Mario Draghi Takes Centre Stage, Mixed UK Data

US Equities Stall

The US equity market managed to squeeze some gains before the closing bell. Only DJIA remained virtually unchanged for the day. Yesterday’s US trading session reminded more of a roller-coaster ride, with investors being undecided what to do next. Most likely that the released numbers for the US initial and continuing jobless claims weighed in negatively, as they showed slight increases. More people lost their jobs and more people continued to claim unemployment benefits. Yesterday’s figures broke the 3-weeks-in-a-row streak of positive claims data. It looks like market participants are taking a break from pushing US indices higher, as they wait for the next positive catalyst. The catalyst could be related to the news surrounding Biden’s stimulus bill, or the roll-out of vaccines.

A New Chapter In Draghi’s Career

Over in Europe, the big news came from Italy, where the former ECB President, Mario Draghi, came closer to becoming Italy’s Prime Minister. Because Italy’s government was already heavily divided, Mario Draghi is seen as a saviour, who can unite all the rival parties. Mr Draghi is seen as a respectful persona in Italy, who already had backing from two Italian parties, the League Party and the Democratic Party. And everything went even better for Draghi, when Italy’s top party, the 5-Star Movement, voted for his designation. This now means that he is only a few steps away from becoming the Italian Prime Minister. Italy’s President, Sergio Mattarella, called on Mr Draghi to present the list of ministers for his new cabinet on Friday. Also, next week, Mario Draghi will have to present his policy program, which will have to be approved by both houses.

EUR/USD — Technical Outlook

After breaking above its short-term tentative downside resistance line, drawn from the high of January 6th, the pair moved a bit further north, but since yesterday, it continues to move sideways, roughly between the 1.2113 and 1.2149 levels. Given the break of that downside line, there is a chance to see a move higher. But in order to get comfortable with that idea, a push above the upper side of the range would be needed. Until then, we will take a neutral stance.

Euro Stoxx 50 — Technical Outlook

Although Euro Stoxx 50 continues to trade above a short-term tentative upside support line, drawn from the low of January 29th, the index is still struggling to overcome one of its key resistance barriers, at 3682. That barrier marks the current highest point of February. In order to get comfortable with higher areas, we would need to wait for a break above that resistance barrier first. Until then, we will take a cautiously-bullish approach.

Norway and UK GDP Figures

Norway released its GDP figures for Q4 this morning. The headline QoQ and YoY readings showed up at +0.6% and -0.6% respectively. The Mainland QoQ one managed to beat its initial forecast of +1.2%, and came out at +1.9%.

As For The Rest Of Today’s Events

Today, the Chinese market remained closed due to the Chinese New Year celebration. Hong Kong market was also be closed in relation to the Lunar New Year celebration.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
JFD

JFD

JFD is a leading Group of Companies offering financial and investment services and activities.