Monday, March 1, 2021
Energy futures are seeing gains on Monday amid progress towards a US stimulus package, optimism over COVID-19 vaccines, strength in European equities and in US stock market index futures, despite strength in the US dollar. Market traders are looking ahead to the German CPI and US manufacturing and construction data for further direction.
On Saturday, the US House of Representatives passed a $1.9 trillion coronavirus relief package, which has been sent to the Senate for a vote. The relief package would pay for vaccines and medical supplies, as well as send financial aid to small businesses and state and local governments. The bill also includes $1,400 direct payments to individuals and unemployment benefits of $400 per week through August. In more supportive news, the Johnson & Johnson COVID-19 vaccine has been approved by the CDC and distribution of 3.9 million doses already started on Sunday.
In economic news, the NBS Manufacturing PMI in China came in at 50.6 last month, below the Reuters poll forecast at 51.1. The Caixin Manufacturing PMI was also a miss as the index came in at 50.9, missing forecasts at 51.5. On the other hand, the Jibun Bank PMI showed that the Japanese manufacturing sector expended last month by coming in at 51.4, up from 50.6 in January. The Shanghai Composite closed 1.2% higher, the Hang Seng added 1.6%, and the Nikkei rallied 2.4%. The Markit/Nikkei PMI in India fell from 57.7 to 57.5 last month.
In European news, the final Markit Manufacturing PMI for the Eurozone came in at 57.9, above consensus at 57.7. The index for Germany also beat expectations by coming in at 60.7 (vs. 60.6), and the French PMI came in at 56.1, topping forecasts at 55.0. In UK news, the final CIPS/Markit Manufacturing PMI for last month came in at 55.1, above consensus at 54.9. The Consumer Price Index in Italy rose 0.1% last month, while forecasts called for no change. European shares were trading in the black this morning with the DAX having added 0.9%, while the CAC 40 and the FTSE 100 were both up 1.3%. As of this writing, US stock market index futures were seeing gains of between 0.8% (Dow f) and 1.1% (Nasdaq f). Unsupportive for crude oil prices, the US dollar index was up 0.2%.
Energy futures weakened on Friday amid a rally in the US dollar, losses in European equities, and a rise of 4 in the US oil rig count. WTI crude fell $2.03 to settle at $61.50 a barrel, Brent crude lost 75 cents to close at $66.13 a barrel, gasoline futures fell 1.53 cents to $1.8770 per gallon, heating oil futures dropped 5.01 cents to $1.8565 per gallon and natural gas futures edged down 60 points, settling at $2.771 per MMBTU.
The 6-10 day forecast sees below-normal temperatures on the East Coast, while well-above normal temperatures are expected in the central part of the country.