14 June 2021 Weekly Analysis
GCMAsia Weekly Report: June 7 – 11
Market Review (Forex): June 7 – 11
US Dollar
The dollar index which traded against a basket of six major currency pairs surged over the backdrop of upbeat economic data from US region. Meanwhile, market participants anxiously awaited a key event of FOMC meeting this week for guidance on future monetary policy. A hawkish statement from the Federal Reserve would likely to insinuate the appeal of the US Dollar. The Dollar Index was closing its price on last Friday session at the price of 90.45.
On the economic data front, according to Bureau of Labor Statistics, US JOLTs Job Opening had notched up significantly from the previous reading of 8.288M to 9.286M, exceeding the market forecast at 8.300M. Besides, US Core Consumer Price Index (CPI) came in at 0.7%, exceeding the market forecast at 0.4%. High inflation rate would be potentially challenging the Fed to discuss about tapering its bond purchasing program while scaling back its massive asset purchases to combat the inflation risk. Many economists highlighted the important for committee to clearly manage its long-run policy goal while maintaining its inflation rate at stable rate. Nonetheless, the overall statement from the Federal Reserve remained vague while investors would continue to focus the latest updates with regards of FOMC meeting in order to gauge the likelihood movement for the US Dollar.
As for now, with the combination of uncertainty in monetary policy, traders remain cautious ahead of Fed meeting this week before entering the market.
USD/JPY
The pair of USD/JPY received bullish momentum on last week while ending last Friday session at the price of 109.75. The overall bullish momentum for the pair was mainly due to the appreciation of the US Dollar. Nonetheless, the spiking numbers of the Covid-19 and the implementation of Covid-19 restriction in Asia region had insinuated risk-off sentiment in the FX market, which prompting investors to shift their portfolio toward the safe-haven Japanese Yen while limiting the gains experienced by the pair of USD/JPY.
EUR/USD
The pair of EUR/USD surged throughout the week while ending last week session at the price of 1.2180. The Euro received bearish momentum yesterday amid rising Brexit tensions between United Kingdom and European Union had diminished the appeal of the Euro. According to BBC, The EU claimed that its patience is “wearing very thin” with the UK in talks aimed at avoiding a post-Brexit trade war. Although the UK formally left EU in 2020, the two sides are still trading threats over the Brexit deal after London unilaterally delayed the implementation of the Northern Irish clauses of the deal. Mr. Sefcovic claimed that if UK were to take further unilateral action in the coming weeks, the EU will not hesitate to act swiftly, firmly and resolutely to ensure the UK abides by its international obligations. The EU and Britain currently tried to solve the border riddle with the Northern Ireland Protocol of Brexit agreement, which keeping the province in both the UK’s custom territory and the EU’s single market. Investors would continue to scrutinize the updates with regards of the post-Brexit relationship in order to gauge the likelihood movement for the pair.
GBP/USD
The pair of GBP/USD was surged on last week while closing its market price at 1.4100. Pound Sterling slumped over the backdrop of bearish economic data last week, which dialed down the market optimism toward the economic progression in United Kingdom. According to the Office for National Statistics, U.K. Manufacturing Production for last month had notched down significantly from the previous reading of 2.1% to -0.3%, missing the market forecast at 1.5%. Besides, Pound Sterling extend its losses amid the resurgence of the Covid-19 cases in U.K. ahead of full unlocking decision on 21st June 2021 had heightened the concern of the investors. According to latest data, the UK has reported eight new deaths and a further 7,490 positive cases. Rising Covid-19 case numbers and hospitalizations are a matter of serious concerns, which prompting UK Prime Minister Boris Johnson less optimistic about reopening the country’s economy. Nonetheless, UK Prime Minister Boris Johnson is expected to set out on Monday whether a planned lifting of Covid-19 restriction can go ahead of 21st June
Market Review (Commodities): June 7 – 11
GOLD
Gold price slumped throughout last week with the price of $1865.50 per troy ounce amid the hopes upon the Federal Reserve might start to reduce its massive economic stimulus plan to maintain its stable inflation rate in future. Earlier, several officials commented on discuss with regards of tapering its bond repurchasing program once the US economy full recover from the Covid-19 pandemic. Back then, the suggestion of the reduction in bond purchases would send panic into global financial market and affect the US Dollar. As for now, investor would be suggested to maintain their focus on future inflation data as well as future monetary policy statement to receive further trading signal.
CrudeOIL
The price of crude oil extend its gains last week while closing last Friday session with the price of $70.55 per barrel amid the market participants speculated that the positive development of Covid-19 vaccination program would enhance the prospect of economic as well as the crude oil demand in future. On the other hand, the oil price edged higher following the top US diplomat claimed that even if United States were to reach a nuclear deal with Iran, there will still be hundreds of US sanction on Tehran. That could mean additional Iranian oil supply would not be re-introduced into market soon. On the data front, the crude oil price received further bullish momentum over the backdrop of bullish inventory data. According to Energy Information Administration (EIA), the U.S Crude Oil inventories came in at -5.241M, better than the market forecast at -2.036M.
Weekly Outlook: June 14 – 18
For the week ahead, investors would continue to focus on crucial economic event such as FOMC meeting 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: June 14 – 18
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 14th June 2021 | |||||
| 21:00 | GBP | BoE Gov Bailey Speaks | – | – | – |
| Tuesday – 15th June 2021 | |||||
| 09:30 | AUD | RBA Meeting Minutes | – | 4.90% | 4.00% |
| 14:00 | GBP | Average Earnings Index +Bonus (Apr) | – | – | -15.1K |
| 14:00 | GBP | Claimant Count Change (May) | – | – | – |
| 20:15 | GBP | BoE Gov Bailey Speaks | – | 0.40% | -0.80% |
| 20:30 | USD | Core Retail Sales (MoM) (May) | – | 0.60% | 0.60% |
| 20:30 | USD | PPI (MoM) (May) | – | -0.80% | 0.00% |
| 20:30 | USD | Retail Sales (MoM) (May) | – | 4.90% | 4.00% |
| Wednesday – 16th June 2021 | |||||
| 14:00 | GBP | CPI (YoY) (May) | – | 1.80% | 1.50% |
| 15:00 | CNY | Industrial Production (YoY) (May) | – | 8.90% | 9.80% |
| 20:30 | USD | Building Permits (May) | – | 1.740M | 1.733M |
| 20:30 | CAD | Core CPI (MoM) (May) | – | – | 0.50% |
| 22:30 | USD | Crude Oil Inventories | – | -2.036M | -5.241M |
| Thursday – 17th June 2021 | |||||
| 02:00 | USD | FOMC Meeting Minutes | – | – | – |
| 02:00 | USD | FOMC Statement | – | – | – |
| 02:00 | USD | Fed Interest Rate Decision | – | 0.25% | 0.25% |
| 02:30 | USD | FOMC Economic Projections | – | – | – |
| 06:45 | NZD | GDP (QoQ) (Q1) | – | 0.10% | -1.00% |
| 09:30 | AUD | Employment Change (May) | – | 30.0K | -30.6K |
| 15:30 | CHF | SNB Interest Rate Decision | – | -0.75% | -0.75% |
| 16:30 | CHF | SNB Press Conference | – | – | – |
| 17:00 | EUR | CPI (YoY) (May) | – | 2.00% | 1.60% |
| 20:30 | USD | Initial Jobless Claims | – | 360K | 376K |
| 20:30 | USD | Philadelphia Fed Manufacturing Index (Jun) | – | 31 | 31.5 |
| Friday – 18th June 2021 | |||||
| Tentatif | JPY | BoJ Monetary Policy Statement | – | – | – |
| 14:00 | GBP | Retail Sales (MoM) (May) | 1.80% | 9.20% | 1.80% |
| Tentatif | JPY | BoJ Press Conference | – | – | – |