13 June 2022 Weekly Analysis
GCMAsia Weekly Report: June 13 – 17
Market Review (Forex): June 6 – 10
US Dollar
The Dollar Index which traded against a basket of six major currencies received significant bullish momentum last week after the upbeat economic data had been unleashed, which prompting investors to shift their capitals toward US Dollar. The Dollar Index has closed its market price at 104.23.
Last week, the US Dollar index extended its gains following the bullish Nonfarm Payfolls data has been announced. According to Bureau of Labor Statistics, the US Nonfarm Payrolls for May came in at the reading of 390K, which higher than the market expectation of 325K. As the number of people employed had increased, it would likely to bring positive prospects toward economic momentum in US, which prompted investors to shift their capitals into US Dollar. Besides, the Dollar Index extended its gains following the US CPI data was released. The US Core Consumer Price Index (CPI) MoM for May came in at the reading of 0.6%, exceeding the economist forecast of 0.5%. It indicated that the inflation in US had rose by 8.6%, which reached its 41-years highs. It adding odds of aggressive rate hike from Federal Reserve in order to lower down the inflation risk. The implementation of tightening monetary policy would likely to increase risk-off return of investors, which sparked the appeal of the US Dollar. For now, investors would continue to scrutinize the latest updates with regards of Fed interest rate decisions which will be announced on June 16 in order to gauge the likelihood movement of US Dollar.
USD/JPY
The pair of USD/JPY extended its gains last week while closing its market price at 134.40. The pairing received bullish momentum amid the backdrop of Bank of Japan (BoJ) remained its dovish tone. According to Reuters, the BoJ remains one of the few global central banks to maintain a dovish stance while others have adopted tightening policies of hiking interest rates to combat inflation. It would likely to stoke a shift market sentiment toward other currencies which having better prospects such as US Dollar, as BoJ continue to remain its loosing monetary policy would drag down the risk-off return of investors in Japan.
EUR/USD
The pair of EUR/USD slumped last week while closing its market price at 1.0517. The Euro received bearish momentum over the bearish economic data was released. According to Eurostat, Eurozone Retail Sales MoM for April notched down from the previous reading of 0.3% to -1.3%. The Eurozone Retail Sales MoM was used as an indicator to present the consumer spending in Europe region. While the lower-than-expected data showed that the diminishing of consumer spending, it had brought negative prospect toward economic progression in Europe region. On the other hand, Euro remained its bearish trend amid the European Central Bank (ECB) had lowered down its economic growth forecast, which revised down significantly to 2.8% in 2022 and 2.1% in 2023 respectively. As the comparison, the ECB’s forecast in March meeting was 3.7% in 2022 and 2.8% in 2023 respectively. It dialed down the market optimism toward economic progression in Europe region, leading investors to look for other currencies which having better prospects such as US Dollar.
GBP/USD
The pair of GBP/USD depreciated last week while ending last week session at the price of 1.2313. The Pound received bearish momentum last week following the passive economic data. According to Markit/CIPS, the UK Construction Purchasing Managers Index (PMI) notched down from the previous reading of 58.2 to 56.4, missing the market forecast of 56.6. The lower-than expected reading indicated that the recession of construction market in UK, which brought negative prospects toward economic progression in UK. Furthermore, the pairing received further bearish momentum over the strengthening of US Dollar.
Market Review (Commodities): June 6 – 10
GOLD
Gold price appreciated last week while closing its market price at $1875.20 per troy ounces. Gold price received bullish momentum last week after the US CPI data has been unleashed. As the US inflation rallied to the 41-years highs, investors were prompted to shift their capitals toward inflation-hedged assets such as gold in order to avoid the side effects of inflation.
CrudeOIL
Crude oil price edged down while ending last week session at the price of $120.47 per barrel. Crude oil price received bullish momentum in the early week amid the backdrop of the US demand for gasoline keeps rising despite some stockpiles were being found in the recent EIA inventories data. Nonetheless, oil price retreated from its overnight gains after the fears over new COVID-19 lockdown measures in Shanghai. The new lockdown inn China’s big city would likely to restrict its economy activities, which caused the demand for crude oil to diminish.
Weekly Outlook: June 13 – 17
For the week ahead, investors would continue to focus on crucial economic data such as the Initial Jobless Claims and Fed monetary policy decision this week in order to determine further direction. Besides that, the ongoing situation with the Ukraine-Russia war will also be in the eyes of investors.
As for oil traders, they will be eyeing on US inventory 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: June 13 – 17
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 13th June 2022 | |||||
| 14:00 | GBP | GDP (YoY) | – | – | 8.7% |
| 14:00 | GBP | Manufacturing Production (MoM) (Apr) | – | 0.2% | -0.2% |
| Tuesday – 14th June 2022 | |||||
| 14:00 | GBP | Average Earnings Index +Bonus (Apr) | – | 7.6% | 7.0% |
| 14:00 | GBP | Claimant Count Change (May) | – | -42.5K
|
-56.9K |
| 17:00 | EUR | German ZEW Economic Sentiment (Jun) | – | -27.5 | -34.3 |
| 20:30 | USD | PPI (MoM) (May) | – | 0.8% | 0.5% |
| Wednesday – 15th June 2022 | |||||
| 10:00 | CNY | Industrial Production (YoY) (May) | – | -0.5% | -2.9% |
| 20:30 | USD | Core Retail Sales (MoM) (May) | – | 0.8% | 0.6% |
| 20:30 | USD | Retail Sales (MoM) (May) | – | 0.2% | 0.9% |
| 22:30 | USD | Crude Oil Inventories | – | -1.917M | 2.025M |
| Thursday – 16th June 2022 | |||||
| 02:00 | USD | FOMC Economic Projections | – | – | – |
| 02:00 | USD | FOMC Statement | – | – | – |
| 02:00 | USD | Fed Interest Rate Decision | – | – | – |
| 02:00 | USD | FOMC Press Conference | – | – | – |
| 06:45 | NZD | GDP (QoQ) (Q1) | – | 0.6% | 3.0% |
| 09:30 | AUD | Employment Change (May) | – | 25.0K | 4.0K |
| 15:30 | CHF | SNB Interest Rate Decision (Q2) | – | – | -0.75% |
| 15:30 | CHF | SNB Monetary Policy Assessment | – | – | – |
| 16:30 | CHF | SNB Press Conference | – | – | – |
| 19:00 | GBP | BoE Interest Rate Decision (Jun) | – | 1.25% | 1.00% |
| 20:30 | USD | Building Permits (May) | – | 1.787M | 1.823M |
| 20:30 | USD | Initial Jobless Claims | – | 215K | 229K |
| 20:30 | USD | Philadelphia Fed Manufacturing Index (Jun) | – | 5.3 | 2.6 |
| Friday – 17th June 2022 | |||||
| 11:00 | JPY | BoJ Monetary Policy Statement | – | – | – |
| 11:00 | JPY | BoJ Interest Rate Decision | – | – | -0.10% |
| TBC | JPY | BoJ Press Conference | – | – | – |
| 17:00 | EUR | CPI (YoY) (May) | – | 8.1% | 8.1% |
| 20:45 | USD | Fed Chair Powell Speaks | – | – | – |