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The U.S. dollar remained for now fairly unchanged with the USD/JPY rate coming down a bit after reaching a new 24-years high earlier this month.
The Turkish lira continued to weaken steadily against the greenback with the USD/TRY rate hitting once again a new year-to-date high on Monday. At its peak the rate was less than 0.5% below the previous all-time high from December last year. On Thursday the Turkish central bank is set to announce its interest rate decision.
Major cryptos like Bitcoin and Ethereum recovered from the intraday losses and ended the day on Monday almost unchanged with Bitcoin again above $19k and Ethereum rising above $1,350. Still the total crypto market cap is estimated somewhat below the on trillion dollar mark.
Stock market indices around the world were overall rather bullish with an upside seen in markets like the US Tech 100, Germany 40 and Japan 225 (Yen). Even the China A50 managed to recover and closed in the green after briefly trading at the lowst level since May.
On Tuesday Canadian CPI data, U.S. statistics on building permits and housing starts as well as the Redbook store sales statistics are expected.
While during the morning hours on Monday the dollar appreciated, with the EUR/USD pair falling below parity level, a reversal pushed the rate again above the 1.0-threshold and by the end of the day the uptrend from the last week seemed to be still intact.
The NAHB Housing Market Index in the United States unexpectedly deteriorated in September from 49 in the previous release towards an index level of 46.
Volatility in the EUR/USD and even more in the Germany 40 index increased following the release of the German producer price index (PPI) data for August. While it was expected that the rate of inflation would be around the already significantly elevated level seen in the previous month at 37.2% y/y, the real numbers blew past it by a wide margin with the PPI at +45.8% in August.
A bit later on current account data for the eurozone will be published.
Gold prices remained almost unchanged at the beginning of the week just as other key markets like the dollar and also rates like the 10-year U.S. T-Note yield remained fairly steady. Though the latter was still at an elevated level close to a yield of 3.5% ahead of the FOMC decision. It is widely expected that the FOMC would announce another significant rate hike, with key rates likely going up by around 75 basis points.
Silver prices for now have stabilised following the rally from last week and while gold is currently on course to end up for the sixth month in a row lower, since the start of September silver prices improved by more than eight per cent. Some analysts pointed out that silver holdings in LBMA storage has been continuously declining over the past months with official data showing that holdings fell in June below a million troy ounces and stockpiles in August this year down by 22% compared to the same month a year ago.
Oil prices were heading steadily lower during the first half of the day on Monday, initially declining by more than four per cent only to recover all these losses in the early afternoon just as equity markets also started to rebound during the start of the U.S. trading session.
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.
Major stock market indices like the US 500 and US Tech 100 traded with a noticable upside around the start of the U.S. session. Though even with these gains indices are still underwater after the steep losses of last week.
Despite oil prices making a recovery in the afternoon, energy sector stocks (US Energy ETF -3.18%) once again significantly underperformed. Though by far the worst-performing component of both the S&P 500 and NASDAQ Composite Index on Monday was the company known for its mRNA vaccines Moderna (-7.07%). Moderna and also other companies involved in the development and manufacturing of COVID vaccines like BioNTech (-8.66%) and Novovax (-6.40%) just as U.S. President Biden mentioned that the pandemic should be considered to be over. Other countries are also moving to normalise the situation with the German government expected to reduce the budget of the country's Ministry of Health from €64 billion to €22 billion.
Ford shares dropped by a bit more than three per cent during the extended session as the company warned that in Q3 supply chain costs increased by a billion dollars, though the company left the earnings guidance for the following quarter unchanged in the range of $11.5 bn. to $12.5 bn.
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.
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