Interior minister graces graduation ceremony at Naif Arab University for Security Sciences    Prophet's Mosque imam underscores Islam's core values at peace conference in India    Saudi, Indian foreign ministers co-chair Cooperation Committee meeting in New Delhi    198 new sites documented in the National Antiquities Register    Cityscape Global 2024: Saudi real estate sector booms with SR180 billion in new projects    PIF to sell 2% stake in stc via accelerated book-building    SAMA issues rules for opening electronic wallets    TGA suspends 2 passenger transport applications and an application for food delivery    South Korean actor Song Jae Lim found dead at 39    Trump names Fox News host Pete Hegseth as defense secretary pick    There is nowhere safe in Gaza, UNRWA director says    Archbishop of Canterbury resigns over Church abuse scandal    US says it will not limit arms transfers to Israel    Don't sit on the toilet for more than 10 minutes, doctors warn    Saudi Champion Saeed Al-Mouri scores notable feat in Radical World Championship in Abu Dhabi with support from Bin-Shihon Group    'Marvels of Saudi Orchestra' to dazzle audience in Tokyo on Nov. 22    Rita Ora is tearful in tribute to Liam Payne at MTV Awards    France to deploy 4,000 police officers for UEFA Nations League match against Israel    Al Nassr edges past Al Riyadh with Mane's goal to move up to third    Al Ahli continues strong form with 2-0 win over Al Raed in Saudi Pro League    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Investors remain motivated on stimulus hope
Published in The Saudi Gazette on 08 - 02 - 2021

GENEVA — The week started on positive note in Asia, as Friday's soft US data spurred expectation that Joe Biden's $1.9 trillion fiscal aid package could soon hit the street without the Republican approval.
Last week's jobs data was a mixed bag. The US added 49,000 nonfarm jobs in January, in line with expectations, but there has been a significant downside revision to last month's figure, from -140'000 to -227'000.
The way to look at this number is, there has been a huge job loss in December and only 49,000 of jobs lost were recovered. This brings us to near 180,000 jobs lost during the last two months.
Therefore, the surprise fall in unemployment rate could also be put on the back of a lower participation rate, and the fact that some workers may have abandoned their job search for now, making this surprise read less shiny than the first sight.
Today, 10 million Americans remain jobless and almost half of them are off their jobs for at least 27 weeks according to Bloomberg news.
Though not brilliant per se, the NFP data was good enough to maintain investors optimistic about the future and bad enough to justify the continuation of solid Federal Reserve (Fed) and government support.
US Treasury Secretary and former Fed Head Janet Yellen defended that the government should pursue the approval of the $1.9 trillion stimulus package to help the US going back to full employment by 2022, otherwise recovery could wait until 2025.
The major risk to overstimulation is an overshooting inflation, but Yellen reassured investors that they have tools in hand to cool inflationary pressures if they became threatening.
Gold rebounded past $1800 per ounce on rising inflation expectations, and despite the rising opportunity cost of holding gold due to the rising US treasury yields.
Risk averse investors prefer paying a higher price to seek protection against the mounting inflation risk, and that could be a sign of stress hidden by the positive returns on equity prices.
This week, investors will watch the US inflation figure. While we could see a certain uptick in this week's release, as long as the inflation figures remain under control - meaning around an average of 2%, there won't be a major threat to the Fed doves and to the bullish trend in equities.
WTI crude continues its journey north on the back of two factors, one concerning the demand, the other the supply side. Looking at the record number of supertanks at China's ports, the rising Chinese demand could help explaining a part of the positive push in prices, and the backwardation.
There are apparently 127 supertanks near Chinese ports, some 30% higher than thefour-year average for this time of the year.
From the supply perspective, Joe Biden's promise to cancel the Keystone XL oil pipeline is certainly being priced in, along with OPEC+ sticking to their production cut quotas. But the supply side news could not be enough to push the prices above the $60 per barrel if demand doesn't pick up to pre-pandemic levels fast enough.
In the FX, the EURUSD shortly slipped below the 1.20 psychological mark on Friday. The softening US dollar, due to a stronger conviction regarding Joe Biden's fiscal aid package, could give a hand to euro bulls near this level and help the single currency holding ground. But trend and momentum indicators play against the euro right now, which means that going long euro is also swimming against the tide.
— The writer is senior analyst in Swissquote


Clic here to read the story from its source.