Week Ahead Have We Seen the Top in Coronavirus Cases

Next week will be a pivotal week in terms of discovering if the rate of increase has topped on the number of newly discovered Coronavirus cases. China’s National Health Commission said that as of Thursday, the total infection number was 31,161 and the total number of deaths was 636. However, the Global Times has been reporting that the rate of increase in infection has slowed, as most current cases have already been tested. That means we could see a lowering of new cases moving forward. In addition, they reported that the death rate of coronavirus infections nationwide is 2%, with cities in Hubei, except for Wuhan, declined to 1.3%. In Wuhan, death rate is near 4.1%. There have been unsubstantiated news stories that vaccines may soon be available. Unsubstantiated or not, markets chose to believe it, and add risk in stocks. However, commodities such as oil and copper, and commodity currencies such as the Aussie and Kiwi, are still trading need their 2020 lows. Many companies will reopen on Monday (although many people still encouraged to work from home), and hopes are that this will stem Q1 GDP losses. Today, S&P revised down their annual growth forecast for China to 5.0% from 5.7%.

With the debacle in Iowa this past week in the Democratic caucuses, long shot Pete Buttigieg pulled out the top spot with 13 delegates. Bernie Sanders, Elizabeth Warren, and Joe Biden followed, each receiving 12, 8, and 6 delegates respectively. This was considered a big loss for former Vice President Joe Biden; however, the race has just begun and there’s a long way to go. This week, voters will go to the polls in New Hampshire for the first primary of election season. Buttigieg and Sanders will look to continue the momentum while Biden tries to jump back into the race. (Michael Bloomberg is also running for the democratic nomination; however, he has not been a factor yet).

Beginning of month data came in better than expected, for the most part. Global PMIs were revised higher and US and Canadian payroll data was also better than expected. The only downfall was Industrial Production today out of some European economies (Germany in particular). The second week of the month typically sees a slowdown in data releases. Expected economic highlights are as follows:

Monday

China Inflation Rate
China PPI
Canadian Housing Starts and Building Permits

Tuesday

UK GDP Q4
UK Trade Balance

Wednesday

Australian Consumer Confidence
RBNZ Interest Rate Decision
Eurozone Industrial Production
Fed Chair Powell Testimony
Crude Oil Inventories

Thursday

RBA Gov Lane Speech
BOC Gov Poloz Speech
Fed Chair Powell Testimony

Friday

Germany GDP Q4
Eurozone Q4
US Retail Sales
US Industrial Production
US Michigan Consumer Expectations

Chart to Watch: Daily Copper

Source: Tradingview, FOREX.com

Earlier this week, we discussed how copper was down an unprecedented 13 days in a row before bouncing with risk. After testing stops below 2.50, copper bounced into horizontal resistance, however failed from taking out the 38.2% retracement from the highs of January 16^th (which was one day after the US-China Phase One trade deal was signed) to the February 3^rd lows. In doing so, the base metal formed a shooting star candle, which is a one candlestick reversal formation. This also allowed for the RSI to unwind and move back into neutral territory. However, price today put in a long black bearish candle from 2.598 down to 2.544. If copper trades below 2.480, it has room to run!

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.