06 March 2023 Weekly Analysis
GCMAsia Weekly Report: March 6 – 10
Market Review (Forex): Feb 27 – March 3
US Dollar
The Dollar Index, which is traded against a basket of six major currencies, lost its ground throughout the week amid the market risk-on sentiment improved as well as dovish comment from the Fed member. The Dollar Index has closed its market price at 104.35.
Earlier last week, the dollar index received a strong buying momentum following the release of the positive data which included Core Durable Goods Orders and Pending Home Sales. However, the gains of the Greenback were limited by the weaker-than-expected CB Consumer Confidence for the month of February. According to Conference Board, the Consumer Confidence dropped from 106.0 to 102.9, significantly lower than the consensus forecast at 108.5, mirroring the pessimistic views of the US consumers against its nation economic outlook. Moreover, the market risk appetite revived after UK and EU sealed the Northern Ireland protocol deal. Earlier of the week, both parties finally struck a decisive breakthrough on a post-Brexit deal to avoid a hard border on the island of Ireland. With such a backdrop, the surge in market risk appetite has infused some strength into the riskier currencies such as Pound and Euro, dragging down the value of dollar index. Lastly, Atlanta Federal Reserve President Raphael Bostic, has sparked a large sell-off pressures in the US dollar market as he said he preferred a “slow and steady” approach by the Fed to taming inflation.
Going forward, the market participants will eye on the upcoming crucial labor data, such as NonFarm Payroll and Unemployment Rate, in order to gauge the further direction of the dollar index.
USD/JPY
The pair of USD/JPY was traded lower last week while closing its market price at 136.00. The Japanese Yen received significant bearish momentum as the next governor of the Bank of Japan revealed his dovish-tilted stance, whereby he intends to maintain the ultra-easing policy at the moment, as the inflation rate will start to drop soon. Besides, the Statistics Bureau posted the Japan Tokyo Core Consumer Price Index (CPI) YoY at 3.3%, dropped from the previous month’s reading at 4.3%. This downbeat data showed some sign of inflation easing in the country.
EUR/USD
The pair of EUR/USD jumped last week while closing its market price at 1.0625. The EURUSD received significant bullish momentum following the hawkish statement from the European Central Bank (ECB) and the announcement of the stronger-than-expected CPI data. Inflation European Consumer Price Index (CPI) YoY has come in higher than expected in the Eurozone this week, pointing to more interest rate hikes by the European Central Bank, on top of the 50 basis points that have already been signaled for mid-March. ECB President Christine Lagarde said on Thursday that interest-rate increases may need to continue beyond the planned move, as policymakers will do everything to return inflation to the 2% target from the current above 8%.
GBP/USD
The pair of GBP/USD hovered near the same level last week while ending last week session at the price of 1.2025. The GBPUSD received significant bullish momentum last week following the release of the upbeat manufacturing PMI. According to Markit, the UK Manufacturing PMI rose from 49.2 to 49.3, slightly higher than the consensus forecast at 49.2, showing that the UK manufacturing sector was experiencing recovery. Besides, the still-hawkish stance from the Bank of England (BoE) Chairman Bailey also boosted the value of Pound to a higher level. In his recent speech, he revealed that inflation rate remains high at this point in time, although it started to drop from the highest level.
Market Review (Commodities): Feb 27 – March 3
GOLD
Gold prices skyrocketed while closing its market price at $1853.50 per troy ounce. With the dovish comment from the Fed member, it prompted the investors to shy away from the dollar market and enter into gold market. Besides, investors had also priced in the positive economic data from the US. Thus, the gold prices experienced a lesser-than-expected losses during the week despite US continued to contribute upbeat economic data.
CrudeOIL
Crude oil prices surged while ending last week session at the price of $79.30 per barrel. The oil prices experienced huge buying pressures throughout the week as the Russia has started its oil deep production cuts on 1st March 2023, which up to 25% of the total oil production of the nation. Besides, the upbeat Manufacturing PMI and Non-Manufacturing PMI for the month of February also sparked some positive momentum in the oil market. The upbeat economic data proved that the China economy is recovering, as widely expected. Besides, Saudi Arabia increased oil selling price for Asia and Europe for April, urging the oil prices to hit the highest level since a month ago.
Weekly Outlook: March 6 – 10
For the week ahead, investors would continue to focus on crucial economic data such as US NFP, Jerome Powell Testifies this week in order to determine further direction. Besides that, the ongoing situation with Ukraine-Russia war will also be in the eyes of investors.
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: March 6 – 10
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 6th March 2023 | |||||
| 17:30 | GBP | Construction PMI (Feb) | – | 49.1 | 48.4 |
| 23:00 | CAD | Ivey PMI (Feb) | – | 55.9 | 60.1 |
| Tuesday –7 March 2023 | |||||
| 8:30 | AUD | Retail Sales (MoM) | – | 1.90% | -4.00% |
| 11:30 | AUD | RBA Interest Rate Decision (Mar) | – | 3.60% | 3.35% |
| 11:30 | AUD | RBA Rate Statement | – | – | – |
| 23:00 | USD | Fed Chair Powell Testifies | – | – | – |
| Wednesday – 8th March 2023 | |||||
| 1:00 | USD | EIA Short-Term Energy Outlook | – | – | – |
| 5:30 | USD | API Weekly Crude Oil Stock | – | – | 6.203M |
| 18:00 | EUR | ECB President Lagarde Speaks | – | – | – |
| 21:15 | USD | ADP Nonfarm Employment Change (Feb) | – | 195K | 106K |
| 23:00 | USD | Fed Chair Powell Testifies | – | – | – |
| 23:00 | USD | JOLTs Job Openings (Jan) | – | 10.600M | 11.012M |
| 23:00 | CAD | BoC Interest Rate Decision | – | 4.50% | 4.50% |
| 23:30 | USD | Crude Oil Inventories | – | – | 1.165M |
| Thursday – 9th March 2023 | |||||
| 7:50 | JPY | GDP (QoQ) (Q4) | – | 0.20% | 0.20% |
| 21:30 | USD | Initial Jobless Claims | – | 195K | 190K |
| Friday – 10th March 2023 | |||||
| 11:00 | JPY | BoJ Monetary Policy Statement | – | – | – |
| 13:00 | JPY | BoJ Press Conference | – | – | – |
| 15:00 | GBP | GDP (MoM) (Jan) | – | 0.10% | -0.50% |
| 15:00 | GBP | Manufacturing Production (MoM) (Jan) | – | -0.20% | – |
| 15:00 | GBP | Monthly GDP 3M/3M Change (Jan) | – | -0.10% | -0.30% |
| 15:00 | EUR | German CPI (YoY) (Feb) | – | 8.70% | 8.70% |
| 21:30 | USD | Nonfarm Payrolls (Feb) | – | 200K | 517K |
| 21:30 | USD | Unemployment Rate (Feb) | – | 3.40% | 3.40% |
| 21:30 | CAD | Employment Change (Feb) | – | 10.0K | 150.0K |
| 23:00 | EUR | ECB President Lagarde Speaks | – | – | – |
Risk Statement:
Forex, Gold, Crude Oil, Commodities, CFD and all other margin trading investment products involve high level of risk and may not be suitable for all investors. Your previous investment success in stock, futures or any other investment achieved does not mean that all your future investment will obtain the same results. You should carefully consider your investment objectives; risk associated and seek professional advice before deciding to trade or if you have any doubts.