06 September 2021 Weekly Analysis
GCMAsia Weekly Report: September 6 – 10
Market Review (Forex): August 30 – September 4
US Dollar
The dollar index which traded against a basket of six major currency pairs slumped significantly last week over the backdrop of the dovish statement from Federal Reserve as well as the bearish jobs data from the United States last week. The Dollar Index was closing its price on last Friday session at the price of 92.10.
Earlier, Fed Chairman Powell struck a cautious tone in his speech during the highly anticipated Jackson Hole that was held recently. While Powell indicated that the central bank is likely to begin tapering before the end of the year, he also warned against the risks of premature policy tightening and reiterating that there was still “much ground to cover” for the US economy to reach maximum employment. On the economic data front, Bureau of Labor Statistics reported that U.S. Nonfarm Payrolls notched down significantly from the previous reading of 1,053K to 235K, missing the market forecast at 750K. Meanwhile, U.S. Unemployment Rate came in at 5.2%, same as the market forecast at 5.2%. Such bearish job data would be prompting the Federal Reserve continue to implement their aggressive expansionary monetary policy plan, which increasing the money circulation in the financial market while dragging down the appeal of the US Dollar. Besides, rising Covid-19 cases in recent weeks have insinuated concerns that the economic recovery could stall, which further dialing down the market optimism toward the economic progression in United States.
As for now, investors would continue to scrutinize the latest updates with regards of further crucial economic data as well as monetary policy statement from Federal Reserve in order to gauge the likelihood movement for the US Dollar.
USD/JPY
The pair of USD/JPY received bearish momentum on last week while ending last Friday session at the price of 109.75. The overall bearish momentum for the pair of USD/JPY was mainly due to the depreciation of US Dollar. Besides, the safe-haven Japanese Yen received further bullish momentum following the United States unleashed the negative job data. Such negative data would be indicating that the major economic growth remained subdued, diminishing risk appetite in the global financial market while increasing market demand toward the safe-haven Yen.
EUR/USD
The pair of EUR/USD surged throughout the week while ending last week session at the price of 1.1755. The overall bullish momentum for the pair of EUR/USD last week was mainly due to the depreciation of the US Dollar. Besides, the Euro extend its gains over the backdrop of bullish economic data from European region. According to Destatis, Germany Unemployment Change came in at -53K, better than the market forecast at -40K.
GBP/USD
The pair of GBP/USD had rose last week while closing its market price at 1.3625. The overall bullish momentum for the pair of GBP/USD last week was mainly due to the depreciation of the US Dollar. Nonetheless, the gains experienced by the Pound Sterling was limited amid negative data on last week. According to the Markit Economics, the U.K. Services Purchasing Managers Index (PMI) and U.K. Composite Purchasing Managers’ Index (PMI) came in at 55.0 and 54.8, both worse than the market expectation at 55.5 and 55.3 respectively.
Market Review (Commodities): August 30 – September 4
GOLD
Gold price surged last week with the price of $1781.15 per troy ounce amid the U.S. Federal Reserve Chairman Jerome Powell unleashed his dovish stance and bearish job data from United States. Earlier, Fed Chairman Powell struck a cautious tone in his speech during the highly anticipated Jackson Hole that was held recently. While Powell indicated that the central bank is likely to begin tapering before the end of the year, he also warned against the risks of premature policy tightening and reiterating that there was still “much ground to cover” for the US economy to reach maximum employment. In addition, the negative economic data from United States had spurred negative prospect for the economic growth, which diminishing the risk appetite in the FX market while increasing the appeal for the safe-haven gold.
CrudeOIL
The price of crude oil surged significantly last week while closing last Friday session with the price of $69.55. The oil market edged higher over the backdrop of upbeat inventory data last week. According to Energy Information Administration (EIA), U.S. Crude Oil Inventories notched down significantly from the previous reading of -2.979M to -7.169M, better than the market forecast at -3.088M. Nonetheless, the gains experienced by the crude oil was limited amid spiking numbers of the Delta variant around the world had diminished the appeal of crude oil demand.
Weekly Outlook: September 6 – 10
For the week ahead, investors would continue to focus on crucial economic data such as US Initial Jobless Claims in order to determine further direction. Besides that, the ongoing situation with coronavirus 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: September 6 – 10
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 6th September 2021 | |||||
| 16:30 | GBP | Construction PMI (Aug) | – | 56.9 | 58.7 |
| Tuesday – 7th September 2021 | |||||
| 12:30 | AUD | RBA Interest Rate Decision (Sep) | – | 0.10% | 0.10% |
| 12:30 | AUD | RBA Rate Statement | – | – | – |
| 17:00 | EUR | German ZEW Economic Sentiment (Sep) | – | 30.0 | 40.4 |
| Wednesday – 8th September 2021 | |||||
| 07:50 | JPY | GDP (QoQ) (Q2) | – | 0.40% | 0.30% |
| 22:00 | USD | JOLTs Job Openings (Jul) | – | 9.281M | 10.073M |
| 22:00 | CAD | BoC Interest Rate Decision | – | 0.25% | 0.25% |
| 22:00 | CAD | Ivey PMI (Aug) | – | – | 56.4 |
| Tentative | CAD | BOC Press Conference | – | – | – |
| Thursday – 9th September 2021 | |||||
| 19:45 | EUR | ECB Monetary Policy Statement | – | – | – |
| 19:45 | EUR | ECB Interest Rate Decision (Aug) | – | 0.00% | 0.00% |
| 20:30 | USD | Initial Jobless Claims | – | 335K | 340K |
| 20:30 | EUR | ECB Press Conference | – | – | – |
| 23:00 | USD | Crude Oil Inventories | – | – | -7.169M |
| Friday – 10th September 2021 | |||||
| 14:00 | GBP | GDP (MoM) | – | – | 0.80% |
| 14:00 | GBP | Manufacturing Production (MoM) (Jul) | – | 0.10% | 0.20% |
| 20:30 | USD | PPI (MoM) (Aug) | – | 0.60% | 1.00% |
| 20:30 | CAD | Employment Change (Aug) | – | 75.0K | 94.0K |