Japan, Russia, and Mexico detected its first case of the new coronavirus strain, which was first discovered in the United Kingdom (UK) last month. The new and more contagious UK variant can be up to 70 per cent more transmissible than other SARS-CoV-2 variants. Meanwhile, the Japan government already declared a state of emergency for Tokyo and three neighbouring prefectures last week.
US stock futures and European markets started the week lower after the first week of 2021 ended at record levels. During the last week, the Dow industrials increased 1.6% and the S&P 500 climbed 1.8%. The Nasdaq Composite gained 2.4% in the first week of 2021.
Crude oil price slightly retreated from the highs on renewed concerns about global fuel demand amid strict coronavirus lockdowns in Europe and other parts of the world.
In the currency market, the dollar turned higher against a basket of major currencies after weaker-than-expected NFP report. The US nonfarm payrolls decreased by 140,000 in December, the first decline in eight months, well below expectations that called for a still-weak increase of 71,000 jobs.
The yellow metal extends lower on Monday after a jump in U.S. Treasury yields and the recent recovery in the US dollar. The US Treasury yields on 10-year bonds rose by almost 21% for the week.
On the data front, China Consumer price index rose by 0.2 %, after a 0.5% fall a month earlier and compared with market consensus of a 0.1% gain. While the PPI increased from -1.5% in November to -0.4% last month, topping the consensus estimate of -0.8%. On the other hand, Australia retail sales rose by 7.1% month-over-month in November.
This week the main highlights of the economic calendar will be the UK GDP and industrial production data, US retail sales and Oil inventories. On the earnings front, JP Morgan, CITI, and Wells Fargo will release their fourth-quarter 2020 earnings results.
EUR/USD: The currency pairs started this week on a bearish note after a number of coronavirus cases increasing across Europe.
The important levels to watch for today: Support- 1.2170 and 1.2130 Resistance- 1.2200 and 1.2230.
GOLD: The gold price rebounded from the short-term support zone $1820. At the time of writing, the precious metal trading at $1850.
The important levels to watch for today: Support- 1826 and 1816 Resistance- 1860 and 1870.
Quote of the day: Investing isn’t about beating others at their game. It's about controlling yourself at your own game – Benjamin Graham.