24 September 2018 Weekly Analysis
GCMAsia Weekly Report: September 24 – 28
Market Review (Forex): September 17 – September 21
US Dollar
The US dollar bounced up from its 2-month low drop before closing on Friday’s market after Brexit headline which caused investors’ sentiment to turn negative towards the riskier assets such as the sterling. Dollar index edged up by 0.32% while closing the price at 94.22 last Friday.
The concerns over Brexit grew on Friday as the EU rejected UK Prime Minister Theresa May post-Brexit plans, adding that the UK and EU are reaching an impossible progress for the post-Brexit deal which immediately changed investors’ sentiment towards riskier assets and shifting their portfolio into the safer dollar. Greenback also managed to bounce higher after the release of US economic data Manufacturing PMI for the month of September which had higher actual reading of 55.6 compared to the forecasted reading of 55.0.
Overall, the dollar managed to regain some of its strength against its rivals after its biggest weekly drop in the past 7 months. The price of the dollar for this week will depend solely on the interest rate decision by the Fed on Wednesday as well as US President Donald Trump’s next move in the trade wars.
USD/JPY
USDJPY pair rose 0.11% to 112.60 during late Friday trading session.
EUR/USD
EURUSD had dropped 0.24% to 1.1749 during last week Friday session.
GBP/USD
GBPUSD had plunged 1.46% to 1.3069 during late Friday New York session. The single currency lost all its gains during the week as concerns grew amid UK Prime Minister Theresa May’s comment on the post-Brexit deal being impasse as the EU rejects May’s post-Brexit plans.
Market Review (Commodities): September 17 – September 21
GOLD
Gold price plunged as dollar strengthened amid Brexit concerns and strong US Manufacturing PMI. The yellow metal closed last week markets at a loss of 0.64% to 1199.44 a troy ounce.
The gold price was seen falling as the greenback started regaining a bullish momentum amid Brexit concerns and a positive sentiment from the US Manufacturing PMI economic data.
Crude Oil
The price of crude oil closed the market at a higher price despite US President Donald Trump’s Tweet stated that the OPEC should stop oil price increase and lower its prices as soon as possible. The commodity price spiraled up by 0.75% to $71.09 per barrel during last Friday’s session.
The crude oil started the week at a lower price amid increasing tension in the trade war between the US and China as China retaliated US $200 billion tariffs by imposing tariffs on $60 billion of US goods which caused the price of crude oil to fall. The commodity successfully regained its strength before closing on Friday despite the Tweet from President Donald Trump where he furiously stated that the OPEC who are monopolizing the market are increasing its price ridiculously and it should start lowering the prices. Investors shrugged off that Tweet and focus on the upcoming weekly oil rig count data which will be a major indicator of demand for oil products. On the other hand, the surged in crude oil price was also capped as investors fear of the report that the OPEC were expected to discuss a 500k barrel per day increased in production.
Overall, crude oil price can be seen increasing for the past week as investors’ sentiment towards the crude oil remained positive for the week despite all the bad news, probably due to the closing in of Iran sanctions which will be held effect early November.
Weekly Outlook: September 24 – 28
For the week ahead, investors will remain focus on the release of various economics data especially UK GDP which is scheduled on this week. The data which is an indicator of inflationary pressure that may anticipate interest rates to rise. Thus, investor will keep an eye for the release to attain further signals regards of the pound sterling momentum.
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: September 24 – 28
| Monday, September 24 |
Data EUR – German Ifo Business Climate Index
Events EUR – ECB President Draghi Speaks
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| Tuesday, September 25 |
Data USD – CB Consumer Confidence (Sep)
Events N/A
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| Wednesday, September 26 |
Data USD – New Home Sales (Aug) CrudeOIL – Crude Oil Inventories
Events USD – FOMC Member Bullard Speaks
|
| Thursday, September 27 |
Data USD – Core Durable Goods Orders (MoM) (Aug) USD – GDP (QoQ) (Q2) USD – Pending Home Sales (MoM) (Aug)
Events NZD – RBNZ Press Conference
|
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Friday, September 28
|
Data CNY – Caixin Manufacturing PMI (Sep) EUR – German Unemployment Change (Sep) GBP – GDP (YoY) (Q2) GBP – GDP (QoQ) (Q2) EUR – CPI (YoY) (Sep) CAD – GDP (MoM) (Jul)
Events USD – Fed Chair Powell Speaks GBP – MPC Member Ramsden Speaks
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