Daily summary: Global stocks rally loses momentum

9:00 PM January 22, 2021

  • European stocks extended yesterday's declines
  • US stocks retreat from records
  • US crude inventories jump for 1st time in 6 weeks

European indices finished today's session lower after weak flash PMI figures pointed that economic activity in Europe fell for the third month. Both the service and the manufacturing sector showed signs of weakness. Airline shares suffered the most, after European leaders announced yesterday that borders will remain open but any non-essential travel will be dissuaded in order to curb the spread of the pandemic. DAX 30 fell 0.4%, CAC 40 lost 0.60% and FTSE 100 finished 0.30% lower.

US indices are trading slightly lower, retreating from record levels. The Dow Jones fell 0.50% and both the S&P 500 and the Nasdaq lost around 0.3% on Friday. US stocks erased some of the early losses after manufacturing activity surprisingly jumped to its highest level in more than 13-1/2-years in early January. However initial optimism over earnings was dragged down by losses in blue-chip technology stalwarts Intel and IBM  following their quarterly results. Also investors reassessed the outlook for additional stimulus from the new Biden administration. Several Republicans express doubts about the need for another stimulus bill, especially the $ 1.9 trillion bill proposed by Biden. Meanwhile, Democratic Senator Joe Manchin criticized the size of the latest round of proposed stimulus checks. 

US crude futures are trading 1.40% lower around $52.42 per barrel, while Brent contract fell 1.10% below $ 56.00 per barrel. US crude oil inventories increased by 4.351 million barrels in the week ended January 15th, the first increase in six weeks and compared to analysts' expectations of a 1.167 million fall, according to the EIA report. Elsewhere, gold futures fell 0.70% to $ 1,856.00 / oz, while silver is trading 1.7% lower around $ 25.50 / oz. Bitcoin managed to erase some of the recent losses and is trading above $32,000 level.

USDCHF - looking at the D1 interval, one can see that the inverse head and shoulders formation is building up. The area near 0.8920 handle acts as a neckline and is key resistance for now. If buyers manage to break above it, an upward impulse towards 0.8990 could be launched. On the other hand, once sellers regain control, the support at 0.8760 may be at risk. Source: xStation5

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