The economic calendar on February 2 is not very tightly packed, but it does contain a couple of important releases.
First among the more important publications will be the January inflation rate from France, which is forecasted at 0.4%, an increase from 0% the previous month. The report turned out to be better than the forecasts, coming in at 0.8%. There will also be an unemployment change report from Spain, one of the most affected countries when it comes to the coronavirus pandemic.
In addition, UK housing prices rose less than expected at 6.4% in January.
The highlight of the day will be GDP growth rate reports for the last quarter of 2020 from both the eurozone and Italy specifically. The forecast for Italy is that GDP has grown at a negative rate of -6.7%, while in the eurozone that number is -5.4% YoY. These are both preliminary reports but they will have an impact on pairs with the euro.
Recent data out of the EU that was disappointing prompted a massive sell-off of the euro, which then boosted the US dollar, a trend that may continue today, depending on the data.
At the end of the day there will be a couple of speeches by prominent members of the Federal Reserve, but no major announcements are expected.
As for the coronavirus pandemic, the number of people that have been infected worldwide is close to 104 million. Over 2.2 million of the cases have, unfortunately, resulted in death. The overall curve of daily infections has been gradually going down since late January, but lethalities remain much higher now than during the previous waves of the pandemic.
The United States remains the most affected country, with over 26.9 million Covid-19 cases. Though the new administration under President Biden has ramped up the vaccination campaign in the US, many challenging months remain ahead. Biden himself has repeatedly warned that the US will most likely see half a million deaths before the end of the pandemic.
Things appear to be calming down in Europe as well, though Western European countries and the United Kingdom are still seeing around 20,000 new cases per day. Some sort of lockdown will most likely stay in place at least until the end of February.
Meanwhile, there is a calm gradually spreading in the stock market. The aggressive retail action surrounding GameStop, AMC, and others seems to be dialing back and it’s business as usual today.
European stock indices are slightly up today due to signs that the worst of the pandemic may be behind the continent. Similarly, stock indices in the US are also recovering today, boosted by hopes that Biden’s administration will deliver fiscal stimulus swiftly, as steps are already being taken to implement the President’s proposal.
