Decent ADP, Draghi, Heavy Artillery and Bank of England

4 thg 2, 2021

The markets breathed out in relief yesterday. The fear associated with uncontrolled attacks on retail investors is gradually disappearing. This is due to news that “the attacks organizer lost $17 million in the last two days.” Also, it’s because of the price dynamics for shares-targets attacked, as well as information that heavy artillery is involved in the case. It clearly shows the bubble is deflating. Jannette Yellen, the US Treasury Secretary, meets SEC and Fed heads today to discuss the current situation.
Excellent reports from Amazon and Alphabet also contributed to the relief. Only Jeff Bezus’ upcoming departure from the post spoiled the news.

Another reason for optimism was the news that Mario Draghi, the ECB former chief, is likely to become Prime Minister of Italy. Considering Draghi’s reputation and his actions as head of the ECB, this news definitely means the political crisis in Italy is over, and it ensures a good hope for the best.

The most interesting thing is that this isn’t the last good news as of Wednesday. The US employment stats from the ADP came out better than forecasted (174K instead of 49K forecast). In general, it set up a positive mood. Markets feared that the weak December statistics would continue in January.

Today the announcement of the Bank of England meeting results is interesting. The specter of negative rates is hovering over the UK. So, the Bank of England is expected to provide some clarity on this issue. In general, markets don’t expect any changes in the monetary policy parameters today.

In addition, the numbers on retail sales in the Eurozone are to be considered, as well as the US unemployment data on a daily basis.