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28
Sep

U.S. Pending Home Sales, Investor Confidence, EIA Data

calendar 28/09/2022 - 06:28 UTC

The dollar strength continued to dominate the FX markets among both major and emerging market currencies. The USD/CNH pair continued to go up in a parabolic fashion, exceeding the highs from both 2019 and 2020 with ease as it is now traded well above the 7.20-threshold. A steady downtrend can also be seen in the GBP/USD rate, though at this time it is still well above the significant low it reached on Monday night.

While crypto markets seemed to be rather calm during the significant market volatility at the very beginning of the week, increased volatility was recorded on Tuesday when Bitcoin briefly moved above the $20k level pushing the total crypto market cap again above one trillion dollars. Though this move strongly reversed in the evening hours with the crypto worth at the end of the day even less than before. A relatively similar move could be observed in some other crypto markets like Ethereum and Binance Coin.

Major stock markets around the world continued trading mostly lower, while in China the picture was somewhat mixed with the China A50 and China SZSE managing to make a comeback on Tuesday, though both again turned red by Wednesday morning.

On Wednesday again multiple housing market indicators can be expected including the pending home sales index and the Mortgage Bankers' Association (MBA) weekly market indices. Also on Wednesday the weekly EIA petroleum market data and the State Street investor confidence index are set to be published.

EUR/USD

The strong dollar continues to affect global FX markets with the EUR/USD pair falling by Wednesday night even below the levels seen on Monday night during the sell-off in most currencies other than the dollar.

Durable goods new orders in the U.S. for August released on Tuesday was slightly better than anticipated, showing off only a drop of 0.2% on a monthly basis and the consumer confidence as published by the Conference Board surprisingly edged significantly higher from 103.2 to 108.0.

Housing market data showed interesting developments as while new home sales in August significantly increased from 511 thousand in the previous month to 685 thousand, the two house price indices published on Tuesday for the month of July indicated a drop in prices with the FHFA HPI declining by 0.6% on a monthly basis.

EUR/USD

Germany 40

European markets including the Germany 40 are continuing to sell-off lower with the index on track for a downside move on Wednesday for the fourth trading day in a row. While the index lost since the beginning of the month around 6.5% of its value in its nominal currency, if taken in U.S. dollar which strongly appreciated against most other currencies over the past weeks the downside amounts to almost 11%. It should be noted that last year the United States were still the biggest export trading partner of Germany. At the same time the US 500 index fell by around 7.5%.

Germany 40

WTI Oil

Oil prices had their strongest upside move in two weeks on Tuesday as the market for now consolidated its position and no new low after the market drop on Monday emerged.

Market prices moved moderately higher following the publication of the weekly statistical bulletin by the American Petroleum Institute (API) in the evening hours. Gasoline inventories declined by more than a million barrels, while at the same time distillate stockpiles were up by 1.4 million barrels and crude oil inventories saw a build of 4.15 million barrels.

On Wednesday the Energy Information Administration (EIA) is releasing a similar type of dataset in its weekly petroleum status report.

WTI Oil

US 500

Stock market indices such as the US 500 continued to turn lower and even the US Tech 100 index which traded almost unchanged during the first two days of the week came under pressure by Wednesday. While other regions' indices are also under pressure, for the U.S. market the strength of its currency could become an issue as overseas earnings could be impacted by this development.

Some of the best-performing stocks in the market were those of cruise line companies like Norwegian Cruise Line (+4.06%) and Royal Caribbean (+3.72%) with both ending the day among the top five components of the S&P 500 index.

While the overall market sentiment was negative, some sectors still managed to end the day with an upside. Energy sector stocks (US Energy ETF +0.95%) managed to consolidate their position after facing significant downside pressure over the past few days. Chip sector stocks (US Semiconductors ETF +0.68%) was also moving higher. AMD (+1.02%) closed higher as the company released its new Ryzen processor line-up. It remains to be seen how the market reacts to Intel unveiling later yesterday its 13th generation of Core processors and multiple new GPUs. Among the NASDAQ Composite Index components Micron (+3.29%) was the best-performing stock. It should be noted that the new generation of AMD consumer-grade CPU will rely solely on DDR5 memory, such as made by Micron but also Samsung and SK Hynix, while new Intel chips will still offer backwards compatibility to DDR4 modules.

This week on Thursday Nike and Micron are set to publish their respective quarterly results.

US 500

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