Fears could escalate at the weekly opening


What you need to know on Monday, February 1:

Investors attention was diverted away from the FX board, amid turmoil in equities. The American dollar benefited from a dismal market mood but traded within familiar levels against its European rivals. Commodity-linked currencies and the JPY were the most affected by risk-aversion.

Gamestop shares soared amid retail investors’ actions gathered on social media looking for a short squeeze. The stock collapsed on Thursday as different brokers put restrictions in place on options trading, taking new positions and hiked margin levels. The frenzy grew as restricting trading borders illegality.  Silver also fell under individual investors’ radar. The situation is far from over, and turmoil will likely extend into the upcoming days.   

Wall Street finished the week with sharp losses after reaching fresh January lows. US Treasury yields, however, ticked higher ahead of the close, posting modest gains on the back of generally encouraging US data.

 Vaccine-related news added to the dismal mood. The one-shoot from Johnson & Johnson has proven 66% effective in phase three trials, while Pfizer’s CEO  said  that “there is a high possibility that future variants will elude vaccines.”   Despite delayed delivery, vaccines are rolling out and hopes are that immunity will boost growth in the second half of this year.

On a positive note, the number of new coronavirus contagions keeps decreasing globally after peaking at 845K early on January to roughly 500K reported on Saturday. Still, tough restrictive measures remain in place, particularly in Europe, as several countries extended lockdowns or curfews throughout February.

Israel, the United Arab Emirates and the UK are the countries that have vaccinated the highest percentage of their population. The UK leading immunization may take a turn to the worst, as on Friday, the EU  imposed export restrictions on vaccines after accusing the British- AstraZeneca of favoring its home market, in detriment of its contracts with the EU

Australia announced a five-day lockdown in the Pert area amid a new coronavirus case in a hotel worker, those set to quarantine arrivals. Authorities fear it could be one of the contagious strains coming from the UK or South Africa.

Gold and Oil gave up on Friday, weighed by equities. The bright metal settled at $ 1,847.50 a troy ounce, while WTI finished at $52.10 a barrel.

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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