14 November 2022 Weekly Analysis
GCMAsia Weekly Report: November 14 – 18
Market Review (Forex): November 7 – 11
US Dollar
The Dollar Index which traded against a basket of six major currencies received significant bearish momentum last week after crucial downbeat economic data had been unleashed, which prompting investors to shift their capitals toward other assets. The Dollar Index has closed its market price at 106.21.
Last week, the US Dollar extended its losses following the US labor market remained fragile. The US Unemployment rate rose higher than the market expectations, although the US Nonfarm Payrolls had given a upbeat reading. The weakened labor market would likely to bring negative impacts toward economic progression in the US. Besides that, the lowering of inflationary risk in the US had also dragged down the value of US Dollar. According to the US Bureau of Statistics, the Consumer Price Index (CPI) for October rose by 7.7%, less than the consensus forecast at 8.0%, mirroring that the US inflation continues to ease from the previous month’s reading of 8.2%. On the other than, the Core CPI, excluding the volatile food and energy costs, increased by 0.3% for the month, yet far lower than the consensus forecast of 0.5%. With the background of clouded economy outlook as well as easing inflation risk, it reduced the odds of aggressive rate hike from Fed in the December meeting, as well as dragged down the appeal of US Dollar.
USD/JPY
The pair of USD/JPY extended its losses last week while closing its market price at 138.75. The pairing received bearish momentum following the slump of US Dollar. Last week, a series of economic data such as Unemployment Rate and CPI had given a downbeat figure, which hinted that the aggressive rate hike from Fed might not be a necessary step. Thus, the USDJPY pairing dropped significantly as the market participants had shift their capitals away from the US currency.
EUR/USD
The pair of EUR/USD appreciated last week while closing its market price at 1.0351. The Euro received bullish momentum as the possibility of hefty rate hike from Fed in the next meeting was reduce, which prompted investors looking for other assets which having better prospects such as Euro. In addition, the EURUSD extended its gains over the hawkish statement from European Central Bank (ECB) policymakers. According to Reuters, three of the ECB policymakers claimed on Thursday that the aggressive rate hike was necessary in order to tame sky-high inflationary pressure which faced by Eurozone. The Eurozone CPI that unleashed on October has reached a high level of 10.7%, as well as it did not show a sign of diminishing. Besides, the ECB board member Isabel Schnabel had reiterated that there is no time to pause the contractionary monetary policy, which sparkling the appeal of Euro.
GBP/USD
The pair of GBP/USD surged last week while ending last week session at the price of 1.1832. The Pound received bullish momentum last week amid the bullish economic data had been unleashed. According to Office for National Statistics, the UK Gross Domestic Product (GDP) YoY came in at the reading of 2.4%, exceeding the market forecast of 2.1%. Furthermore, the UK Construction Purchasing Managers Index (PMI) in October has shown the expansion in the UK construction sector, which brought positive prospects toward UK economic outlook. On the other hand, the GBP/USD rose significantly during last week trading session over the Bank of England gilt selling plan. The BoE would start selling its bonds on 29 November. By doing this, the circulation of Pound Sterling in the market would likely to be reduced, which spurring bullish momentum on the GBP/USD.
Market Review (Commodities): November 7 – 11
GOLD
Gold price rose significantly last week while closing its market price at $1771.25 per troy ounces. Gold price received bullish momentum last week over the depreciation of US Dollar upon reducing odds of aggressive rate hike path. Besides, the overall trend of gold price remained bullish following the US midterm election. The US midterm elections officially begun last week, while 35 Senate seats and all 435 House of Representatives seats are on the ballot. Currently, the Democratic Party is the governing party in the United States. However, according to Reuters, market participants are expecting Republicans to take back the House of Representatives and possibly win the Senate as well. If Republicans party succeed in retaking the House of Representative or even win the Senate, the Republicans will overturn the Democrats’ previous policy and legislation, which may lead to unstable political issue. As the possibility of unstable political issues heightened, investors are more willing to shift their capitals through safe-haven gold. As of now, investors would continue to scrutinize the latest updates with regards of the US midterm election results to anticipate the likelihood movement of the financial markets.
CrudeOIL
Crude oil price eased while ending last week session at the price of $88.05 per barrel. Crude oil price received bearish momentum last week as Chinese Health Official vowed that it would less likely to loosening its zero-Covid policy during the exacerbating Covid pandemic, which weighed down the market demand on oil. On the other hand, the rising of crude oil inventories had led to the depreciation of this black commodity price. According to EIA, the U.S. Crude Oil Inventories rose by 3.925M barrel, exceeding the market forecast of 1.360M barrel. Nonetheless, the losses experienced by oil price was limited upon the price cap which is expected to be implemented on Russia crude oil by G7 countries next month. With that, Russia may decide to stop selling its oil to the G7 as the implementation of the policy.
Weekly Outlook: November 14 – 18
For the week ahead, investors would continue to focus on crucial economic data such as the Initial Jobless Claims and PPI 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: 14th – 18th November
| Time | Market | Event | Actual | Forecast | Previous |
|
Monday – 14th November 2022 |
|||||
| N/A | |||||
| Tuesday – 15th November 2022 | |||||
| 07:50 | JPY | GDP (QoQ) (Q3) | – | 0.3% | 0.9% |
| 08:30 | AUD | RBA Meeting Minutes | – | – | – |
| 10:00 | CNY | Industrial Production (YoY) (Oct) | – | 5.2% | 6.3% |
| 15:00 | GBP | Average Earnings Index +Bonus (Sep) | – | 6.0% | 6.0% |
| 15:00 | GBP | Claimant Count Change (Oct) | – | – | 25.5K |
| 18:00 | EUR | German ZEW Economic Sentiment (Nov) | – | -50.0 | -59.2 |
| 21:00 | USD | PPI (MoM) (Oct) | – | 0.5% | 0.4% |
| Wednesday – 16th November 2022 | |||||
| 05:30 | CrudeOIL | API Weekly Crude Oil Stock | – | – | 5.618M |
| 15:00 | GBP | CPI (YoY) (Oct) | – | 10.6% | 10.1% |
| 21:30 | USD | Core Retail Sales (MoM) (Oct) | – | 0.5% | 0.1% |
| 21:30 | USD | Retail Sales (MoM) (Oct) | – | 0.9% | 0.0% |
| 21:30 | CAD | Core CPI (MoM) (Oct) | – | – | 0.4% |
| 22:15 | GBP | BoE Gov Bailey Speaks | – | – | – |
| 22:15 | GBP | Inflation Report Hearings | – | – | – |
| 23:00 | EUR | ECB President Lagarde Speaks | – | – | – |
| 23:30 | CrudeOIL | Crude Oil Inventories | – | 1.360M | 3.925M |
| Thursday – 17th November 2022 | |||||
| 08:30 | AUD | Employment Change (Oct) | – | 15.0K | 0.9K |
| 18:00 | EUR | CPI (YoY) (Oct) | – | 10.7% | 10.7% |
| 20:30 | GBP | Autumn Forecast Statement | – | – | – |
| 21:30 | USD | Building Permits (Oct) | – | 1.515M | 1.564M |
| 21:30 | USD | Initial Jobless Claims | – | 222K | 225K |
| 21:30 | USD | Philadelphia Fed Manufacturing Index (Nov) | – | -8.0 | -8.7 |
| Friday – 18th November 2022 | |||||
| 15:00 | GBP | Retail Sales (MoM) (Oct) | – | -0.5% | -1.4% |
| 16:30 | EUR | ECB President Lagarde Speaks | – | – | – |
| 23:00 | USD | Existing Home Sales (Oct) | – | 4.39M | 4.71M |
Risk Statement:
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