US encouraging statistics & China’s data manipulations

6 Feb 2020

The news that a coronavirus vaccine has been found so far remains more likely to be rumors and expectations. At least if you look at the official statistics on the number of deaths and cases of coronavirus. The number of deaths approaches 500, and those infected 30,000.

And we are talking about official data. According to many experts, government figures are underestimated at times. The reason for this is both conscious and deliberate manipulation, and a banal inability to take into account all the dead. And while quarantine in China continues, the violation of global supply chains is becoming more and more noticeable every day, as well as the harm it does to the global economy.

Of the other news yesterday, it is worth noting unexpectedly good statistics from the United States. According to ADP, US employment increased by 291K jobs (forecast was + 157K). This is the maximum value since March 2017. Business activity indices were also better than expected. In particular, the ISM Index in the non-manufacturing sector in January reached 55.5 points (the forecast was 55.1).

The dollar against the backdrop of such data strengthened across the spectrum of the foreign exchange market. But this growth cannot be called rampant. So we rather see it as an opportunity to enter the counter-positions from the most attractive points. These are the pairs EURUSD, GBPUSD, USDJPY, and USDCAD. But these inputs are with minimal stops, because a) positions against the current movement; b) the current movement has serious fundamental foundations and momentum for further development.

Shelter-assets paused yesterday in their fall. We remain of our opinion and will continue to look for points for purchases of gold and the Japanese yen both within the day and in the medium term.

Oil yesterday quite unexpectedly showed significant growth. What is characteristic, the growth occurred against the background of official data on oil reserves in the USA, which showed a rather substantial increase. However, this did not prevent the asset (WTI benchmark) from gaining a foothold above 51.20. Our position on the sale of oil eventually lost its relevance. However, if oil goes below 51 again, a short position can be restored.

Thursday in terms of macroeconomic statistics will be a fairly calm day. So we continue to monitor the epidemic and follow the developed plan.