21 November 2022 Weekly Analysis
GCMAsia Weekly Report: November 21 – 25
Market Review (Forex): November 14 – 18
US Dollar
The dollar index which traded against a basket of six major currencies hovered near the recent low level as the market participants are waiting for more economic data as well as comment from the Federal Reserve Chairman to gauge the further direction of Greenback. The Dollar Index has closed its market price at 106.80.
Earlier of the week, the dollar index extended its losses as the Producer Price Index (PPI) also showed a lower-than-expected reading, where it raised the likelihood of slower rate hike pace in the upcoming FOMC meeting. However, the losses were limited by a series of upbeat economic data, which including the Initial Jobless Claims and Existing Home Sales for the month of October. Both of the positive data diminished the losses of the dollar index. Nonetheless, as the inflation figures came down significantly for the month of October, hence, the story of a slower pace of rate hike is likely to pressure on the dollar index in long term.
USD/JPY
The pair of USD/JPY managed to hold its ground while closing its market price at 140.45. The pairing received bullish momentum following the recovery of the dollar index. Throughout the week, the unexpected positive economic data from the US triggered bullish momentum in the dollar market, urging the pair to rebound from the recent low.
EUR/USD
The pair of EUR/USD recorded losses last week while closing its market price at 1.0351. The pairing received strong bearish momentum amid the strengthening of dollar index. Similarly, a series of upbeat economic data, which including the Initial Jobless Claims and Existing Home Sales for the month of October, uplifted the value of Greenback. Besides, the Eurozone CPI data also showed a lower-than-expected reading, whereby it diminished the pace of rate hike in EU. However, the losses of the EUR/USD were limited by the upbeat German ZEW Economic Sentiment. According to the ZEW, German economic sentiment recovered from -59.2 to -36.7, far lower than the consensus forecast at -50.0.
GBP/USD
The pair of GBP/USD surged last week while ending last week session at the price of 1.1885. The Pound received bullish momentum last week amid the background of rising inflationary risk. According to Office for National Statistics, the UK Consumer Price Index (CPI) YoY jumped to a 41-year high of 11.1% in October, exceeding the market consensus forecast of 10.7%. The soaring of food, transport and energy price keep threatening household and business, which sparkling the hopes of aggressive rate hike from Bank of England (BoE). In addition, Pound Sterling’s gains has been extended following the hawkish statement form BoE. According to Reuters, BoE Governor Andrew Bailey claimed on Wednesday that the UK labor market is still ‘tight’, as well as more rate hikes are likely to be implemented in order to bring down sky-rocketed price. With that, it attracted the eye of investors and stoke a shift in sentiment toward UK currency.
Market Review (Commodities): November 14 – 18
GOLD
Gold price plunged significantly last week while closing its market price at $1751.60 per troy ounce. The traditional safe haven asset was largely sell-off by the market participants as the dollar rebound amid a series of upbeat economic data, which including the Initial Jobless Claims and Existing Home Sales for the month of October. In long term, the trend of the yellow metal remains upward as the investor were expecting the Federal Reserve to slowdown their pace of rate hike going forward, which is likely to boost the gold price higher. However, it is crucial to wait for the comment or view from the Federal Reserve in order to gauge the future monetary policy of the Federal Reserve going forward.
CrudeOIL
Crude oil price plummeted while ending last week session at the price of $80.25 per barrel. Oil prices continue to fall amid a darkening economic outlook and a surge in COVID-19 cases in China, which could lead to further restrictions and lockdowns that threaten demand for crude in the world’s second-largest economy. China is battling coronavirus outbreaks in several major cities, including Chongqing and the capital Beijing, while taking steps to try to ease the burden of its strict “Zero-coronavirus” policy. Several Chinese refiners have asked Saudi Aramco to reduce crude oil loads in December, two sources familiar with the matter told Reuters, as coronavirus restrictions and the economic downturn dent fuel demand in the world’s biggest oil importer. The daily Covid-19 cases in China shot up and triggered market fears over the risk of renewed lockdown measures. With that, it urged the investors to stay away from the black commodity market
Weekly Outlook: November 21 – 25
For the week ahead, investors would continue to focus on crucial economic data such as the Initial Jobless Claims and FOMC Meeting Minutes 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: 21th – 25th November
| Time | Market | Event | Actual | Forecast | Previous |
| Monday – 21th November 2022 | |||||
| N/A | |||||
| Tuesday – 22th November 2022 | |||||
| 21:30 | CAD | Core Retail Sales (MoM) (Sep) | – | -0.6% | 0.7% |
| Wednesday – 23th November 2022 | |||||
| 05:30 | CrudeOIL | API Weekly Crude Oil Stock | – | – | -5.835M |
| 09:00 | NZD | RBNZ Interest Rate Decision | – | 4.25% | 3.50% |
| 09:00 | NZD | RBNZ Monetary Policy Statement | – | – | – |
| 10:00 | NZD | RBNZ Press Conference | – | – | – |
| 16:30 | EUR | German Manufacturing PMI (Nov) | – | 45.2 | 45.1 |
| 17:30 | GBP | Composite PMI | – | 47.2 | 48.2 |
| 17:30 | GBP | Manufacturing PMI | – | 45.7 | 46.2 |
| 17:30 | GBP | Services PMI | – | 48.0 | 48.8 |
| 21:00 | USD | Building Permits | – | – | 1.526M |
| 21:30 | USD | Core Durable Goods Orders (MoM) (Oct) | – | 0.1% | -0.5% |
| 21:30 | USD | Initial Jobless Claims | – | 225K | 222K |
| 23:00 | USD | New Home Sales (Oct) | – | 570K | 603K |
| 23:30 | CrudeOIL | Crude Oil Inventories | – | – | -5.400M |
| Thursday – 24th November 2022 | |||||
| 03:00 | USD | FOMC Meeting Minutes | – | – | – |
| 17:00 | EUR | German Ifo Business Climate Index (Nov) | – | 85.0 | 84.3 |
| 20:30 | EUR | ECB Publishes Account of Monetary Policy Meeting | – | – | – |
| Friday – 25th November 2022 | |||||
| 15:00 | EUR | German GDP (QoQ) (Q3) | – | 0.3% |
0.3% |
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