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January 19. Important macroeconomic publications of the day

Macroeconomic calendar on Tuesday does not differ in the variety of publications, however, attention should be paid to the following reports that can affect the dynamics of trading in the single European currency.

According to the report of the German Institute ZEW, the index of business sentiment in Germany, assessing business expectations, amounted to 61.8 points in January against 55.0 a month earlier. Analysts predicted the value of the January indicator at 55.1.

A similar report on business sentiment in the eurozone showed an increase in the indicator from 54.4 points in December to 58.3 points in January. Experts had expected the value of the January indicator at 54.1.

The German Federal Office for Statistics Destatis presented its final inflation report today. The consumer price index in Germany rose 0.5% in December, in line with preliminary data and analysts' forecasts. In annual terms, consumer inflation in December decreased by 0.7%.

January 21. ECB expectedly kept the base rate at zero level

The Board of Governors of the European Central Bank (ECB) at its meeting today kept the base interest rate at a record low zero, as expected by most experts. The rate has been at this level since March 2016.

The deposit rate was also left unchanged – at the level of minus 0.5%, while the margin rate remained at 0.25%.

The European regulator noted that it will keep all rates at (or below) the current level until inflation approaches the target level of 2%.

In addition to rates, the ECB left unchanged the parameters of the special asset purchase program Pandemic emergency purchase program (PEPP). At the moment, its volume is 1.85 trillion euros. The program will run at least until the end of March 2022.

January 26. The oil market has good growth potential

Oil prices continued to rise on Tuesday: Brent has reached $56 per barrel, WTI – $53,25. At the same time, the potential for further strengthening remains.

Some days earlier the information appeared that Iraq plans to reduce oil production to 3.6 million barrels per day, which will be compensation for unfair fulfillment of the terms of the OPEC + deal in 2020. And if Iraq keeps its promises, then the volume of production in the country will decline to the lowest level since 2015.

An additional factor in the rise in oil prices may be the interruptions in exports in Libya, caused by delays in the payment of salaries to the security personnel of the oil facilities. Before these conflicts, Libya saw a rapid recovery in oil production: in December, production reached 1.2 million barrels per day, while in August production volumes were less than 100 thousand barrels per day.

Also, market participants continue to monitor the spread of Covid-19 in the world and the progress of negotiations on new economic stimulus in the United States. US President Joe Biden is pushing for the early adoption of a new $1.9 trillion fiscal stimulus package. The inflow of new money into the US economy will put pressure on the dollar, which, in turn, will act as a factor supporting Brent quotes.

January 29. Bitcoin rose after Elon Musk's tweet

According to the trading data, the growth of bitcoin on Friday accelerated sharply, exceeding the $38 mark. The growth driver was the publication of Elon Musk on his Twitter page, where the entrepreneur mentioned bitcoin, adding the hashtag «bitcoin».

Also, the head of Tesla and SpaceX wrote a separate message: «In retrospect, it was inevitable.»

As a result, the rate of the first cryptocurrency immediately skyrocketed from $32 thousand to $38 thousand, stabilizing slightly during the day at $37 thousand.Thus, in about an hour, the price of bitcoin increased by more than 17%.

A few days earlier, Elon Musk «boosted» another cryptocurrency – previously little-known Dogecoin. It skyrocketed in value by more than 800% after Musk's «joke» mention on his Twitter account.

February 03. The number of jobs in the private sector in the United States in January grew better than expected

According to a press release from the analytical company Automatic Data Processing (ADP), the number of jobs in private companies in the United States in January increased by 174,000. Analysts predicted an increase in the indicator by only 49 thousand.

The December figure was revised down to a decrease of 78 thousand from a decrease of 123 thousand.

In the US small business, the number of jobs in January increased by 51 thousand, in medium-sized companies (with a staff of 50-499 people) – by 84 thousand, and large companies increased their staff by 39 thousand jobs.

In the service sector, the number of jobs increased by 156 thousand, in the production of goods – by 19 thousand. At the same time, the figure for private construction companies in the country in January increased by 18 thousand, in the manufacturing sector – by 1 thousand.

February 05. Oil market hits annual high

The oil market continues its bullish rally, reaching $59.70 per barrel. The last time the quotes were at similar levels was in January 2020.

The main support for oil prices is provided by the successful implementation of the terms of the deal to reduce oil production by OPEC + countries. On Wednesday, a meeting of the OPEC + Monitoring Committee took place, at which it was noted that the agreement was fulfilled by 101%. On the side of buyers are also data on changes in US oil reserves from the EIA - stocks of raw materials in the country continue to decline for the third week in a row.

Further driving up the oil market are signs that the coronavirus pandemic is on the wane as infections, hospitalizations and deaths have been steadily declining globally over the past two or three weeks.

At the same time, market participants ignored the annual report of the US Department of Energy with pessimistic forecasts for a recovery in demand. The EIA noted that aggregate energy consumption in the United States could return to 2019 levels only by 2029, and if the pace of economic recovery remains low, then even by 2050.

February 10. Oil continues to break records

Oil continues to break records, reaching $61.50 a barrel. Brent rose in price for the ninth session in a row, WTI – for the eighth. The prices were supported by the forecast of the US Department of Energy, according to which in 2021 world oil demand will amount to 97.67 million barrels per day, and world supply – 97.29 million bpd.

As a result, this year the market may no longer face an excess, but a shortage of oil in the amount of 380 thousand bpd. In 2022, according to the estimates of the US Department of Energy, the oil supply deficit may increase to 400 thousand bpd.

Today, market participants are awaiting the publication of the US Department of Energy's report on energy reserves in the country. Yesterday, the American Petroleum Institute (API) announced a decline in oil reserves by 3.5 million barrels per week. Analysts expect the Energy Ministry data to show a 2.7 million barrels drop in US crude inventories.

An additional positive for the oil market is a slight improvement in the epidemiological situation in the world. Ongoing vaccinations, declining COVID-19 incidence, and expectations for a new stimulus package in the US are improving the outlook for demand.

February 16. Oil market dynamics

On Tuesday, the oil market demonstrates multidirectional dynamics: Brent quotes fluctuate in the range of $63-63.70 per barrel. The current price of the asset is $63.25.

Prices were supported by news that Texas oil companies are suspending operations due to the Arctic cold, which has led to power outages in many parts of the state. Analysts note that this factor could lead to a decrease in production by about 1 million barrels per day.

It should be noted that this almost completely neutralized the negative effect of the data on the number of drilling rigs in the United States. According to statistics from Baker Hughes, the number of active oil platforms has grown from 299 to 306, indicating a gradual recovery in the US oil sector.

Moreover, Brent is also being supported by an improvement in the epidemiological situation in the world amid the rapid spread of vaccines. This gives hope that new restrictions will be dispensed with this year.

Further dynamics of the oil market will depend on the behavior of the dollar. Now the US currency is declining across the entire spectrum of the market amid expectations of the final approval of the economic stimulus program from Joe Biden in the amount of $1.9 trillion.

February 18. The number of applications for unemployment benefits in the US rose worse than expected

According to the US Department of Labor, the number of initial claims for unemployment benefits for the week ended February 13, increased by 13 thousand compared with the revised figure of the previous week to 861 thousand applications.

At the same time, analysts were expecting a decrease in the indicator by 28 thousand – to 765 thousand. What is even worse – the indicators of the previous week were revised upward by more than 50 thousand to 848 thousand.

The number of secondary orders, which are counted one week behind the primary orders, also disappointed market participants. Secondary bids fell only slightly to 4.494 million from an upwardly revised 4.558 million. Analysts had expected 4.413 million.

February 22. Poland and Ukraine call on the US to «end» the construction of the Nord Stream-2

Foreign Ministers of Poland and Ukraine Zbigniew Rau and Dmitry Kuleba called on US President Joe Biden to «put an end» to the construction of the Nord Stream 2 gas pipeline. In their note politicians advised Biden to use every means at his disposal to prevent the completion of the project.

Rau and Kuleba fear that Nord Stream-2 will further strengthen Russia's position in the situation with gas supplies to Europe. In addition, in their opinion, the project will convince Ukrainians that the West does not adhere to its own principles and does not care about the prosperity of Ukraine.

The ministers are convinced that Moscow was allowed to go too far in implementing the project, and Washington's position on this issue is very important.

The day before, Nord Stream, the operator of Nord Stream-2, asked the German regulator for «immediate execution» of permission to lay the pipeline in German waters. The fact is that in January, the environmental organization Deutschen Umwelthilfe, protested the previously issued permission to lay the pipe.

February 26. Germany has announced four options for the future «Nord Stream 2»

The German authorities have proposed four options for the future of the «Nord Stream 2» project in order to come to a compromise with the United States and «end the grueling showdown» around the pipeline.

The first course of action proposed by Berlin is the US refusal from threats of sanctions if the «danger» for Ukraine is removed or at least reduced. This option provides for the possibility of stopping gas supply in the event that Russia stops transportation through the territory of Ukraine.

Another option is to suspend the construction of the pipeline for the purpose of negotiations. The FRG authorities note that the United States can create a special commission with the participation of Europeans, whose task will be to develop specific solutions.

Germany sees the third decision to provide investment assistance to Ukraine, which will soften Washington's position. And the fourth scenario is the continuation of the construction of the gas pipeline in spite of all countermeasures to the project.

Let us remind you that «Nord Stream 2» is a gas pipeline from Russia to Germany, laid along the bottom of the Baltic Sea. Now the facility is 95% ready, and the cost of its construction is estimated at $11 billion.

March 02. China's financial regulator announced a «bubble» in global stock markets

The China Banking and Insurance Supervision and Control Committee (CBIRC) said the rally in the US and other stock markets resembles a «bubble» and will eventually move to a correction. The head of the committee, Guo Shuqing, also noted that the American and European markets are moving in the opposite direction compared to the economy.

CBIRC comments did not support sentiment on the Hong Kong stock exchange, and Hong Kong's Hang Seng Index fell 1.2% on Tuesday. Moreover, experts believe that such statements may create even greater concern about the further tightening of China's monetary policy.

The regulator also announced a «bubble» in the real estate market in China itself. This is because many people buy houses for investment or speculative purposes, which is «very dangerous.»

The economic recovery, a surge in lending and fears of missing out on buying a home have boosted demand for real estate in major Chinese cities. As a result, the authorities have retaliated, including a new mortgage lending facility. Despite this, housing prices in the secondary market, which is less regulated by the state, jumped in January to a maximum in a year and a half.

04.03. Construction of Nord Stream 2 postponed until September

The construction of the Russian gas pipeline Nord Stream 2 was again postponed, this time for six months. Now, work on laying two lines of the gas pipeline in the exclusive economic zone of Denmark is going to be completed in September 2021, although the deadline was previously planned for the end of April.

Initially, the project was supposed to be completed at the end of 2019, however, the construction of the pipeline was prevented by sanctions from the United States, due to which European companies began to leave the project. Washington is hindering the construction of the facility, as American liquefied natural gas competes with Russian pipeline fuel for the European market.

As of early March, the pipeline is 98% ready, and its cost is estimated at $11 billion. Russia does not abandon plans to complete the construction of the facility, however, certification and insurance of the route still remain unresolved problems.

Also today it became known that the financial partner of the project, the German concern Uniper, announced that it would no longer finance the project. It is known that as of November, Uniper has allocated 700 million euros to finance the construction of the gas pipeline. Earlier, the completion of financing was also announced by the German oil and gas company Wintershall Dea.

March 8. US stock markets open in the red

Investors are encouraged today that the Senate passed President Joe Biden's $ 1.9 trillion stimulus bill this weekend. Minor amendments were made to the bill, reducing unemployment benefits from $ 400 to $ 300. He must now return to the House of Representatives, which will approve the revised version and finally unlock the funds.

The approval of the bill to stimulate the economy further contributed to the growth of US Treasury bonds, which, in turn, negatively affects the stock indices. The Nasdaq 100, S&P 500 and Dow Jones all started trading in the red today due to low investor interest in the stock at the moment.

Stocks in China are also declining in light of last week's announcement of a lower-than-expected growth outlook. This signals to the markets that the government may withdraw some stimulus from its economy to offset the growth in borrowing.

Oil prices continued to rise after OPEC + agreed not to increase its quotas in April last week. In addition, there has been an attack on Saudi Arabia's oil facilities, although the country has reported that production is unlikely to be affected. Nevertheless, oil managed to rise above $ 70 a barrel.

March 11. ECB kept monetary policy unchanged

A meeting of the Board of Governors of the European Central Bank (ECB) took place today, following which monetary policy remained unchanged. The base interest rate on loans was kept at zero.

The rate on deposits also remained at the same level – minus 0.5%, the rate on short-term loans from the ECB – at 0.25%. The regulator expects key interest rates to remain at or below current levels until the inflation forecast steadily approaches below 2%.

In addition, the central bank will continue the bond buyback program (PEPP) in connection with the pandemic totaling € 1.85 trillion. The reinvestment of the main payments on the securities purchased under the PEPP is planned to continue until at least the end of 2023.

The regulator will also continue the program of asset repurchase (APP) in the amount of € 20 billion monthly, as well as reinvestment of payments on securities purchased under this program.

The next meeting of the European Central Bank will be held on April 22.

March 15. Oil hits $70 maximum on strong data from China

Brent crude hit a high of $70 per barrel on Monday, boosted by data from China, which indicated a recovery in the economy, improving the outlook for demand from the world's largest oil importer. Activity in China's industrial and retail sectors surged in the first two months of 2021, exceeding analysts' expectations.

Additional support for the quotes of «black gold» was provided by the OPEC report published last Thursday, according to which world oil demand in 2021 will reach 96.3 million barrels per day. Now experts of the oil cartel expect an increase in world oil demand by 5.9 million barrels per day.

On the side of buyers, there is also general market optimism caused by new fiscal stimulus measures, worth $1.9 trillion, in the US, which were finally agreed at the end of last week. Market participants believe that the injection of such huge money into the economy will significantly accelerate the recovery of economic activity, which will have a favorable effect on the demand for energy resources.

However, Brent failed to gain a foothold in the area of ​​highs. The current quotation of the commodity asset is $ 68.75 per barrel.

March 22. German economy falls due to antivirus restrictions

The Bundesbank said today that the German economy is likely to contract sharply in the first quarter of this year, as due to pandemic restrictions the service sector has suffered significantly and the development of the construction industry has slowed down. Experts point out that a hike in sales tax, which was temporarily cut last year, likely contributed to a significant reduction in construction volumes in January.

In its monthly report, the German central bank did not update its forecast for the spring economic recovery and dropped references to the coronavirus vaccination campaign, which was undermined by news of possible side effects. The authorities had previously expected the economy to recover in the spring thanks to a decrease in the incidence of coronavirus and mass vaccinations.

The regulator also noted that measures to contain the pandemic in the current quarter are on average more stringent than in the previous one, so a stronger decline in economic production can be expected. Industrial production also declined in the first month of the year, but orders were high and merchandise exports increased.

March 24. Suez Canal blocked: 12% of world trade in question

One of the largest container ships in the world, owned by the Taiwanese company Evergreen Marine, ran aground in the Suez Canal, completely blocking traffic on the most important trade route connecting Europe, Asia and the United States to the Middle East.

Experts note that about 12% of world trade passes through this channel, 30% of the world's container ships' capacity per year, and about 600 thousand barrels of crude oil from the Middle East to Europe and the United States every day. Moreover, the Suez Canal remains the main source of income for Egypt.

At the moment it became known that at the entrance to the canal tankers with oil and liquefied natural gas, container ships with various goods and dry cargo vessels are accumulating. If congestion continues until the end of this week, it will affect the transit of 15 LNG tankers and disrupt the entire shipping schedule. Unblocking of the channel is expected to take several days at best.

March 26. Experts believe that cars will rise in price because of the Suez Canal blocking

Experts believe that blocking the movement of ships through the Suez Canal will inevitably lead to higher prices for cars.

It is noted that the incident involving the container ship Evergreen mainly affected the European Union. For three days, a queue of more than 200 ships gathered near the blocked canal. Another part of the tankers headed by a roundabout route around Africa – and this will move the delivery dates by 15 days.

Analysts also note that the situation in the Suez Canal may affect the cost of some industrial goods from Europe, including automotive products. The fact is that the increase in costs due to the additional time spent in chartering ships is approximately $8,000 for each container from China. Although this is a small amount, the main problem is timing.

Currently, the European markets are already experiencing assembly problems due to the lack of chips. And 15 days of delay can lead to an increase in the cost of cars by 1-2%.

March 31. ECB sees opportunity to launch digital euro by 2025

The head of the European Central Bank (ECB) Christine Lagarde said that the regulator could launch the digital euro around the middle of this decade, in 2025.

In her interview, Lagarde noted that the main task of the ECB is to ensure the correct approach to the process of creating a digital European currency, which can take several years. «This is a technical project and also a fundamental change. We have to make sure we don't break the system, but we will improve it», Lagarde said.

The ECB intends to publish an analysis of the 8,000 responses received in a public consultation on a potential digital currency launch. Further, the analysis will be sent to the European Parliament, and then – to the ECB Governing Council, which by the middle of this year will decide whether to continue this experimental work. The final decision on whether to introduce digital currency at all will be made six months or a year after that.

The European Central Bank has said it is considering issuing a digital euro to prepare for the digital age. The European Commission, in turn, noted that the digital euro can support the digitalization of the entire EU economy, which is one of the most important elements of the EU's development.

April 2. Non-farm Payrolls report significantly exceeded expectations

Today, the US Department of Labor released a report Non-farm Payrolls, according to which, the number of jobs outside of agriculture in March rose by 916 thousand, and the unemployment rate fell to 6%. The current increase significantly exceeded analysts' forecasts (647 thousand) and became the fastest since August 2020.

Stronger US economic growth and strong vaccination efforts fueled the job growth. Analysts note that the country's economy is recovering, restrictions are lifted, and those who have lost their jobs are returning to jobs. The only concern is the potential likelihood of another wave of Covid, which could lead to another round of closings.

In April last year, against the backdrop of the pandemic, unemployment in the United States was at the level of 14.7%, in May – 13.3%, in June – 11.1%, in July – 10.2%, in August – 8.4%. and in September – 7.9%. The actual figure of 6% clearly speaks of a significant recovery in the American labor market. In mid-March, the Fed improved its forecast for US unemployment in 2021 to 4.5% from 5%. In 2022, the indicator will be at the level of 3.9% against the previously expected 4.2%, in 2023 – at the level of 3.5% against 3.7%.

April 8. US stock markets continued their upward rally

Reports on initial and ongoing jobless claims in the US were released today, which turned out to be worse than analysts' forecasts. Moreover, today traders will follow the speech of Fed Chairman Jerome Powell at the IMF, although they do not expect important news from this speech.

More information has emerged about the tax changes planned by President Joe Biden's administration. US Treasury Secretary Janet Yellen has previously excited the markets with statements of a minimum international tax - an idea that the EU also supports. It turned out that the 15% tax that it offers will apply only to companies with annual revenues of at least $ 2 billion, which means it will have less impact on the market than previously thought.

Tax plan adjustments are beneficial for the stock markets. Today, American stock indices continued to renew their all-time highs, despite disappointing data on unemployment in the country.

Meanwhile, AstraZeneca's share price is rising, despite the company's continuing troubles. The European Medicines Agency and the UK Medicines and Health Agency have determined that AstraZeneca vaccine, in rare cases, can contribute to a possible death from blood clotting.

Due to the rarity of this problem (20 out of 20 million vaccinations in the UK) and the severity of Covid-19, both agencies still recommend the use of the AstraZeneca vaccine. This optimism is most likely the driving force behind the rise in the pharmaceutical company's stock.

Oil market. April 15, 2021 | Brent remains in the area of monthly highs

On Thursday, oil prices continued to be in the area of ​​monthly highs, thanks to improved forecasts for global fuel demand. The current Brent quotation is $66.30 per barrel.

Prices were supported by a report from the International Energy Agency (IEA), according to which oil demand is expected to grow by 5.7 million barrels per day in 2021 compared to 2020. And this is 230 thousand barrels per day more than previously predicted. The Organization of the Petroleum Exporting Countries (OPEC) has also improved its forecast for global oil demand for the current year and is now expecting an increase of 5.95 million barrels per day.

Additional support for quotations of «black gold» was provided by yesterday's data on crude oil reserves in the United States. The Energy Information Administration (EIA) reported that oil reserves last week fell by 5.89 million barrels, while analysts had expected a half-cut, by 2.89 million barrels. In the current environment, oil prices will continue to trade above $66.00 per barrel.

April 19. Wall Street declines, consolidating after record peaks

On Monday, the US stock market opened lower, consolidating in the absence of important economic news. Earlier last week, Wall Street hit another record high.

In particular, the Dow Jones Industrial Average fell 114 points to 34.066 points, the S&P 500 fell 0.2% to 4.158 and the Nasdaq Composite fell 0.1% to 13.873 points.

The main reason for the decline in the market, analysts called the sharp sell-off of cryptocurrencies over the weekend, which reminded investors how hectic the atmosphere was in the financial market during the pandemic.

Tesla shares plunged 4% after another Tesla self-driving car crash resulting in two fatalities, once again calling into question the capabilities of the Full Self-Driving software. Peloton shares lost more than 7% after a public dispute with US regulators over the safety of its Tread +. Coinbase Global shares fell 0.9% after the cryptocurrency sharp correction seems to have exhausted itself. Growth leaders included Harley-Davidson, Manchester United Football Club and GameStop.