US Open Note – Stocks resume gains; oil pushes higher


Melina Deltas, XM Investment Research Desk

Dollar, stocks and oil advance even higher

One of the main highlights today is the rally in the US dollar, which is still moving higher, near 105.00 versus the Japanese yen. The dollar index is slightly up, while US stocks were re-energized as investors awaited a slew of earnings from corporate America including Exxon Mobil, Amazon.com and Alphabet. The US economy will return to pre-pandemic levels even without another shot of stimulus, announced a study of the Congressional Budget Office. This will endorse the Republicans’ that there is no need for one more relief package. However, the CBO forecasts that the unemployment rate would decline to 5.3% until the end of the current year.

Another theme today is the impressive bullish move on oil prices (+2.33%), which recorded a fresh one-year high around 54.94 as there are a series of OPEC meetings this week.

Eurozone GDP is better than expected

The Eurozone announced the preliminary GDP figures for Q4 earlier in the day. Economic output plunged 0.7% in the last quarter of 2020, less than forecasts of a 1% fall. On a yearly basis, GDP contracted 5.1% in the fourth quarter from -4.3% previously. The euro is still holding below the 1.2100 number against the US dollar, posting a fresh two-month low. Sterling is still outperforming near 1.3700, pushing euro/pound just below 0.8800.

Kiwi eyes jobs report

At 21:45 GMT, New Zealand will release the employment report. The unemployment rate increased to 5.3% in the third quarter of 2020 from 4.0% before. It was the highest jobless rate since the last quarter of 2016. For the fourth quarter, the number is forecasted to rise to 5.6%. The kiwi is moving towards 0.7200 again as risk sentiment stays more upbeat.