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19
Sep

Canadian PPI, U.S. Housing Market Index, New Zealand Consumer Sentiment

calendar 19/09/2022 - 07:43 UTC

FX markets were overall fairly calm towards the end of the week. Among the major pairs a notable development was that the USD/CAD pair reached a new high since November 2022. A significant weakness could also be observed in the Chinese yuan (offshore) as the USD/CNH rate was seen for the first time in more than two years above the 7.0-mark just as the rate started moving gradually to the upside around a month ago. The USD/TRY pair remains mostly within a fairly restricted range, though on Thursday the rate once again reached a new year-to-date high.

Major crypto markets were under pressure as cryptos like Bitcoin and Ethereum started moving lower on Sunday with further losses recorded by Monday morning as Bitcoin was unable to defend the $19k level and Ethereum plunged towards levels around $1,300. With these developments the total crypto market cap by now is estimated to have fallen towards around $950 billion as practically all major non-stablecoin cryptos are down by double-digit percentages over the past seven days with Ethereum among the weakest performers with its price down by more than 25 per cent compared to early on Monday of the previous week.

Major stock market indices like the Germany 40, US Tech 100 and Japan 225 (Yen) traded overall lower by Monday morning after mixed results on Friday. While the Hong Kong 50 index was also under pressure, the China A50 index moderately improved after reaching a new low since May.

On Monday Canadian producer price index (PPI) data and the NAHB Housing Market Index for the U.S. can be expected. Later during the Asian-Pacific trading session Japanese CPI data and consumer sentiment survey results in New Zealand.

EUR/USD

Major FX markets have been overall fairly stable over the past few trading days, with the EUR/USD pair moving cautiously to the upside and ending up by market closing time on Friday above parity level, though by Monday morning the rate again dropped below the 1.0-threshold.

Consumer price index (CPI) data coming from Italy and the eurozone on Friday was at expected levels with the Italian CPI remaining stable at +8.4% y/y growth, while for the eurozone another increase was reported for August towards +9.1% y/y compared to +8.9% y/y in the previous month.

One of the key events this week could be the rate decision by the FOMC on Wednesday with analysts expecting that another significant rate hike will be announced likely around 75 basis points.

EUR/USD

Gold

Gold prices were trading moderately higher on Friday and thus ending the series of losses after the price of gold dropped on Tuesday significant below the $1,700-threshold. At the same time while gold closed lower on a weekly basis and reached a new 2 years low over the past week, silver prices moved into the opposite direction and ended up higher for the second week in a row. Spot traded platinum prices also increased over the past week, while palladium prices remain mostly within the range seen over the past weeks.

U.S. CFTC commitment of traders (COT) weekly data published on Friday indicated that net speculative positions in gold futures declined for the fourth week in a row to the lowest level since late July.

Gold

WTI Oil

The price of WTI crude oil ended up lower on a weekly basis for the third time in a row following the steep decline seen on Thursday, while on Friday prices remained mostly stable.

The U.S. Baker Hughes Oil Rig Count published on Friday showed a significant improvement compared to the previous release as the number of operating oil rigs improved from 591 to 599. This is the most significant improvement in this metric on a weekly basis since June.

As usual, weekly data on the oil market, which also includes the changes in stockpiles of commodities like crude oil, gasoline and distillate will be first published on Tuesday evening by the American Petroleum Institute (API) in its Weekly Statistical Bulletin and then a similar set of data will be published by the Energy Information Administration (EIA) on Wednesday with its Weekly Petroleum Status Report.

WTI Oil

US 500

While the US 500 index managed to recover a bulk of its intraday losses by the late afternoon, the index still closed for the second day in a row lower and finished the week lower for the fourth time over the past five weeks.

Increased volatility was seen during the time after the University of Michigan Consumer Sentiment survey was released with results there indicating a moderate improvement over the previous month to an index level of 59.5 (previous 59.9).

Company stocks in the energy sector (US Energy ETF -2,10%) performed particularly poorly despite oil prices remaining almost unchanged after their steep drop on Thursday. Though the one major company also featured in the S&P 500 index was FedEx (-21.38%) as investors and the market in general reacted heavily to the earlier statements during the earnings release as the company revised its guidance lower and warned that what it sees might be a significant deterioration of the global economy.

A relatively limited number of quarterly results are coming in towards the end of the week when on Thursday Accenture and Costco are publishing their respective numbers.

US 500

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