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January 15. German economy shrank by only 5% in 2020

According to preliminary data from the German Federal Statistical Office, the country's economy contracted by only 5% in 2020, less than expected. This was facilitated by the decisive measures of the German government, which made it possible to minimize the damage caused by the coronavirus pandemic.

The fall in GDP turned out to be less than the forecast of 5.1% and less serious than the record economic contraction in 2009 during the global financial crisis. The agency also noted that the German economy faced stagnation in the IV quarter of 2020, but analysts are still expecting positive dynamics in the new year.

Recall, that in March last year, the government of Angela Merkel took a number of measures to rescue and stimulate the largest economy in Europe. Specifically, incentives included helping companies struggling with the pandemic, job protection schemes for employees, tax cuts, and cash disbursements to boost domestic demand. The government also invested in green technologies and infrastructure.

 

January 18. German economy faces significant decline if restrictions are extended

The Bundesbank said today that the German economy still manages to stay afloat, but it could also face a «tangible blow» if the country extends restrictions to combat the coronavirus.

As early as autumn, Germany introduced tougher measures, such as the closure of some schools and shops, to restrict the movement of people and prevent the spread of Covid.

German Chancellor Angela Merkel is in favor of taking very quick measures to avoid mass morbidity. German authorities will meet this week to discuss tougher restrictions. However, the German central bank fears that if the measures are extended, the country's economy could be seriously affected.

 

January 19. Important macroeconomic publications of the day

Macroeconomic calendar on Tuesday does not differ in the variety of publications, however, attention should be paid to the following reports that can affect the dynamics of trading in the single European currency.

According to the report of the German Institute ZEW, the index of business sentiment in Germany, assessing business expectations, amounted to 61.8 points in January against 55.0 a month earlier. Analysts predicted the value of the January indicator at 55.1.

A similar report on business sentiment in the eurozone showed an increase in the indicator from 54.4 points in December to 58.3 points in January. Experts had expected the value of the January indicator at 54.1.

The German Federal Office for Statistics Destatis presented its final inflation report today. The consumer price index in Germany rose 0.5% in December, in line with preliminary data and analysts' forecasts. In annual terms, consumer inflation in December decreased by 0.7%.

 

January 20. Joe Biden takes over as President of the United States

Today is a very important day for the United States of America – the inauguration of the new President-elect Joe Biden. The 78-year-old Democrat will become the oldest president in U.S. history and lead a country plagued by the coronavirus pandemic and political divisions.

Biden's companion Kamala Harris, the daughter of immigrants from Jamaica and India, will become the first black, first woman, and first Asian American to be elected US Vice President.

The inauguration ceremony will take place at the Capitol Building, where the unprecedented storming of the building by supporters of Donald Trump was organized on January 6. As a result of this «action», the US House of Representatives last week impeached the incumbent president for the second time, which also has never happened in the history of the country.

Contrary to tradition, the outgoing president will not be present at the inauguration of his successor: this morning D. Trump left the White House and Washington without admitting defeat in the elections.

 

January 21. ECB expectedly kept the base rate at zero level

The Board of Governors of the European Central Bank (ECB) at its meeting today kept the base interest rate at a record low zero, as expected by most experts. The rate has been at this level since March 2016.

The deposit rate was also left unchanged – at the level of minus 0.5%, while the margin rate remained at 0.25%.

The European regulator noted that it will keep all rates at (or below) the current level until inflation approaches the target level of 2%.

In addition to rates, the ECB left unchanged the parameters of the special asset purchase program Pandemic emergency purchase program (PEPP). At the moment, its volume is 1.85 trillion euros. The program will run at least until the end of March 2022.

 

January 25. Negative statistics from Germany dropped the euro

The euro rate, which showed growth in tandem with its main opponent, went down after the release of weak macroeconomic statistics from Germany. The current quote for the EUR/USD pair is 1.2145.

In particular, data from the IFO research institute reflected a decrease in the business climate index in Germany to 90.1 points compared to 92.2 points in December. At the same time, analysts had expected the indicator to decline only to 91.8 points.

The assessment of the current economic situation in the country in January also fell more than the forecast – to 89.2 points from 91.3 points in December. In addition, the country's business expectations index fell to 91.1 points against the December index of 93 points, while analysts predicted its growth.

 

January 26. The oil market has good growth potential

Oil prices continued to rise on Tuesday: Brent has reached $56 per barrel, WTI – $53,25. At the same time, the potential for further strengthening remains.

Some days earlier the information appeared that Iraq plans to reduce oil production to 3.6 million barrels per day, which will be compensation for unfair fulfillment of the terms of the OPEC + deal in 2020. And if Iraq keeps its promises, then the volume of production in the country will decline to the lowest level since 2015.

An additional factor in the rise in oil prices may be the interruptions in exports in Libya, caused by delays in the payment of salaries to the security personnel of the oil facilities. Before these conflicts, Libya saw a rapid recovery in oil production: in December, production reached 1.2 million barrels per day, while in August production volumes were less than 100 thousand barrels per day.

Also, market participants continue to monitor the spread of Covid-19 in the world and the progress of negotiations on new economic stimulus in the United States. US President Joe Biden is pushing for the early adoption of a new $1.9 trillion fiscal stimulus package. The inflow of new money into the US economy will put pressure on the dollar, which, in turn, will act as a factor supporting Brent quotes.

 

January 27. Biden considers Nord Stream-2 a bad deal for Europe

US President Joe Biden said that he considers the Nord Stream 2 gas pipeline project a bad deal for Europe and intends to revise the restrictions adopted by Congress under Donald Trump.

These sanctions were included in the US annual defense budget (NDAA) and, according to them, the restrictions apply to any company that helps Gazprom lay a pipeline, insure ships, certify and repair equipment. The Trump administration has argued that the project will strengthen the economic and political influence of Russian President Vladimir Putin in Europe.

The new president is also opposed to further construction of the gas pipeline. Perhaps the new restrictions will be even stricter. As a reminder, at present Russia has resumed the implementation of Nord Stream 2 after foreign pipelayers left the project due to the threat of US sanctions.

 

January 29. Bitcoin rose after Elon Musk's tweet

According to the trading data, the growth of bitcoin on Friday accelerated sharply, exceeding the $38 mark. The growth driver was the publication of Elon Musk on his Twitter page, where the entrepreneur mentioned bitcoin, adding the hashtag «bitcoin».

Also, the head of Tesla and SpaceX wrote a separate message: «In retrospect, it was inevitable.»

As a result, the rate of the first cryptocurrency immediately skyrocketed from $32 thousand to $38 thousand, stabilizing slightly during the day at $37 thousand.Thus, in about an hour, the price of bitcoin increased by more than 17%.

A few days earlier, Elon Musk «boosted» another cryptocurrency – previously little-known Dogecoin. It skyrocketed in value by more than 800% after Musk's «joke» mention on his Twitter account.

 

February 01. Silver prices skyrocket to 8-year highs

Silver prices have jumped 16% over the past three trading sessions. The current quotation of the asset is $30.133 per ounce, which is a new high since February 2013.

Experts point out that the rush for silver may have emerged after a message appeared last week urging people to invest in silver on the private trader community on Reddit (a social news site). Forum participants decided to raise the price of the metal after the success with the shares of the GameStop company and the Dogecoin meme cryptocurrency.

Silver began to rise last week amid calls from traders to buy the metal to put pressure on banks trying to capitalize on its price decline. And on January 29, the net capital inflow to IShares Silver Trust, the largest exchange-traded fund backed by silver, reached an unprecedented amount of $944 million.

Investor interest in silver has also led to a surge in the value of silver-mining companies and ETFs that are pegged to silver. So the securities of the silver mining corporation First Majestic Silver soared by 30% in the last two trading sessions.

 

February 03. The number of jobs in the private sector in the United States in January grew better than expected

According to a press release from the analytical company Automatic Data Processing (ADP), the number of jobs in private companies in the United States in January increased by 174,000. Analysts predicted an increase in the indicator by only 49 thousand.

The December figure was revised down to a decrease of 78 thousand from a decrease of 123 thousand.

In the US small business, the number of jobs in January increased by 51 thousand, in medium-sized companies (with a staff of 50-499 people) – by 84 thousand, and large companies increased their staff by 39 thousand jobs.

In the service sector, the number of jobs increased by 156 thousand, in the production of goods – by 19 thousand. At the same time, the figure for private construction companies in the country in January increased by 18 thousand, in the manufacturing sector – by 1 thousand.

 

February 04. The number of applications for unemployment benefits in the United States for the week fell by 33 thousand

According to the US Department of Labor, the number of initial applications for unemployment benefits in the United States for the week fell by 33 thousand compared with the revised figure of the previous week – to 779 thousand applications. Analysts predicted a decrease in the number of applications by only 17 thousand, to 830 thousand.

At the same time, the average number of initial applications over the past four weeks decreased by 1.25 thousand from the revised figure – to 848.25 thousand. The initial figure was revised downwards – to 849.5 thousand from 868 thousand.

The total number of people receiving unemployment benefits in the United States fell by 193 thousand from the revised figure of the previous week, to 4.592 million. The previous week's figure was revised to 4.785 million from 4.771 million.

 

February 05. Oil market hits annual high

The oil market continues its bullish rally, reaching $59.70 per barrel. The last time the quotes were at similar levels was in January 2020.

The main support for oil prices is provided by the successful implementation of the terms of the deal to reduce oil production by OPEC + countries. On Wednesday, a meeting of the OPEC + Monitoring Committee took place, at which it was noted that the agreement was fulfilled by 101%. On the side of buyers are also data on changes in US oil reserves from the EIA - stocks of raw materials in the country continue to decline for the third week in a row.

Further driving up the oil market are signs that the coronavirus pandemic is on the wane as infections, hospitalizations and deaths have been steadily declining globally over the past two or three weeks.

At the same time, market participants ignored the annual report of the US Department of Energy with pessimistic forecasts for a recovery in demand. The EIA noted that aggregate energy consumption in the United States could return to 2019 levels only by 2029, and if the pace of economic recovery remains low, then even by 2050.

 

February 09. Elon Musk once again contributed to the historical growth of bitcoin

The cost of bitcoin for the first time exceeded the $48 thousand mark today. The rapid growth was noted after Tesla's announcement of the acquisition of cryptocurrency for $1.5 billion (1.2 billion euros) and its readiness to continue to accept it as payment for electric vehicles. The increase since the beginning of the year was about 61%, and since the beginning of the day – by 2.5%.

Investors expect BlackRock Inc. to join the list of companies that invest in or own Bitcoin soon. Is an international investment corporation and American tech giant Square Inc.

The systematic growth of bitcoin began in the fall of 2020, it remained until mid-January 2021. After the cryptocurrency reached a record high of $40 thousand, the rate began to gradually fall and stayed in the region of $30-35.

Analysts do not have a general prediction of what will happen with Bitcoin next. Some believe that the cryptocurrency was overvalued at the level of the exchange rate of $30 thousand, while others predict growth up to several hundred thousand dollars.

 

February 10. Oil continues to break records

Oil continues to break records, reaching $61.50 a barrel. Brent rose in price for the ninth session in a row, WTI – for the eighth. The prices were supported by the forecast of the US Department of Energy, according to which in 2021 world oil demand will amount to 97.67 million barrels per day, and world supply – 97.29 million bpd.

As a result, this year the market may no longer face an excess, but a shortage of oil in the amount of 380 thousand bpd. In 2022, according to the estimates of the US Department of Energy, the oil supply deficit may increase to 400 thousand bpd.

Today, market participants are awaiting the publication of the US Department of Energy's report on energy reserves in the country. Yesterday, the American Petroleum Institute (API) announced a decline in oil reserves by 3.5 million barrels per week. Analysts expect the Energy Ministry data to show a 2.7 million barrels drop in US crude inventories.

An additional positive for the oil market is a slight improvement in the epidemiological situation in the world. Ongoing vaccinations, declining COVID-19 incidence, and expectations for a new stimulus package in the US are improving the outlook for demand.

 

February 15. US Senate acquits Trump at impeachment trial

The Senate of the US Congress, during its meeting, acquitted former President Donald Trump in the framework of impeachment. Trump is known to have been charged with inciting a crowd to attack the Capitol last month.

57 senators voted for impeachment, while 43 voted against. 67 votes out of 100 were required for the indictment. Thus, the initiative did not receive the required number of votes. Earlier, many Americans (54% of respondents) said that Trump should stop participating in the country's political life.

The second process of impeachment against the former head of the White House began in the Senate on February 9. It was the first time in the United States that an attempt to remove a state leader from office after the end of the presidential term was made.

The first attempt at impeachment was made back in 2019, but the Senate acquitted the president in early 2020. Then the investigation was launched in connection with the statement of an anonymous informant that President Trump in July 2019 put pressure on President of Ukraine Volodymyr Zelensky in his own personal and political interests.

 

February 16. Oil market dynamics

On Tuesday, the oil market demonstrates multidirectional dynamics: Brent quotes fluctuate in the range of $63-63.70 per barrel. The current price of the asset is $63.25.

Prices were supported by news that Texas oil companies are suspending operations due to the Arctic cold, which has led to power outages in many parts of the state. Analysts note that this factor could lead to a decrease in production by about 1 million barrels per day.

It should be noted that this almost completely neutralized the negative effect of the data on the number of drilling rigs in the United States. According to statistics from Baker Hughes, the number of active oil platforms has grown from 299 to 306, indicating a gradual recovery in the US oil sector.

Moreover, Brent is also being supported by an improvement in the epidemiological situation in the world amid the rapid spread of vaccines. This gives hope that new restrictions will be dispensed with this year.

Further dynamics of the oil market will depend on the behavior of the dollar. Now the US currency is declining across the entire spectrum of the market amid expectations of the final approval of the economic stimulus program from Joe Biden in the amount of $1.9 trillion.

 

February 17. Elon Musk's SpaceX raised $850 million

Last week, space company SpaceX, owned by Tesla CEO Elon Musk, raised $850 million in new funds, bringing the company to a valuation of around $74 billion. The funds were raised at $419.99 per share.

The previous round of funding was completed in August last year. Then SpaceX managed to raise about $2 billion at an estimate of $46 billion. Since then, Musk's company has grown by about 60% by its estimate.

Experts note that over the past three days, the market has seen a truly «insane demand» for the company. The reason for this unexpected influx of funds into the company is the development of two capital-intensive projects by SpaceX.

The first project – Starlink – is the creation of an interconnected Internet network using thousands of satellites. The network is designed to provide high-speed 5G internet to consumers anywhere in the world. Initially, the construction of Starlink was estimated at $10 billion, but now the company's management is confident that the network can bring in up to $30 billion a year.

The second project is the construction and launch of Starship missiles. The main purpose of such rockets is to deliver goods and people (up to 100 people) to the Moon and Mars.

 

February 18. The number of applications for unemployment benefits in the US rose worse than expected

According to the US Department of Labor, the number of initial claims for unemployment benefits for the week ended February 13, increased by 13 thousand compared with the revised figure of the previous week to 861 thousand applications.

At the same time, analysts were expecting a decrease in the indicator by 28 thousand – to 765 thousand. What is even worse – the indicators of the previous week were revised upward by more than 50 thousand to 848 thousand.

The number of secondary orders, which are counted one week behind the primary orders, also disappointed market participants. Secondary bids fell only slightly to 4.494 million from an upwardly revised 4.558 million. Analysts had expected 4.413 million.

 

February 19. Bitcoin capitalization approached $1 trillion

The bitcoin rate continues to update historical highs, and the cryptocurrency capitalization is approaching $1 trillion. According to the trading data, on Friday, the bitcoin rate rose to $53,250.

The capitalization of the digital currency since the beginning of 2021 has grown by almost $440 billion and, according to experts, is $979.9 billion.At the same time, the index of four cryptocurrencies calculated by Bloomberg (Galaxy Crypto Index), which includes bitcoin, has more than doubled this year.

Such a rapid rise in the value of cryptocurrency is caused by the high interest in it from institutional investors, as well as companies that consider cryptocurrency as a hedge against inflation risks. An additional factor in the price hike is the periodic mentions of #bitcoin by Tesla CEO Elon Musk on his Twitter account.