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6
Sep

Germany Factory Orders, ISM Services Index, Australian GDP

calendar 06/09/2022 - 07:35 UTC

The U.S. dollar noticeably retraced against other major currencies as seen in the market move of the USDX coming down from the recent high. Among emerging market pairs the USD/ZAR pair strongly came down from its recent two-years high, while the USD/MXN pair which was trading last week lower despite the strength of the dollar, was this time almost unchanged. The USD/TRY pair remains in the range seen over the past days with the uptrend still intact with the pair reaching on Monday once again a new year-to-date high.

There has been briefly some increased volatility in the AUD/USD pair around the time the Reserve Bank of Australia (RBA) announced its monetary policy decision, though very quickly the market stabilised as the central bank's decision to hike by 50 basis points was pretty much what analysts had expected them to do. The RBA expects now that inflation will peak during this year and come down to levels just above four per cent next year.

Major stock market indices in the U.S. and Europe like the US 500, France 40 and UK 100 traded on Monday moderately higher. At the same time Chinese markets like the Hong Kong 50 and China A50 headed lower as the country continues to implement its zero covid policies with regional full or partial lockdowns.

During the trading session on Tuesday German factory orders data followed by the U.S. ISM Services PMI and other indices can be expected. Later on during the Asian-Pacific session Australian Q2 GDP and Chinese trade balance statistics will be published.

EUR/USD

After the dollar opened significantly stronger following the weekend break, pushing the EUR/USD rate to a new two-decades low, a moderate retracement was seen pushing the EUR/USD pair eventually even above 0.995.

Eurozone fundamentals were not particularly positive with the composite PMI declining to 48.9 (previous 49.2) while retail sales declined year-on-year by 0.9% in July, which was worse than what many analysts had expected.

On Tuesday PMI data will be published in the U.S. as well as the ISM services PMI and ISM services new orders index.

EUR/USD

Gold

Gold prices continued to head steadily higher with the price of the precious metal jumping rapidly higher just around midnight on Tuesday before a moderate retracement set in. A similar move could be observed also in the silver markets with the price up by around four per cent compared to the two-years low seen last Thursday.

Platinum and palladium prices also rebounded with both precious metals trading by Tuesday morning up by around two per cent compared to the closing rate on Friday.

Gold

WTI Oil

Oil prices headed higher on Monday with the announcement by OPEC+ countries to cut production targets for October by 100 thousand barrels potentially moving the market, though these intraday gains mostly reversed by the late afternoon and a barrel of WTI crude oil again traded below $89 by Tuesday morning.

Market participants might be reacting to the expectations of lower growth in China as the country continues to observe its zero covid policies well over 2.5 years into the pandemic with wide-spread lockdowns. Recently a lockdown of the South-Western mega-city of Chengdu with more than 20 million people was announced and CNN reports that since late August over 70 cities with a total population of more than 300 million people have implemented full or partial lockdowns.

Due to the American Labour Day holiday on Monday, the release cycle of the weekly statistical bulletin by the American Petroleum Institute (API) will be pushed back by one day to Wednesday, while the weekly petroleum status report by the Energy Information Administration (EIA) is set for publication on Thursday.

WTI Oil

Germany 40

After being under pressure in the morning hours, major European stock market indices like the Germany 40 and Europe 50 managed to rebound from their six-weeks low and close even above the levels seen by the end of last week. Still, most DAX companies especially in the industrial sector closed with a steep downside including car-manufacturers like Volkswagen (-3.44%), Mercedes-Benz (-6.69%) and Porsche (-4.89%). The for now indefinite halt of flow of natural gas from Russia through the Nord Stream 1 pipeline further exacerbates the already difficult situation with high energy costs in Germany with the CEO of the German energy company Uniper stating in an interview with Reuters that gas rationing might become necessary in this situation even though the German government tries to avoid it.

On Tuesday morning manufacturer's orders data for July will be published. Then on Wednesday the German industrial production statistic will be released.

Germany 40

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