83% of retail investor accounts lose money when trading CFDs with this provider.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

13 December 2021                             Weekly Analysis

 

GCMAsia Weekly Report: December 13 – 17

Market Review (Forex): December 6 – 11

US Dollar

The dollar index was mostly traded lower against the basket of six major currency pairs last week following recent positive development of Omicron variant which have shifter market sentiment towards riskier asset. However, the losses experienced by the greenback were limited due to ongoing expectation of Fed to tighten monetary policy earlier than expectation which now reinforced by upbeat inflation data from the U.S. The dollar index has ended last week session at price of 95.98.

 

Following recent developments regarding Omicron, public health officials continue to monitor the spread of the Omicron variant in the U.S. However, preliminary data from South Africa suggest that while the Omicron possess a more transmissive strain, it doesn’t pose any dangerous or severe symptom compared to other variant such as Delta. The concerns were further eased by comments from White House Chief Medical Advisor, Dr Anthony Fauci where he recently stated that more data was needed to understand fully on the Omicron risk profile, but early figures suggest that it may not be as bad as initially feared. He also indicated that possibility of travel bans to be lifted. The positive development in Omicron have manage to provide relief for the market and increasing the risk appetite among investors towards riskier assets, thus causing a shift in portfolio from safe-haven such as dollar to alternate market. However, the sell-off was short-lived and the dollar remain supported in overall due to the release of better-than-expected CPI data which further the cement the view of Fed to tighten their monetary policy and rate hike. On data front, the U.S CPI came in higher expected with the reading of 0.8% against 0.7% expectation. On top of that, other data such as Initial Jobless Claims and Michigan Consumer Sentiment which also came in higher than expectation help strengthen the support further for the greenback.

 

Nonetheless, investors would need to continue to scrutinize the latest updates with regards of the crucial economic data as well as future Fed’s monetary policy decision to gauge the likelihood movement for the US Dollar.

USD/JPY

The pair of USD/JPY was traded higher in overall during last week and retreated slightly before ending last Friday session with the price of 113.36. The sell-off in Japanese Yen was mostly contributed by the receding fears of Omicron variant which weigh on safe-haven markets. However, recent positive comments from Japan PM help limited the losses in the Japanese Yen. According to reports, Japanese Prime Minister Fumio Kishida stated that the Japanese Government must be mindful of downside risks to the economy from chip shortages and supply constraints and added that the government had no intention of tweaking Japan’s sales tax rate from the current 10%.

 

EUR/USD

The pair of EUR/USD was largely traded flat last week but remain pressured in overall while ending last week session at the price of 1.3135. The overall bearish momentum for the pair of EUR/USD last week was largely due to the strength in U.S dollar which supported by Fed rate hike expectation. On top of that, concerns over ECB to extend its loose monetary policy also further weigh on the pair. According to Bloomberg, the ECB policymakers are leaning towards a temporary and limited Asset Purchases Program (APP) boost. This further diminished investors’ hope of ECB to tighten its monetary policy and increase rate in near term.

 

GBP/USD

The pair of GBP/USD was traded higher before ending last week trading session at the price of 1.3265. The bullish momentum in the pair was mostly due to the weakness in the greenback. However, a combination of factors such as weak data from the U.K and diminishing hope of rate hike from BoE are limited the potential upside for the pound sterling. Recently, U.K have announced a fresh Covid-19 restrictions in the U.K after the country recorded surging Omicron variant cases. The move has dented market expectation for an imminent rate hike by the Bank of England in December. On data front, U.K GDP have slumped 0.1%, weaker than market expectation while U.K Manufacturing Production also fell to 0.0% against market expectation of 0.1%.

 

Market Review (Commodities): December 6 – 11

GOLD

Gold price was traded in a tight range last week but still closing the market session with a loss at the price of 1782.61. The sentiment for the safe-haven metals was weak as rising optimism towards Omicron and expectation of rate hike from Fed which have dented the appeal for safe-haven markets. The markets also slowly shifting towards riskier markets after early data suggest the Omicron variant is less dangerous as the market expected. On the other hand, fears of a faster-than-expected rate hike have amplified after U.S CPI came in higher than expectation and previous reading of November, which is already at 40-years high. The data further strengthen market expectation that the Fed will likely to increase interest rate in order to combat the surging inflation.

 

CrudeOIL

The price of crude oil has surged significantly last week while closing last Friday session with the price of $71.77. The oil market manages to post their weekly gains after six weeks of losses due to receding fears of Omicron and rising prospect for crude demand.  Global health experts, including top U.S. virologist and White House adviser Dr. Anthony Fauci, say the effects of Omicron appeared to be less severe than initially thought.​​ Pfizer and its partner BioNTech also have also said three doses of their vaccine could neutralize the variant. On data front, EIA reported a decline of 0.240 million barrels in its crude inventory, although it was slightly lesser than market expectation of a decrease about 1.705 million barrels.

 

Weekly Outlook: December 13 – 17

For the week ahead, investors would continue to focus on crucial economic data such as the U.S Retails Sales and Fed Interest Rate Decision in order to determine further direction. Besides that, the ongoing development 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: December 13 – 17

Masa Pasaran Acara Sebenar Ramalan Terdahulu
Monday – 13hb December 2021
7:50   JPY Tankan Large Manufacturers Index (Q4) 19 18
7:50   JPY Tankan Large Non-Manufacturers Index (Q4) 6 2
Tuesday – 14hb December 2021
15:00   GBP Average Earnings Index +Bonus (Oct) 4.50% 5.80%
15:00   GBP Claimant Count Change (Nov) -14.9K
21:30   USD PPI (MoM) (Nov) 0.60% 0.60%
Wednesday – 15hb December 2021
10:00   CNY Industrial Production (YoY) (Nov) 3.80% 3.50%
15:00   GBP CPI (YoY) (Nov) 4.70% 4.20%
21:30   USD Core Retail Sales (MoM) (Nov) 1.00% 1.70%
21:30   USD Retail Sales (MoM) (Nov) 0.80% 1.70%
21:30   CAD Core CPI (MoM) (Nov) 0.60%
23:30   USD Crude Oil Inventories -0.240M
Thursday –16hb December 2021
3:00   USD FOMC Economic Projections
3:00   USD FOMC Statement
3:00   USD Fed Interest Rate Decision 0.25%
3:30   USD FOMC Press Conference
5:45   NZD GDP (QoQ) (Q3) -4.30% 2.80%
8:30   AUD Employment Change (Nov) 200.0K -46.3K
16:30   CHF SNB Interest Rate Decision (Q4) -0.75% -0.75%
16:30   CHF SNB Monetary Policy Assessment
16:30   EUR German Manufacturing PMI (Dec) 57 57.4
17:30   GBP Composite PMI 57.6
17:30   GBP Manufacturing PMI 58.1
17:30   GBP Services PMI 58.5
17:30   CHF SNB Press Conference
20:00   GBP BoE Interest Rate Decision (Dec) 0.10% 0.10%
20:00   GBP BoE MPC Meeting Minutes
20:45   EUR Deposit Facility Rate (Dec) -0.50% -0.50%
20:45   EUR ECB Marginal Lending Facility 0.25%
20:45   EUR ECB Interest Rate Decision (Dec)
21:30   USD Building Permits (Nov) 1.660M 1.653M
21:30   USD Initial Jobless Claims 195K 184K
21:30   USD Philadelphia Fed Manufacturing Index (Dec) 30 39
21:30   EUR ECB Press Conference
Friday – 17hb December 2021
10:30   JPY BoJ Monetary Policy Statement
10:30   JPY BoJ Press Conference
15:00   GBP Retail Sales (MoM) (Nov) 0.50% 0.80%
17:00   EUR German Ifo Business Climate Index (Dec) 95.4 96.5
18:00   EUR CPI (YoY) (Nov) 4.90% 4.90%