15 October 2018 Weekly Analysis
GCMAsia Weekly Report: October 15 – 19
Market Review (Forex): October 8 – October 12
US Dollar
The US dollar had undergone a sharp depreciation to a 3-weeks low amid poor CPI data and the cut of global economic growth by the IMF, but had managed to closed Friday’s market higher at 94.90 due to Brexit woes.
The CPI data last Thursday missed its expectation of 0.2% by 10 basis point, reading at 0.1%. Acting as one of the major indicators for the inflation level of the country, the data proved that the country’s inflation was not as good as predicted and commented by US President Donald Trump when he criticized the gradual rate hike by the Fed. The situation worsens for the dollar as IMF announces global growth cut from 3.9% back to 3.7% for this year and next year which anticipated to be the same for three consecutive years since last year. The news had since encouraged investors to seek for safer haven asset such as the Japanese Yen and gold thus lead to a sell-off for the dollar.
Overall, the dollar managed to recover part of its strength as Brexit woes sentiment worsen for the pound which help bolster the fall of dollar as investors exit the riskier market.
USD/JPY
USDJPY pair fell to September low last week, closing the market at 112.20 last Friday. The Japanese Yen was largely bought when IMF announces global growth cut, causing the increased in demand for its safe haven properties.
EUR/USD
EURUSD rose throughout last week while closing the market slightly lower at 1.1555 during last week Friday session. The overall growth for the euro was due to the announcement for Italy’s budget plan to be delayed. Besides that, Brexit woes increased the pair of EURGBP value as investors preference for euro strengthen against the pound.
GBP/USD
GBPUSD undergone large fluctuations throughout last week before closing last Friday session at 1.3150. The pair was gaining during early of the week when Brexit sentiment turned positive as UK and EU reported that Brexit negotiations were going well. The pair fell drastically after Brexit sentiment turns negative when the North Ireland border issue was brought up by UK cabinet.
Market Review (Commodities): October 8 – October 12
GOLD
Gold price surged throughout the week as dollar faces a major sell-off. The yellow metal fell earlier of the week before surging up to July high on Thursday and edging down to $1217.80 per troy ounce during late Friday trading session.
Overall, the gold price appreciated throughout the whole week as investors shift their investment towards the gold market as a safe-haven asset amid uncertainty towards Brexit sentiment as well as dollar.
Crude Oil
The price of crude oil was decreasing throughout last week amid poor Crude Oil Inventories data reported by EIA. The commodity price decreased to $71.40 per barrel during last Friday’s session.
The crude oil market continues to fall from its highest point amid high inventory level as reported by EIA and API which indicates increased in supply for crude oil. The sentiment worsens as Baker Hughes Oil Rig Count reported the increasing drilling activity which will cause an increase in global supply for crude oil. Investors’ confidence weakens, anticipating a lower price for crude due to higher supplies.
However, the fall in crude oil price was bolstered by China’s data on import for crude oil which hit 4-month high which indicates investors on increasing demand for crude will lead to an increase in price. This week, investors will focus on Wednesday Crude Oil Inventories data to determine the direction for the price of crude.
Weekly Outlook: October 15 – 19
For the week ahead, investors will focus on the release of various economics data such as Core Retails Sales which contribute to the measurement of inflation level of the country.
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: October 15 – 19
| Monday, October 15 |
Data USD – Core Retail Sales (MoM) (Sep) USD – Retail Sales (MoM) (Sep)
Events N/A
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| Tuesday, October 16 |
Data NZD – CPI (QoQ) (Q3) GBP – Average Earnings Index + Bonus (Aug) EUR – German ZEW Economic Sentiment (Oct) USD – JOLTs Job Openings (Aug)
Events AUD – RBA Meeting Minutes
|
| Wednesday, October 17 |
Data GBP –CPI (YoY) (Sep) EUR – CPI (YoY) (Sep) USD – Building Permits (Sep) CrudeOIL – Crude Oil Inventories
Events N/A
|
| Thursday, October 18 |
Data AUD – Employment Change (Sep) GBP – Retail Sales (MoM) (Sep) USD – Philadelphia Fed Manufacturing Index (Oct)
Events USD – FOMC Meeting Minutes EUR – EU Leaders Summit
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Friday, October 19
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Data CNY – GDP (YoY) (Q3) CNY – Industrial Production (YoY) (Sep) CAD – Core CPI (MoM) (Sep) CAD – Core Retail Sales (MoM) (Aug) USD – Existing Home Sales (Sep)
Events GBP – BoE Gov Carney Speaks
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