Forex News

Consumer prices in Montenegro decreased 0.9 percent year-on-year in December of 2020, after falling 1 percent in the prior month. Prices declined mostly for transport (-7.8 percent vs -8.5 percent in November), namely fuels & lubricants; clothing & footwear (-2.2 percent vs -3.4 percent), mostly garments; housing & utilities (-1.1 percent vs -1 percent), especially solid fuels; and restaurants & hotels (-2.8 percent vs -2.8 percent) mainly accommodation services. At the same time, inflation slowed for food & non-alcoholic beverages (1 percent vs 1.2 percent), amid lower costs of meat, fruits, and vegetables. On a monthly basis, consumer prices went up 0.1 percent, following a 0.3 percent drop in the previous month.

The FTSE MIB erased early gains to close 0.3% lower at 22,442 on Tuesday, as investors remained cautious ahead of Italian Prime Minister Giuseppe Conte's vote of confidence in the upper house later today, with some reports suggesting several unaligned senators would abstain to avoid the collapse of the minority government amid the COVID crisis. Conte has won the backing of the lower house of parliament on Monday, days after Matteo Renzi's Italia Viva party withdrew its support from the government's coalition over the prime minister’s handling of the pandemic and ensuing recession. Elsewhere, US President-elect Joe Biden's nominee for Treasury Secretary, Janet Yellen, told the Senate Finance Committee that “the smartest thing we can do is act big” with the coronavirus relief plan.

The IBEX 35 fell 0.7% to close at 8,199 on Tuesday, its lowest level since January 5th, as concerns over rising coronavirus infections and prolonged lockdowns offset prospects of a swift economic recovery under the new US administration. President-elect Joe Biden's nominee for Treasury Secretary, Janet Yellen, told the Senate Finance Committee that “the smartest thing we can do is act big” with the coronavirus relief plan. Meanwhile, Spain's Health Ministry reported 84,287 new infections since Friday, the biggest weekend increase since the beginning of the pandemic. On a brighter note, Prime Minister Pedro Sanchez announced that the government had reached an agreement with unions and business groups to extend a support scheme for hundreds of thousands of workers furloughed due to COVID-19 until May.

Silver was little changed around $25.3 an ounce on Tuesday amid a slightly weaker dollar as investors digest Janet Yellen's hearing before the Senate. The incoming Treasury Secretary said the value of the USD and other currencies should be determined by markets and that she believes parts of 2017 tax cuts for wealthy Americans and large companies should be repealed although Joe Biden does not support complete repeal. She also added that without more aid, the economy would have to worry about scarring and other problems. Meanwhile, investors continue to monitor rising coronavirus cases and the impact it will have on the global economy and lingering uncertainty and security concerns ahead of President-elect Joe Biden inauguration on Wednesday.

The CAC 40 ended lower at 5599 on Tuesday, in line with most of its European peers, as investors digest rising coronavirus cases and infections and prospects of a swift economic recovery under the new US administration. Autos were mainly lower as fresh data showed EU car registration fell at a record pace in 2020. On the other hand, Sanofi was among the top performers after the UK's Medicines and Healthcare Products Regulatory Agency has granted a Promising Innovative Medicine to Nirsevimab, an antibody to prevent RSV infections.

Spot gold traded higher around $1841 an ounce on Tuesday, but pared some early gains as investors digest Janet Yellen's hearing before the Senate. The incoming Treasury Secretary said the value of the USD and other currencies should be determined by markets and that she believes parts of 2017 tax cuts for wealthy Americans and large companies should be repealed although Joe Biden does not support complete repeal. She also added that without more aid, the economy would have to worry about scarring and other problems. Meanwhile, traders continue to monitor rising coronavirus cases and the impact it will have on the global economy and lingering uncertainty and security concerns ahead of President-elect Joe Biden's inauguration on Wednesday.

European stocks ended Tuesday's session lower, with Frankfurt's DAX 30 retreating 0.2% at 13,823 and other major indexes falling between 0.1% and 0.7%. Germany is expected to extend and tighten the current lockdown until mid-February, as authorities remain concerned about new variants that appear to be more contagious. Elsewhere, President-elect Joe Biden's nominee for Treasury Secretary, Janet Yellen, told the Senate Finance Committee that “the smartest thing we can do is act big” with the coronavirus relief plan. Meanwhile, investors await Biden's inauguration on Wednesday. On the economic data front, new passenger car sales in the European Union shrank at a record pace in 2020; while Germany remained in deflation territory in December for a fourth straight month.

Russia's current account surplus narrowed to USD 5.5 billion in the fourth quarter of 2020, from USD 10.9 billion in the same period last year, a preliminary estimate showed. The goods surplus fell sharply to USD 21.5 billion from USD 41.0 billion a year ago as exports tumbled 18.8 percent and imports declined 2.5 percent. Meanwhile, the services deficit shrank to USD 5.4 billion from USD 10.0 billion, the investment income gap was down to USD 8.1 billion from USD 14.0 billion, and the secondary income deficit dropped to USD 2.3 billion from USD 4.9 billion. Considering 2020 full year, the current account surplus narrowed to USD 32.5 billion from USD 64.8 billion in 2019.

The dollar index retreated further to 90.5 on Tuesday from a 5-week high of 90.9 hit in the previous session, as investors digest Yellen's Senate confirmation hearing. Janet Yellen, who is Biden's nominee for Treasury Secretary, said the value of the USD and other currencies should be determined by markets and that she believes parts of 2017 tax cuts for wealthy Americans and large companies should be repealed although Joe Biden does not support complete repeal. She also added that without more aid, the economy would have to worry about scarring and other problems.

The FTSE/JSE All Share Index in South Africa dropped 0.2% to 63,603 on Tuesday, but close to record levels touched in the previous week. Investors remained concerned about rising COVID-19 infections, the slow pace of vaccine procurement and the negative impact of tighter restrictions. On the macro front, mining activity in South Africa continued to fall for the ninth consecutive month in November and at the quickest pace since June, worse than market forecasts. Investors now wait for the releases of inflation data and retail sales figures for more clues about the performance of South Africa's economy in the last quarter of 2020. At the same time, the South African Reserve Bank is expected to hold the repo rate at a record low of 3.5% on Thursday, while there is still a chance of a rate cut due to recent bleak economic data. Meanwhile, market sentiment was tempered by expectations of further fiscal stimulus under Biden's administration.

Russia's consumer confidence indicator declined 4 points from the previous period to -26 in the fourth quarter of 2020, remaining well below pre-pandemic levels, amid a deterioration in expectations regarding the country's economic situation (-7 points) and households' financial situation (-4 points). At the same time, the gauge for large purchases dropped 3 points.

US stocks pared some early gains on Tuesday with the Dow gaining less than 90 points after jumping more than 200 points at the open as investors digest Janet Yellen's Senate confirmation hearing. Yellen, who is Biden's nominee for Treasury Secretary, said the value of the USD and other currencies should be determined by markets and that she believes parts of 2017 tax cuts for wealthy Americans and large companies should be repealed although Joe Biden does not support complete repeal. She also added that without more aid, the economy would have to worry about scarring and other problems. Meanwhile, the earnings season continues with earnings from Bank of America and Goldman Sachs beating forecasts while Netflix is due to report after the close. The S&P 500 was up 0.2% and the Nasdaq 0.4%.

The number of people infected with the coronavirus in the US rose by 141,999 on Monday, bringing the nationwide total to 24.1 million, according to data released by the Johns Hopkins University. California, the nation's most populous state, has become the first state to record more than 3 million cases. The count is followed by other large states, such as Texas, with more than 2 million cases, and Florida, with nearly 1.6 million infections. New York and Illinois have also reported more than 1 million cases since the pandemic started last year. The number of deaths from Covid-19 has already reached 399,003, and president-elect Joe Biden’s team has projected another 100,000 fatalities in the first five weeks of the administration. So far 14.7 million doses of the Covid-19 vaccine have been administered, according to data from the Centers for Disease Control and Prevention. Biden has vowed to get 100 million COVID-19 vaccine doses injected into Americans in his first 100 days in office.

The Brazilian real traded lower at 5.3 per USD, amid lingering concerns over rising coronavirus and uncertainty about domestic vaccination. Meanwhile, the country's policymakers are set to leave interest rates at record-low levels when they meet on Wednesday, but will likely emphasize the need for policy normalization in response to quickly developing inflation pressures. Brazil's annual inflation accelerated to 4.5% in December, remaining above the central bank's target of 4% for 2020 and opening the door for higher interest rates this year. The Selic rate has been anchored at a record low of 2% since August, but the central bank indicated late last year that it may begin tightening policy sooner against a backdrop of bubbling inflation pressures and fiscal concerns.

The FTSE 100 cut gains to close slightly lower at 6,713 Tuesday, led by a 12% plunge in shares of Ladbrokes owner Entain after MGM abandoned its takeover bid. Meanwhile, incoming Treasury Secretary Janet Yellen told the Senate Finance Committee that a large US stimulus package is needed. Early gains were helped by a rebound in tourism-related stocks amid reports of an increase in bookings as Covid-19 vaccines are rolled out in the UK.

European stocks erased early gains to trade near the flat line Tuesday, with the DAX 30 edging 0.1% lower at 13,830 as Chancellor Angela Merkel and leaders of Germany’s 16 states are expected to extend and tighten a partial lockdown until mid-February, as authorities remain concerned about new variants that appear to be more contagious. Elsewhere, investors awaited Janet Yellen’s confirmation hearing to become US Treasury secretary later today and US President-elect Joe Biden's inauguration on Wednesday. Yellen will probably tell the Senate Finance Committee that “the smartest thing we can do is act big” with the coronavirus relief plan. On the economic data front, new passenger car sales in the European Union shrank at a record pace in 2020; while Germany remained in deflation territory in December for a fourth straight month.

USDARS increased to an all-time high of 86.19

Brazil's Ibovespa traded in the red on Tuesday, with commodity-related shares such as Vale and Companhia Siderurgica Nacional among the worst performers as investors paused for breath following the recent rally. Meanwhile, concerns over COVID-19 numbers and uncertainty about the pace of vaccination persist. Brazil kicked off a nationwide COVID-19 immunization program on Monday by distributing doses of a vaccine from China’s Sinovac Biotech following an emergency use authorization, although the rollout is expected to be painfully slow amid shortages of vaccines. On the monetary policy front, Brazil’s central bank is expected to hold its benchmark rate steady at an all-time low of 2% on Wednesday, but will likely emphasize the need for policy normalization in response to inflationary pressures. Elsewhere, traders tried to focus on prospects of economic recovery under Biden's administration.

WTI crude futures were up more than 1% to $52.8 a barrel on Tuesday, amid optimism that US fiscal stimulus will support global economic growth and crude demand. Investors now anticipate US President-elect Biden’s inauguration speech on Wednesday for details on the country’s $1.9 trillion aid package. Limiting the rise was concerns about rising COVID-19 cases globally and renewed lockdown measures. Meanwhile, the IEA cut its oil demand forecast for 2021 to 96.6 million barrels, down 0.3 million barrels from the previous estimate.

The TSX traded slightly higher on Tuesday, amid rising oil prices and as investors try to shrug off rising coronavirus infections and restrictions and focus on US fiscal stimulus. On the data front, wholesale trade grew for the seventh consecutive month in November while manufacturing sales decreased for the first time in three months