16 August 2021 Weekly Analysis
GCMAsia Weekly Report: August 16 – 20
Market Review (Forex): August 9 – 13
US Dollar
The dollar index which traded against a basket of six major currency pairs was slumped last week amid bearish economic data in United States. As for now, investors would continue to scrutinize the latest updates with regards of future monetary policy to gauge the likelihood movement for the index. The Dollar Index was closing its price on last Friday session at the price of 92.45.
On the negative note, U.S. Michigan Consumer Sentiment declined from the previous reading of 81.2 to 70.2, missing the market forecast at 81.2, according to University of Michigan. Such reading was the lowest level since 2011 and one of the six largest drops in the past 50 years of the survey. Besides, the U.S. Bureau of Labor Statistics reported that U.S. Core Consumer Price Index (CPI) had notched down significantly from the preliminary reading of 0.9% to 0.3%, missing the market forecast at 0.4%, rising hopes that the Federal Reserve might continue to implement its expansionary monetary policy in long-term basis in order to boost up the economic momentum. On the other hand, the U.S. Producer Price Index (PPI) came in at 1.0%, exceeding the market forecast at 0.6%. Meanwhile, the U.S. JOLTs Job Opening notched up significantly from the previous reading of 9.483M to 10.073M, which also better than the market forecast at 9.281M.
Investors would continue to scrutinize the latest updates from the Federal Reserve during the Fed’s central bank conference in Jackson Hole, Wyoming, later this month to receive further trading signal. Market participants expected that Federal Reserve Chair Jerome Powell may provide further clarity on the sequencing of Fed’s monetary policy plan in order to stabilize the economic growth
USD/JPY
The pair of USD/JPY received bearish momentum on last week while ending last Friday session at the price of 110.20. The overall bearish momentum for the pair of USD/JPY was mainly due to the decrease of risk appetite in the global financial market. The spiking numbers of the Delta variant around the world had stoked a shift in sentiment toward safe-haven currency, which spurring bullish momentum on the Japanese Yen.
EUR/USD
The pair of EUR/USD slumped throughout the week while ending last week session at the price of 1.1755. The overall trend for the EUR/USD remained bearish amid the dovish stance from the European Central Bank. According to Reuters, the European policymakers pledge to maintain a persistently accommodative monetary policy to boost up the economic momentum in the European region. Besides, Euro extend its losses over the backdrop of bearish economic data. According to ZEW, Germany ZEW Economic Sentiment declined significantly from the previous reading of 63.3 to 40.4, missing the market forecast at 56.7.
GBP/USD
The pair of GBP/USD have rose last week while closing its market price at 1.3860. The overall bullish momentum for the pair of GBP/USD last week was mainly due to the depreciation of the US Dollar. Besides, the Pound Sterling extend its gains over the backdrop of bullish economic data. According to Office for National Statistics, U.K. Gross Domestic Product (GDP) YoY had increased significantly from the previous reading of -6.1% to 22.2%, exceeding the market forecast at 22.1%, indicating the economic recovery in the United Kingdom still remained optimistic.
Market Review (Commodities): August 9 – 13
GOLD
Gold price surged last week with the price of $1780.00 per troy ounce amid bearish economic data from United States as well as spiking numbers of Delta variant around the world, which diminishing the risk appetite in the global financial market while prompting investors to shift their portfolio toward safe-haven gold. In United States, the Delta variant is driving the current surge in Covid-19 cases and hospitalization across the country. According to the Centers for Disease Control Prevention (CDC), the overall Covid-19 cases in United States rose about 18% last week compared with the previous week. Investors feared that such worsening pandemic situation would cause the government to enhance the movement control, which spurring negative prospect for the economic growth.
CrudeOIL
The price of crude oil slumped significantly last week while closing last Friday session with the price of $67.35. The crude oil price received bearish momentum last week over the backdrop of the bearish inventory data last week. According to Energy Information Administration, U.S. Crude Oil Inventories came in at -0.447M, missing the market forecast at -1.271M. Besides, the oil market extends its losses amid spiking numbers of the Delta variant around the world had continue to drag down the appeal for the oil demand. Nonetheless, investors would continue to scrutinize the latest updates with regards of Covid-19 development in order to gauge the likelihood movement for this black-commodity.
Weekly Outlook: August 16 – 20
For the week ahead, investors would continue to focus on crucial economic data such as US Initial Jobless Claims 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: August 9 – 13
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 16th August 2021 | |||||
| N/A | |||||
| Tuesday – 17th August 2021 | |||||
| 09:30 | AUD | RBA Meeting Minutes | – | – | – |
| 14:00 | GBP | Average Earnings Index +Bonus (Jun) | – | 8.70% | 7.30% |
| 14:00 | GBP | Claimant Count Change (Jul) | – | – | -114.8K |
| 20:30 | USD | Core Retail Sales (MoM) (Jul) | – | 0.20% | 1.30% |
| Wednesday – 18th August 2021 | |||||
| 01:30 | USD | Fed Chair Powell Speaks | – | – | – |
| 10:00 | NZD | RBNZ Interest Rate Decision | – | 0.50% | 0.25% |
| 10:00 | NZD | RBNZ Rate Statement | – | – | – |
| 11:00 | NZD | RBNZ Press Conference | – | – | – |
| 14:00 | GBP | CPI (YoY) (Jul) | – | 2.30% | 2.50% |
| 17:00 | EUR | CPI (YoY) (Jul) | – | 2.20% | 2.20% |
| 20:30 | USD | Building Permits (Jul) | – | 1.610M | 1.594M |
| 20:30 | CAD | Core CPI (MoM) (Jul) | – | – | 0.30% |
| 22:30 | USD | Crude Oil Inventories | – | – | -0.447M |
| Thursday – 19th August 2021 | |||||
| 02:00 | USD | FOMC Meeting Minutes | – | – | – |
| 09:30 | AUD | Employment Change (Jul) | – | -45.0K | 29.1K |
| 20:30 | USD | Initial Jobless Claims | – | 360K | 375K |
| 20:30 | USD | Philadelphia Fed Manufacturing Index (Aug) | – | 25 | 21.9 |
| Friday – 20th August 2021 | |||||
| 14:00 | GBP | Retail Sales (MoM) (Jul) | – | 0.50% | 0.50% |
| 20:30 | CAD | Core Retail Sales (MoM) (Jun) | – | 4.40% | -2.00% |