A new week and renewed hunt for yield (Daily analysis 15.02.2021)

15 Feb 2021 10:41|Bartosz Sawicki

A reflation trend is at its best. The US dollar goes down while equity indexes futures soar together with commodities prices. The most risky currencies in both G-10 and EM outperform.

The EUR/USD pair fails to breach 1.2150 mark. Once again, the euro underperforms against the pound sterling as the GBP/USD exchange rate touched 1.39 on Monday morning to trade at the highest level since 2018. The Scandies continue their stellar performance. The EUR/NOK pair is pushed to the new year-to-date lows while the EUR/SEK hovers just a notch above 10.00 and three-year-lows. In the emerging markets space, the South African rand is the strongest performer as weakness from January resulting from the discovery of Covid-19 mutation has already been completely retraced. The Turkish lira trades bid and the USD/TRY pair has managed to push below the 7.00 mark for the first time since early August.

This week markets will focus on numerous economic releases including German ZEW on Tuesday and US retail sales on Wednesday. The FOMC minutes should point that the Federal Reserve is in no hurry to abandon its current accommodative stance and therefore should not give the greenback a boost. On Friday, Flash PMIs will be scrutinized for further evidence of the eurozone’s economic underperformance.

15 Feb 2021 10:41|Bartosz Sawicki

This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without acknowledgement of the source is prohibited.

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