Dollar, Bitcoin, gold and stocks all retreat ahead of PMIs, stimulus news

The market mood remains sour amid uncertainty around US stimulus, weak data, and elevated yields. Oil prices are falling from the highs as output in TExas gradually returns, while Gold and Bitcoin are on the back foot. Preliminary PMIs for February are awaited around the world.

Global equities have extended their correction from the highs as bond yields in the US and also in Japan and other places continue to rise. Weekly US jobless claims disappointed with a jump, indicating the ongoing struggle of the world’s largest economy.

Declining coronavirus statistics have failed to cheer investors. However, as ten-year Treasury yields hover below 1.30%, the dollar is retreating from the highs.

US stimulus: President Joe Biden and Treasury Secretary Janet Yellen reiterated their message to Congress to “go big” on covid disaster relief ahead of a potential vote in late February. The Washington Post reports that in addition to the proposed $1.9 trillion bill, Democrats are mulling an additional $3 trillion in a jobs and infrastructure program.

Gold has been extending its decline, trading below $1,770 at the time of writing. Investors seem more enthusiastic about Bitcoin as a haven while rising returns on US yields make the yieldless less attractive.

EUR/USD has retreated from the 1.21 level ahead of Markit’s publication of preliminary Purchasing Managers’ Indexes for February. The forward-looking gauges are set to show an ongoing divide between the humming manufacturing sector and the struggling services one. Germany’s finance minister said he sees a subdued economy while European Central Bank Christine Lagarde stated that 2021 is the “year of the recovery.”

GBP/USD has maintained a safe distance from the 1.40 level ahead of the release of UK PMIs and Retail Sales. Prime Minister Boris Johnson’s speech on reopening the economy on Monday is eagerly awaited and details may come out.

WTI Crude Oil has slipped below $60 as output in Texas is coming back online after the “deep freeze” storm paralyzed production. Moreover, Saudi Arabia is likely to return to higher output levels later in the spring.

Cryptocurrencies: Bitcoin has cooled off the highs but remains above $50,000. Tesla’s Elon Musk continued touting the granddaddy of cryptocurencies. Ethereum is holding up above $1,900 while XRP is changing hands above $0.50.

Subscribe to our newsletter

Don't miss new updates on your email