US open Yellen boosts the mood UBER falls on UK court decision

US futures

Dow  futures +0.2% at 31511

S&P futures +0.4% at 3926

Nasdaq futures +0.5% at 13717

In Europe

FTSE +0.2% at 6631

Dax +0.8% at 14000

Euro Stoxx +0.85% at 3712

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Yellen defends stimulus

US Treasury secretary Janet Yellen helped lift sentiment at the end of the week, once again supporting the need for huge fiscal stimulus. Janet Yellen considered that the $1.9 trillion covid stimulus package is still needed despite impressive retail sales data earlier in the week, citing weakness in the labour market as evidenced by jobless claims hitting a 4 week high.

The Biden administration’s $1.9 trillion package could be voted on in the House of representative as soon as next week according to Nancy Pelosi.

Stocks look to pick up after yesterday’s sell off

US stocks are set to open higher, picking up from yesterday’s losses on the back of weaker jobless claims. The disappointing initial claims highlighted the ongoing struggles of the labour market whilst stocks had been trading at all time highs.

Deere

The heavy machinery manufacturers trades +4.9% pre-market after posting much stronger than expected Q1 earnings and boosting its profit forecast for 2021. EPS $3.87 +137% on revenues $9.112 billion +19%.

UBER

UBER trades -1.9% pre-market after losing its battle in the Supreme Court over drivers’ rights. The ruling means that UBER drivers are entitled to workers rights such as the minimum wage, rest breaks and paid holiday. The ruling could have huge financial ramifications for the ride hailing service as UBER drivers are currently treated as self-employed.

FX – Pound hits new highs

The US Dollar is on the backfoot extending losses from the previous session after weaker than expected US jobless claims damping optimism over a quick economic recovery.

The US Dollar Index (DXY) -0.3% at the time of writing extending losses of the 0.5% gains from the previous session.

GBP struck an almost 3 year high, piercing 1.40 holding on to recent strength even as UK retail sales slumped -8.2% MoM in January significantly worse than -2.5% decline expected.

Analyst Fiona Cincotta looks at the price action of GBP/USD here

GBP/USD trades +0.3% at 1.4017

EUR/USD trades +0.4% at 1.2136

Oil slips lower

US crude oil prices extended the slide lower as refineries in Texas, which had been closed owing to challenging weather conditions resumed production. Texan refineries usually handle millions of barrels a day and are likely to take several days to ramp up. The gap in demand could result in a build in inventories over the coming weeks.

Baker hughes rig count data is due later.

US crude trades -1.5% at $59.50

Brent trades -1% at $63.26

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Looking ahead

 US Markit Manufacturing & Services PMI for January will be released 14:45 UTC.

The data comes after PMI releases in Europe. The flash Eurozone PMIs showed that manufacturing activity expanded at its fastest rate in 3 years jumping to 57.7, up from 54.8. This was well ahead of expectations of 54.3. Meanwhile the service sector, more vulnerable to lockdowns, contracted further to 44.7, down from 45.4.

The UK posted unexpectedly upbeat PMI figures as both the manufacturing and service sector beat forecasts. UK service rebounded firmly to 49.7 up from 39.5 and smashing forecasts of 41.