anytime soon
· West Virginia governor claims if his state had enough doses by Valentine’s Day, ‘every person over 65 would be vaccinated’
· Dr. Fauci says Covid vaccines can be easily adapted to new variants, drugmakers working on boosters
Pfizer and Moderna’s current Covid-19 vaccines can be easily adapted to target new strains of the virus, something the drugmakers are already working on, White House health advisor Dr. Anthony Fauci said Wednesday.
New strains of the coronavirus have emerged in the United Kingdom, South Africa and Brazil that have given scientists some cause for concern. Although it’s no surprise the virus is mutating, researchers are quickly trying to determine what the changes might mean for recently developed lifesaving vaccines and treatments against the disease.
However, there is some good news: The newly developed mRNA technology used to make the vaccines from Pfizer and Moderna makes it easy to adapt to the new strains, Fauci said. He added that the drugmakers are already working to make so-called “booster” shots that will target the variant found in South Africa, which appears to be more problematic than the others.
· UK imposes 10-day quarantine for travellers from 30 countries
The British government has implemented new travel restrictions for UK citizens as well as foreign nationals entering the country in a bid to prevent the spread of mutant variants of the coronavirus.
Under the new measure, travelers returning from 30 “red list” countries will have to undergo a mandatory 10-day quarantine in government-provided accommodation.
· France reports nearly 27,000 new COVID-19 cases, biggest jump since November
France reported nearly 27,000 new confirmed COVID-19 cases on Wednesday, the biggest one-day jump since mid-November when France was in its second lockdown and a further sign that a tighter curfew is not containing the virus.
The health ministry reported 26,916 new confirmed COVID-19 cases, up from 22,086 on Tuesday and 26,784 last Wednesday, pushing the cumulative total over 3.1 million.
It is the third time since the end of December that France has reported more than 26,000 cases in a day and the highest tally since the more than 28,000 reported on Nov. 18.
· Australian state borders to reopen with zero local virus cases
Coronavirus-induced border restrictions separating Australia’s three most populous states were set to be eased, authorities said on Thursday, as the country recorded its 11th straight day of zero COVID-19 cases.
· Australia extends New Zealand 'travel bubble' pause amid new COVID-19 cases
· Security forces clash with protesters in locked-down Lebanon
· Vietnam reports first coronavirus outbreak in 55 days; highest single-day tally
The health ministry earlier on Thursday reported two locally transmitted cases, the country’s first in 55 days, one of which was exposed to an individual who had tested positive in Japan for the more contagious B.1.1.7 UK variant.
The 83 infections announced on Thursday, were a new record daily for Vietnam which has effectively closed its borders and avoided the larger epidemics seen by its neighbours. Previously the country had recorded just over 1,550 cases and 35 deaths since the virus was first detected.
· Philippine regulator approves emergency use of AstraZeneca vaccine
The Philippines' Food and Drug Administration (FDA) has approved the emergency use of AstraZeneca PLC's COVID-19 vaccine, the second to be approved in the Southeast Asian nation.
The known and potential benefits of AstraZeneca's COVID-19 vaccine outweighed the risks to date, FDA chief Rolando Enrique Domingo told a news conference.
The Philippines' FDA has previously approved Pfizer and BioNTech's coronavirus vaccine. COVID-19 vaccines from Russia's Gamaleya, China's Sinovac Biotech and India's Bharat Biotech are awaiting approval.
AstraZeneca's vaccine was easy to transport and store and did not require ultra-cold temperatures, Domingo said. "It also has very good protection against severe COVID-19," he said.
· U.S. economy likely logged its weakest performance in 74 years in 2020
The U.S. economy likely contracted at its sharpest pace since World War Two in 2020 as COVID-19 ravaged services businesses like restaurants and airlines, throwing millions of Americans out of work and into poverty.
The Commerce Department’s snapshot of fourth-quarter gross domestic product on Thursday is also expected to show the recovery from the pandemic losing steam as the year wound down amid a resurgence in coronavirus infections and exhaustion of nearly $3 trillion in relief money from the government.
Economists are forecasting that the economy contracted by as much as 3.6% in 2020, the worst performance since 1946. That would follow 2.2% growth in 2019 and would be the first annual decline in GDP since the 2007-09 Great Recession.
In the fourth quarter, GDP is estimated to have expanded at a 4% annualized rate, according to a Reuters survey of economists. The virus and lack of another spending package curtailed consumer spending, and partially overshadowed robust manufacturing and the housing market.
· Blinken says he has asked U.S. envoy to Afghanistan peace process to stay on and U.S. committed to Israel's security
· U.S. stands with SE Asian countries against China pressure, Blinken says
The United States rejects China’s maritime claims in the South China Sea beyond what it is permitted under international law and stands with Southeast Asian countries resisting its pressure, U.S. Secretary of State Antony Blinken said on Wednesday.
· China wants to work with foreign peers on anti-trust issues, central bank vice governor says
· China reports a growing shortage of factory workers
Manufacturers in China are finding it more difficult to hire workers.
The government’s fourth-quarter list of 100 jobs with the greatest labor shortage showed manufacturing-related positions accounted for 36, or more than a third, the Ministry of Human Resources and Social Security said Tuesday.
Among new additions to list, 15 were related to manufacturing. Sixteen other positions already on the list said the labor shortage was getting worse, according to the ministry.
· China 2020 fiscal spending up 2.8% y/y, revenue falls 3.9%
China’s fiscal revenue fell 3.9% in 2020 from a year earlier, while expenditure rose 2.8%, the finance ministry said on Thursday, underscoring the difficulties in government finances amid the COVID-19 pandemic.
However, as the world’s second-largest economy bounces back from COVID-triggered paralysis, growth in fiscal revenue accelerated to 5.5% in the fourth quarter, from 4.7% the previous quarter, the ministry said in a statement on its website.
China’s economy picked up speed in the fourth quarter, with growth beating expectations as it ended a rough coronavirus-striken 2020 in remarkably good shape and remained poised to expand further this year even as the global pandemic rages unabated.
· China warns that Taiwan independence 'means war'
China’s Defence Ministry said on Thursday that recent military activities in the Taiwan Strait were a response to interference by foreign forces and provocations by forces supporting Taiwan’s independence and that “independence means war”.
Ministry spokesman Wu Qian made the comments at a monthly news briefing in response to a question about recent stepped up Chinese military activity reported by Taiwan in the island’s air defence identification zone.
· South Korea's January exports likely to grow for third month underpinning recovery momentum: Reuters poll
South Korea’s exports likely expanded for a third straight month in January on continued strong chip sales and overseas demand, a Reuters poll showed on Thursday, underpinning export-led recovery hopes in the economy.
Overseas sales in the first month of 2021 were seen increasing 9.8% from a year earlier, according to a median estimate of 12 economists.
That would be slower than a 12.6% rise in December, when it marked the sharpest growth in over 2 years, but remaining on a recovery track that began in November.
· Global oil demand to rise, boosted by vaccine distribution and economy: WoodMac
Global oil demand is expected to rise by nearly 7% this year, boosted by quicker vaccine distribution and a better economic outlook, consultancy Wood Mackenzie said on Thursday.
Total liquids demand is expected to average 96.7 million barrels per day (bpd) in 2021, 6.3 million bpd higher than last year when the Covid-19 pandemic caused an unprecedented oil demand shock.
· Oil falls on demand fears, strengthening dollar
Oil slid in Asia morning trade on Thursday despite a huge drop in U.S. crude stock, as the strength in the U.S. dollar and fresh fuel demand worries due to travel curbs and delays with coronavirus vaccines weighed on prices.
U.S. West Texas Intermediate (WTI) crude futures fell 33 cents, or 0.62%, to $52.52 a barrel at 0452 GMT, erasing Wednesday’s gain.
Brent crude futures fell 36 cents, or 0.65%, to $55.45 a barrel, after losing 10 cents on Wednesday.
The oil market had been supported earlier this week by a surprisingly large decline in U.S. crude stockpiles in the week to Jan. 22, which analysts said was due to a pick up in U.S. crude exports and a drop in imports.
But attention is now turning back to demand concerns amid a rise in COVID-19 infections with contagious new variants, a slower rollout of vaccines in Europe, and travel curbs in countries such as China.
· CRUDE OIL TECHNICAL ANALYSIS
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WTI crude oil prices continue to hover just under highs from February 2020. Oil is pressuring the rising trendline from early November. A break under it would expose the 50-day Simple Moving Average which may reinstate the focus to the upside in the event of a turn lower. Uptrend resumption would on the other hand place the focus on the January 20th, 2020 high.
Reference: Reuters, CNBC, Libyanexpress, DailyFX
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