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AFEX Market Watch - 22nd January 2021

What Happened Yesterday

 Australian unemployment fell by more than had been forecast, from 6.8% to an eight month low of 6.8%. 50,000 jobs were created, in line with analysts’ predictions. This means that 89% of the jobs that were lost at the start of the pandemic have now recovered. It may be slower going from here though as tourism jobs are a year from returning whilst some retail jobs may have been permanently lost.

 The European Central Bank decided it would not take further measures to combat the economic damage of the pandemic and accompanying lockdowns for the time being. It is first assessing the impact of its decision six weeks ago to expand a programme to buy bonds and offer cheap credit to banks. Interest rates also remained unchanged. The Euro was the strongest currency of the day.

 The number of people claiming initial employment insurance in the US fell as did the continuing claimant count. Builders broke ground on 139,000 new houses, the highest figure since 2006. Finally, manufacturing activity in the state of Philadelphia also provided an upside surprise. The US dollar was still the weakest of the major currencies for the day however.

Major Risk Event

Israel has upped the pace of its vaccination programme and remains way ahead of the rest of the world with at 37% of the population having at least one dose of the vaccine. Most of the needles have been given to the over-60’s and early data suggests that both symptoms and infection have been largely prevented. The number of people over 60 fell by a third as did national daily cases for the first time in two months. Encouraging signs.

Today’s Agenda

Australian retail sales are tipped to have fallen in the month of November for the first time since October with data released at 11:30. PMI data (Purchasing Managers’ Indices) for all the regions is released throughout the day and night. Services sector data in Europe and the UK is likely to be very weak due to their lockdowns. American and Australian data should hold up as the former ignores risk and the latter is under little of it.

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