14th March 2022 Weekly Analysis
GCMAsia Weekly Report: March 14 – 18
Market Review (Forex): March 7 – 11
US Dollar
The Dollar Index which traded against a basket of six major currencies received significant bullish momentum last week amid heightening tensions between Russia-Ukraine, which stoked a shift in sentiment toward safe-haven asset such as US Dollar. Meanwhile, the US Dollar extend its gains amid US 10-year Treasury yield edged up amid surging commodities price stoked concerns about inflation and slowing economic growth. The Dollar Index has ended last week session at the price of 99.05.
According to ALJAZEERA, the foreign ministers of Russia and Ukraine met for face-to-face talks in Turkey on Thursday in the first high-level contact meeting between the two sides. Though, Ukraine’s foreign minister claimed the 24-hours discussion of ceasefire deal with Russia counterpart did not make any progress as Moscow’s representative defended its invasion stance and said it was going as planned. Ukraine’s Dmytro Kuleba said he secured no promise from Russia to halt firing so aid could reach civilians, including the main humanitarian priority. Ukraine accused Russia forces on Saturday of killing seven civilians in an attack on women and children while France accused Russian President Vladimir Putin had shown he was not ready to make peace.
On the other hand, the commodities price increased to their highest level since 2008 on growing supply shock following the implementation of sanction upon Russia. The spiking commodities price would likely to spark inflation risk in future, increasing the probability for the Federal Reserve to rate hike while sending the US 10-year Treasury yield edged higher following it dropping to its lowest level in two months. The US Core Consumer Price Index (CPI) notched up from the previous reading of 6.0% to 6.4%, exceeding the market forecast at 5.9% while hitting the 40-years high. The US Federal Reserve is scheduled to release its next policy statement on 16th March 2022. As for now, investors would continue to scrutinize the latest updates from Federal Reserve as well as geopolitical tensions between Russia-Ukraine to gauge the likelihood movement for the US Dollar.
USD/JPY
The pair of USD/JPY received bullish on last week amid appreciation of US Dollar while ending last Friday session at the price of 117.25. The Japanese Yen extend its losses over the backdrop of bearish economic data last week, which dialing down the market optimism toward the economic progression in Japan region. According to Cabinet Office, Japan GDP for last quarter declined from the previous reading at 5.4% to 4.6%, worse than the market forecast at 5.6%.
EUR/USD
The pair of EUR/USD slumped throughout the week while ending last week session at the price of 1.0912. The Euro received bearish momentum last week amid market participants remained worries toward the economic progress in European region. the Europe countries imported mostly 40% of its natural gas consumption and more than quarter demand for oil from Russia. The supply disruption concerns due to the implementation of sanctions from European region would upsurge the cost for raw materials for European companies, which leading to a higher inflation risk in future while spurring negative prospect toward the Europe countries. Nonetheless, the losses experienced by the Euro was limited by the hawkish sentiment from European central bank. According to the monetary policy statement, the European Central Bank on Thursday announced that they will reduce their asset purchases program faster than planned as the rising inflation risk continue to hover in the market. The ECB also reiterated that they would end its bond-buying program by third quarter.
GBP/USD
The pair of GBP/USD depreciated last week while closing its market price at 1.3035. Due to lack of market catalyst from the market in United Kingdom last week, the overall movement for the pair of GBP/USD was mainly due to the appreciation of the US Dollar. Besides, the dipping stock market momentum as well as diminishing risk appetite in the global financial market continue to trigger a selloff for the riskier currencies such as Pound Sterling. As for now, investors would continue to focus on Russia-Ukraine development as well as further crucial economic data to gauge the likelihood movement for Pound Sterling.
Market Review (Commodities): March 7 – 11
GOLD
Gold price slumped significantly last week with the price of $1987.85 per troy ounce amid hawkish expectation from global central bank continue to drag down the appeal for the inflation-hedging asset gold. Last week, market participants speculated that the global central bank would likely to implement contractionary monetary policy to combat the high inflation risk in future. The US 10-year Treasury yield notes was up 3.1 basis points to 1.753% after following to its lowest since 5th January amid the hawkish expectation from Fed next week. The Federal Reserve is scheduled to release its next policy statement on 16th March 2022. As for now, investors would continue to scrutinize the latest updates from Federal Reserve as well as geopolitical tensions between Russia-Ukraine to gauge the likelihood movement for the gold.
CrudeOIL
The price of crude oil dipped last week while closing last Friday session with the price of $109.15 per barrel. The overall trend for the crude oil price remained bearish despite negative war prospect between Russia-Ukraine amid investors continue to digest the oil production increment from OPEC. Earlier, UAE’s ambassador to Washington said the No. 3 OPEC producer would encourage the Organization of the Petroleum Exporting Countries to consider higher output. Iraq’s Oil Minister Ihsan Abdul-Jabbar Ismail said he was also agreeable to raising production if that was the will of OPEC+. Besides, the United States made moves to ease sanctions on Venezuelan oil and efforts to seal a nuclear deal with Tehran, which could lead to increased oil supply.
Weekly Outlook: March 14 – 18
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 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 14 – 18
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 14th March 2022 | |||||
| N/A | |||||
| Tuesday – 15th March 2022 | |||||
| 8:30 | AUD | RBA Meeting Minutes | – | – | – |
| 10:00 | CNY | Industrial Production (YoY) (Feb) | – | 3.90% | 4.30% |
| 15:00 | GBP | Average Earnings Index +Bonus (Jan) | – | 4.60% | 4.30% |
| 15:00 | GBP | Claimant Count Change (Feb) | – | -28.0K | -31.9K |
| 18:00 | EUR | German ZEW Economic Sentiment (Mar) | – | 10 | 54.3 |
| 21:30 | USD | PPI (MoM) (Feb) | – | 0.90% | 1.00% |
| Wednesday – 16th March 2022 | |||||
| 21:30 | USD | Core Retail Sales (MoM) (Feb) | – | 1.00% | 3.30% |
| 21:30 | USD | Retail Sales (MoM) (Feb) | – | 0.40% | 3.80% |
| 21:30 | CAD | Core CPI (MoM) (Feb) | – | – | 0.80% |
| 23:30 | USD | Crude Oil Inventories | – | – | -1.863M |
| Thursday – 17th March 2022 | |||||
| 2:00 | USD | FOMC Economic Projections | – | – | – |
| 2:00 | USD | FOMC Statement | – | – | – |
| 2:00 | USD | Fed Interest Rate Decision | – | 0.50% | 0.25% |
| 2:30 | USD | FOMC Press Conference | – | – | – |
| 5:45 | NZD | GDP (QoQ) (Q4) | – | 3.20% | -3.70% |
| 8:30 | AUD | Employment Change (Feb) | – | 40.0K | 12.9K |
| 17:30 | EUR | ECB President Lagarde Speaks | – | – | – |
| 18:00 | EUR | CPI (YoY) (Feb) | – | 5.80% | 5.80% |
| 20:00 | GBP | BoE Interest Rate Decision (Mar) | – | 0.75% | 0.50% |
| 21:30 | USD | Building Permits (Feb) | – | 1.850M | 1.895M |
| 21:30 | USD | Initial Jobless Claims | – | 220K | 227K |
| 21:30 | USD | Philadelphia Fed Manufacturing Index (Mar) | – | 15 | 16 |
| Friday – 18th March 2022 | |||||
| 11:00 | JPY | BoJ Monetary Policy Statement | – | – | – |
| 14:30 | JPY | BoJ Press Conference | – | – | – |
| 18:30 | RUB | Interest Rate Decision (Mar) | – | 9.50% | 20.00% |
| 21:30 | CAD | Core Retail Sales (MoM) (Jan) | – | -2.00% | -2.50% |
| 23:00 | USD | Existing Home Sales (Feb) | – | 6.16M | 6.50M |