31 December 2018 Weekly Analysis
GCMAsia Weekly Report: December 31 – January 4
Market Review (Forex): December 24 – December 28
US Dollar
The US dollar slumped and closed lower at 95.85 as of writing amid poor data such as Pending Home Sales released by US which dragged the dollar last week.
Throughout the week, market sentiment was weak due to thin trading conditions in the market following last week Christmas holiday. The greenback struggled to maintain its momentum and dragged lower after economy data such as CB Consumers Confidence and Pending Home Sales which missed market’s expectation illustrating an economy slowdown in the US. Besides that, market was also reacted towards political uncertainty in US where Donald Trump has threatened to shut down the government if the parliament does not approve funding for Mexico border wall.
Overall, sentiment towards dollar remains frail as market will now focus ahead on further data and news such as Non-Farm Payroll this week to determine further direction as global markets were also expected to be thin following New Year’s festival.
USD/JPY
USDJPY continue to extends its downside after it closing Friday’s market at 110.40. Japanese yen continue to be demanded by market throughout the week amid ongoing global market uncertainty in market and as well political instability in US such as government shutdown causing investors continue to favor the safe-haven yen.
EUR/USD
EURUSD strengthened earlier last week while closing Friday’s market session lower at 1.1439. The euro appreciated throughout the week following market. Despite Eurozone remains pressured by dovish statement from Europe Central Bank (ECB) regarding economy outlook, economic growth slowdown and US political turmoil has caused investors into risk averse mode and bid into steady market such as yen and euro.
GBP/USD
GBPUSD continues to struggle last week while closing its price around 1.2685 on Friday’s market session. GBPUSD remains pressured amid Brexit uncertainty continues to haunt market sentiment while the Parliamentary vote on Brexit’s agreement is on the 14th of January and further news on the negotiations between Theresa May and the EU is still expected by the market.
Market Review (Commodities): December 24 – December 28
GOLD
Gold price continue to move higher while closing last week Friday’s market at 1280.75 per ounce following US uncertainty and global growth concerns continues to support the safe-haven asset. The yellow metal soars to new high as investors are getting off from the riskier market and bid into safe-haven markets such as yen and gold following uncertainty market outlook and a potential political turmoil in the US.
Overall, gold price remains sought after by market following global uncertainty outlook and US political issues have caused investors to continue adding their bid into the yellow metal.
Crude Oil
The price of crude oil has bounce back from 18-month lows while closing last week Friday’s market at 45.10.
Crude oil was traded higher and recover from its lows last week following reports on a drop In North America may have pushed the price higher. According to data, U.S may have two oil rigs, but Canada at the same time have slashed as many as 43 rigs from a week earlier. Besides that, sentiment was also further boosted by positive news in the ongoing trade negotiations between US and China where President Donald Trump has stated that he had a “long and very good” phone call with Chinese Premier Xi Jinping.
Overall, the crude oil has slowly recovered while market will now concentrate on upcoming OPEC and its allies for a production cut that could sent the price back on the rise.
Weekly Outlook: December 31 – January 4
For the week ahead, investors will focus on various data such as highly anticipated Non-Farm payroll data which will provide a clearer outlook on US current economic outlook and future prospect.
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: December 31 – January 4
| Monday, December 31 |
Data CNY – Manufacturing PMI (Dec)
Events N/A
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| Tuesday, December 1 |
Data N/A
Events N/A
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| Wednesday, December 2 |
Data CNY – Caixin Manufacturing PMI (Dec) EUR – German Manufacturing PMI (Dec) GBP – Manufacturing PMI (Dec)
Events N/A
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| Thursday, December 3 |
Data GBP – Construction PMI (Dec) USD – ADP Nonfarm Employment Change (Dec) USD – Initial Jobless Claims USD – ISM Manufacturing PMI (Dec) USD – New Home Sales
Events N/A
|
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Friday, December 4
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Data EUR – German Unemployment Change (Dec) GBP – Service PMI (Dec) EUR – CPI (YoY) (Nov) USD – Nonfarm Payrolls (Dec) USD – Unemployment Rate (Dec) CAD – Employment Change (Dec)
Events USD – Fed Chair Powell Speaks
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