Fundamental Comment

Economic Week: GDP data, coronavirus developments

GDP data and coronavirus developments in focus

Financial markets' participants will be carefully watching the Gross Domestic Product (GDP) data released by number major economies this week, while they will continue to monitor the latest developments regarding the spread of the deadly Corona virus.

US Dollar

The US dollar will remain under scrutiny, as investors will follow some important economic data from the United States, with a reminder that the dollar has benefited greatly in the recent period from concerns related to the spread of the Corona virus.

Among the most important reports issued this week will be the second GDP reading for the fourth quarter, which may confirm a steady pace of growth of 2.1 percent annual growth in the world's largest economy, the same as the final reading for the third quarter.

Eyes will focus on U.S. durable goods, which may show a 1.5 percent decrease in January after it recorded a rise of 2.4 percent in December.

Other economic reports on the housing sector, as well as personal spending and consumer confidence, may receive some attention from investors.

Euro

The euro is likely to be affected by the general trend in the markets due to the absence of highly important economic data from the eurozone.

Nevertheless, the most prominent data is the second GDP reading from Germany, which may confirm that no growth was recorded in the fourth quarter, following a growth rate of 0.2 percent in the third quarter.

Investors will also focus on inflation data, as the flash consumer price index from the eurozone is expected to settle at 1.2 percent in the year ended February.

Pound Sterling

The movements of the sterling will depend on the general direction in the markets and the movements of the dollar in particular, amid the absence of important economic data from the British economy.

However, investors must keep their eyes open on the latest developments in the political situation inside Britain, as well as negotiations with the European Union regarding the form of trade agreement between the two parties after Britain's exit from the European Union.

Commodities

Gold prices recorded their highest levels in seven years by the end of last week, in addition to registering their best weekly performance in more than six months, because of haven demand on the back of the rising of infected cases of the Corona virus.

This week, the movements of the precious metal will depend on the markets' reaction to the latest developments concerning the spread of the Corona virus, noting that if the panic continues, gold will resume achieving more record highs.

With regard to oil, prices resumed rebound last week, but it came under pressure at the end of the week due to renewed concerns about fuel demand with the spread of the Corona virus epidemic beyond China.

Oil price movements this week will hinge on the developments of the virus, as well as the weekly US government report tracking the change in crude stockpiles.

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