8 October 2018 Weekly Analysis
GCMAsia Weekly Report: October 8 – 12
Market Review (Forex): October 1 – October 5
US Dollar
The US dollar had undergone a sharp depreciation from its 1 month-high amid the releasement of economic data Nonfarm Payrolls (NFP) before recovering some of its losses bolstered by US Unemployment Rate before closing the market at 95.25 on Friday.
The NFP data on Friday had an actual reading of 134K which is much lower compared to the forecasted value of 185K. Acting as one of the major indicators for the dollar, the data caused investors to move their investment towards anti-USD which send the price of dollar bearish. However, its losses were limited after investors react towards the US Unemployment Rate data which had an actual reading of 3.7%, 0.1% lower compared to the forecasted value of 3.8%. A lower unemployment rate indicates a healthier employment status for the US as more people own a job.
Overall, the dollar continues to strengthen against a basket of six major currencies as investors start to recover their confident towards the dollar amid better US unemployment status, in addition to expected future rate hikes up to the neutral rate of 3.4%.
USD/JPY
USDJPY pair rose to a highest high at 114.50 since November 2017 last week before falling back to 113.65 during late Friday trading session. Overall, the pair remained traded in an upward trend.
EUR/USD
EURUSD fell throughout last week before closing higher at 1.1530 during last week Friday session amid poor NFP data which weakened the dollar. In general, the pair was still traded in a down trend last week due to Italy’s budget crisis where they decided to settle with 2.4% deficit target for the following year which triggered a sell-off in the Italian bonds.
GBP/USD
GBPUSD undergone an appreciation throughout last week before closing last Friday session at 1.3115. The pair was falling during early of the week before regaining its strength amid positive Brexit sentiment where Theresa May is trying her best to make a deal before the 2 weeks deadline.
Market Review (Commodities): October 1 – October 5
GOLD
Gold price appreciated throughout the week as dollar faces uncertainty before the releasement of NFP data. The yellow metal surged earlier of the week before falling back down to $1,203.60 per troy ounce during late Friday trading session.
Overall, the gold price appreciated throughout the whole week as investors shift their investment towards the gold market as a safe-haven asset amid uncertainty towards the dollar before the releasement of NFP data. Later that week, gold price managed to close the market with an overall gained as poor NFP data weakened the dollar.
Crude Oil
The price of crude oil was increasing throughout last week as Iran sanctions deadline came closing in. The commodity price increased to $74.30 per barrel during last Friday’s session.
The crude oil market surge to a 4-year high earlier last week when concerns grew over the sanction of Iran that will take into effect on 4th November while US insisted that they will not use their reserve crude to stabilize the fall in supply from Iran. Confidence over global decrease in oil supply had since created positive sentiment towards the oil market.
However, the crude oil fell from its 4-year high later that week as Saudi Arabia and Russia had made a private discussion to stabilize the short on supply from Iran’s sanction. In addition to that, the Crude Oil Inventories data which had a much higher than expected reading worsen investors confident towards crude oil market.
Weekly Outlook: October 8 – 12
For the week ahead, investors will focus on the release of various economics data such as PPI and Core CPI which contribute to the measurement of inflation level of the country.
As for oil traders, they will be eyeing on US inventories level reported by API and EIA to gauge the strength of crude demand for world’s largest oil consumer.
Highlighted economy data and events for the week: October 8 – 12
| Monday, October 8 |
Data EUR – German Industrial Production (MoM) (Aug)
Events N/A
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| Tuesday, October 9 |
Data EUR – German Trade Balance (Aug)
Events N/A
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| Wednesday, October 10 |
Data CrudeOIL – API Weekly Crude Oil Stock GBP – GDP (MoM) GBP – Manufacturing Production (MoM) (Aug) USD – PPI (MoM) (Sep)
Events N/A
|
| Thursday, October 11 |
Data USD – Core CPI (MoM) (Sep) CrudeOIL – Crude Oil Inventories
Events CrudeOIL – OPEC Monthly Report EUR – ECB Publishes Account of Monetary Policy Meeting
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Friday, October 12
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Data EUR – Industrial Production (MoM) (Aug) EUR – German CPI (MoM) (Sep) USD – Michigan Consumer Sentiment (Oct)
Events CrudeOIL – IEA Monthly Report
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