18 March 2019 Weekly Analysis
GCMAsia Weekly Report: March 18 – 22
Market Review (Forex): March 11 – 15
US Dollar
Greenback continues to tumble against its basket of major rival pairs while closing last week’s market price at 96.48 as weaker-than-expected economic data release continues to decimate dollar’s appeal.
Last week, the greenback has posted its largest weekly drop and has been dominated by selling pressure following an ongoing streak of disappointing data release throughout the week. Inflation figures failed to make a comeback following with US manufacturing output fell 0.4 percent which is already weakening for second consecutive month while factory activity also slumped with the NY index came in only 3.7 against forecasted reading of 10.0. These data have proven a declining US economy health and it would increase bets on Fed for a rate cut plan this year. Besides that, the lack of progress between US-China also currently weigh on the sentiment as a full blown trade war between two powerhouses could affect global growth.
In conclusion, dollar sentiment remains pressured by various disappointing data increasing further possibility of Fed rate cut later this year and market currently will shift their focus on this weeks Fed meeting to confirm the possible dovish stance by Fed which is already cemented by multiple weak economic data before determine the further momentum for the dollar.
USD/JPY
USD/JPY extended gains throughout the week while closing last Friday market with the price of 111.45. The pair managed to hold its ground last week after Bank of Japan (BoJ) after the Bank of Japan kept its monetary policy at a steady pace but tempered its optimism that robust exports and factory output will underpin growth which boosting its safe-haven status.
EUR/USD
Euro recorded its biggest weekly gains since late September last week while closing the Friday market with the price of 1.1323. As dollar losing its steam, Euro remains cushioned by dollar weakness as market flees away from the greenback and scattered their investments throughout other markets. Besides that, positive news regarding Brexit progress also supported the bid for the Euro as last week UK Parliament backed an amendment that ruled out a no-deal Brexit at any point, a move opposed by PM May’s government.
GBP/USD
Pound sterling have surged against the US dollar while closing last week trading session with the closing price of 1.3291 following ongoing positive developments on Brexit after U.K parliament have voted to delayed Britain’s exit from the EU and also made a decision to avert a no-deal Brexit which the vote have already removed the worst-case scenario. As the extension have raised confidence among lawmakers for an orderly Brexit, tensions were also rise between Parliament and UK Prime Minister Theresa May where a group of lawmakers are preparing to oust PM May from her seat. Investors will remain focused on the ongoing developments for Brexit whether the British PM can manage to opt for voting on her third Brexit proposal on Tuesday or British lawmakers plot to topple her from the PM seat which both could also cause absolute driving force to the market.
Market Review (Commodities): March 11 – 15
GOLD
Gold price have advanced throughout last week, closing last Friday trading session at the price of 1301.95. Gold demand continues to be bid up by investors as trade developments between US-China and a declining dollar that dragged by various economic data have caused investors to plight from risky assets to safe-haven asset. In addition, despite recent progress in Brexit remains positive, uncertainty surrounding soft Brexit continues to haunt the market, thus improving further risk-off appetite and boosting the appeal for the yellow metal. Market continue to focus on upcoming developments and Fed decisions and meeting which could trigger a huge shift in momentum.
Crude Oil
Market sentiment in crude oil remains strong as the black commodity closing last week market high with the price of $58.39 per barrel. Crude oil price has been supported by positive news throughout the week where OPEC-led supply cuts continues to pushing the price higher. Besides that, Saudi Oil Minister Khalid al-Falih stated that about continued commitment to the oil supply cut agreement between OPEC and non-OPEC members. Besides that, according to Baker Hughes, US drilling activity have also slowed with drilling rigs declined by 1 to 833, which assist further in decreasing supply output.
In conclusion, as OPEC continue its efforts of supply cut, investor’s remains in confidence for the crude oil while awaiting further catalyst that could further stimulate the crude oil sentiment.
Weekly Outlook: March 18 – 22
For the week ahead, investor’s will shifting their attention towards trade talk progress and also important economic data such as FED Interest Rate Decision and statement where a surprising outcome could change the course of the market.
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 18 – 22
| Monday, March 18 |
Data JPY – Industrial Production (MoM) (Jan)
Events N/A
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| Tuesday, March 19 |
Data GBP – Average Earnings Index +Bonus (Jan) GBP – Claimant Count Change (Feb) GBP – Unemployment Rate (Jan) EUR – German ZEW Economic Sentiment (Mar)
Events AUD – RBA Meeting Minutes
|
| Wednesday, March 20 |
Data CrudeOIL – API Weekly Crude Oil Stock GBP – CPI (YoY) (Feb) CrudeOIL- Crude Oil Inventories
Events JPY – Monetary Policy Meeting Minutes
|
| Thursday, March 21 |
Data USD – Fed Interest Rate Decision NZD – GDP (QoQ) (Q4) AUD – Employment Change (Feb) CHF – SNB Interest Rate Decision GBP – Retail Sales (MoM) (Feb) GBP – BoE Interest Rate Decision (Mar)
Events GBP – UK Parliament vote on Brexit deal USD – FOMC Economic Projections USD – FOMC Statement USD – FOMC Press Conference CHF – SNB Press Conference CHF – SNB Monetary Policy Assessment EUR – ECB Economic Bulletin EUR – EU Leaders Summit
|
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Friday, March 22
|
Data EUR – German Manufacturing PMI (Mar) CAD – Core CPI (MoM) (Feb) CAD – Core Retail Sales (MoM) (Jan) USD – Existing Home Sales (Feb) CrudeOIL – U.S. Baker Hughes Oil Rig Count (23th)
Events EUR – EU Leaders Summit
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