26 November 2018 Weekly Analysis
GCMAsia Weekly Report: November 26 – 30
Market Review (Forex): November 19 – November 23
US Dollar
The US dollar appreciated throughout the week amid higher than expected economy data. The dollar index further its bullish momentum while closing Friday’s market with gains at 96.80.
Dollar bulls were celebrating their gains as sentiment remained positive for the dollar market as Building Permits and Existing Home Sales data came in at a higher than expected reading of 1.263M and 5.22M respectively. Although Core Durable Goods Orders were lower than expected, the reading of 0.1% was still higher than the previous -0.6%. The data which indicated blooming US economy help overcome investors’ fear that the US Central Bank (Fed) will pause its plan for gradual rate hikes. The next rate hike will be expected on December, furthering dollar’s bullish momentum as uncertainties spiraled from euro and pound market.
Later this week, dollar is expected to face large fluctuations as US President Donald Trump will be having a meeting prior to G20 summit with China’s President Xi Jinping which is scheduled on this Friday.
USD/JPY
USDJPY rebound from its lower level while closing Friday’s market higher at 112.95. The safe-haven Yen was being sold as investors risk appetites improved, demanding for riskier and more profitable assets. Although market remains risky, investors still favor the dollar following expectations of rate hike on December.
EUR/USD
EURUSD was depreciating throughout last week, closing Friday’s market session lower at 1.1335. Overall fall for the euro was due to a large sell-off as investors preference favor towards pound and dollar market. Current economy outlook for the euro maintained cloudy as investors worry that poor data will affect European Central Bank (ECB)’s decision to tighten its policy as well as removing its bond buying (QE) program.
GBP/USD
GBPUSD was traded higher earlier last week before falling lower from where it started while closing Friday’s session at 1.2805. The pair was largely demanded when part of the Brexit draft was accidentally leaked on Twitter, indicating a softer Brexit terms which boosted investors confident. Current outlook for the Brexit negotiations remains subtle after EU’s approval on the Brexit draft, while investors are still waiting for UK Parliament decision which will bring a large impact for the pound.
Market Review (Commodities): November 19 – November 23
GOLD
Gold price was traded sideways throughout last week while closing Friday’s trading session slightly higher at $1222.80 per troy ounce as the demand for safe haven asset increases in the midst of a risky market. The yellow metal was traded higher earlier last week when Brexit uncertainties boosted the gold price, while falling later that week when investors risk appetite increases.
Overall, demand for safe-haven assets remained as a last resort while investors currently are keeping an eye on potential riskier markets such as the euro and pound.
Crude Oil
The price of crude oil fell to a new low since 8th October 2017 while closing last Friday’s session at $50.40 per barrel.
Sentiment towards the crude oil market remained cloudy throughout last week as reports from EIA Crude Oil Inventories still indicates a high-level crude inventory on a global scale. Although OPEC’s plan to cut crude supply by 1.4 million bpd in December did little help to bolster the fall of oil price, investors still worry that the cut in supply will be insufficient to offset the increasing inventory level as US President Donald Trump continues to demand for more supply and lower price.
Overall, the crude oil market further its bearish momentum for the past few weeks while crude oil bulls hope for a change in sentiment after OPEC’s meeting which is scheduled on 6th December.
Weekly Outlook: November 26 – 30
For the week ahead, investors will focus on various data such as US GDP which is a major indicator for a country’s economy condition, and also FOMC Meeting Minutes where a hawkish or dovish tone will bring large impact towards the dollar.
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: November 26 – 30
| Monday, November 26 |
Data EUR – German Ifo Business Climate Index
Events EUR – ECB President Draghi Speaks
|
| Tuesday, November 27 |
Data NZD – Trade Balance (MoM) (Oct) USD – CB Consumer Confidence (Nov)
Events GBP – BoE Gov Carney Speaks
|
| Wednesday, November 28 |
Data USD – GDP (QoQ) (Q3) USD – New Home Sales (Oct) CrudeOIL – API Weekly Crude Oil Stock CrudeOIL – Crude Oil Inventories
Events NZD – RBNZ Gov Orr Speaks
|
| Thursday, November 29 |
Data EUR – German Unemployment Change (Nov) USD – Pending Home Sales (MoM) (Oct)
Events USD – Fed Chair Powell Speaks EUR – ECB President Draghi Speaks
|
|
Friday, November 30
|
Data CNY – Manufacturing PMI (Nov) EUR – CPI (YoY) (Nov) CAD – GDP (MoM) (Sep)
Events USD – FOMC Meeting Minutes
|