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9
Sep

ECB President's Speech, Canada Unemployment Rate, U.S. Wholesale Trade

calendar 09/09/2022 - 07:40 UTC

The U.S. dollar strongly retraced lower by Friday against both other major currencies as seen in the move of the USDX and also in many EM pairs like the USD/ZAR, USD/MXN and USD/INR. The USD/TRY pair meanwhile remains well within a relatively restricted range, as if there was a soft peg to the dollar.

Cryptos strongly rebounded over the course of the night to Friday with Bitcoin up by more than six per cent between midnight and Friday morning and strongly recovering above $20k after reaching just on Wednesday a new 2-1/2 months low. With this positive market move the total crypto market cap is now again estimated to have surpassed the on trillion dollar threshold.

While the sentiment in the U.S. stock markets was overall again bullish the trend in some major European markets like the Europe 50 and Germany 40 was somewhat different with both ending the day in the red. These European indices were heading lower during the morning hours on Thursday ahead of the ECB decision but once the ECB finally announced the anticipated 75 bp rate hike indices managed to recover at least some of the intraday losses.

On Friday the President of the ECB, Christine Lagarde will speak at the Eurogroup meeting in Prague. Also on Friday Canadian unemployment rate statistics and U.S. wholesale trade data will be published.

EUR/USD

Increased volatility could be observed in the currency markets just as the European Central Bank (ECB) announced its interest rate decision. By raising the rates by 75 basis points the central bankers fulfilled what many in the markets expected they would do, though there were also some fewer voices expecting "just" a 50 basis point hike. This steep hike is unprecedented in the comparably short history of the ECB, while further hikes are to be expected. Still, at a deposit rate of 0.75% they are lagging behind many other developed countries' central banks who started hiking earlier and by now raised rates already to a higher level in order to stem against the highest inflation in decades. The ECB also warned in its announcement that the economic growth is expected to slow down significantly in the coming months and that growth rates would only improve by 2024.

EUR/USD

Gold

Gold prices managed to recover from the losses on Thursday and were by Friday morning at the highest level so far seen during this month, just as the dollar significantly weakened. Silver is meanwhile on track to recover almost completely from the losses sustained last week as it is on course for to end the week higher after continuous losses over the past three weeks. Platinum and palladium prices also have edged higher towards the end of the week.

On Friday as usual the U.S. CFTC publishes its weekly commitment of traders (COT) statistics that include the net speculative positions on gold, silver, copper and other underlying in the futures markets.

Gold

WTI Oil

While oil prices hit intraday a new low since January, by the end of the day prices stabilised and the daily candlestick turned green for once. Prices came also under pressure around the time the Energy Information Administration (EIA) was publishing its weekly petroleum status report, though after a brief dip oil stabilised very quickly despite the report indicating a significant build in crude oil stockpiles, amounting to 8.8 million barrels over the past reporting week. According to Reuters at the sae time the U.S. continued to release 7.5 million barrels from its Strategic Petroleum Reserve.

On Friday as usual the U.S. Baker Hughes Oil Rig Count statistics will be published.

WTI Oil

US 500

Major stock market indices like the US 500 and US Tech 100 closed once again higher on Thursday. Stocks in most economic sectors were overall bullish with even energy sector stocks (US Energy +0.38%) managing to consolidate their position after steep losses earlier this week due to falling prices of oil.

After DocuSign was already one of the best-performing stocks during the regular session, the stock price went up by almost a quarter of its value during the extended session after the company presented its quarterly results. The company known for its e-signature solutions reported an increase in revenue by 22% compared to last year, though free cash flow declined significantly from $161.7 million to $105.5 million. The stock was trading significantly higher since the start of the pandemic and reached its all-time high in August 2021. Even with the strong upside after these quarterly results, the stock price is still down by 78% compared to that all time high.

Zscaler also moved significantly higher during the extended session, rising by around 17% after already improving by more than 4% on Thursday. The IT cloud security company reported 61% y/y revenue improvement in the past quarter, while the earnings per share (EPS) at $0.25 were also better than what some have expected.

Next week on Monday Oracle is publishing its results while on Thursday Adobe will release its numbers.

US 500

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