Sunset Market Commentary – Action Forex

0
100

Markets

Asian / Chinese markets started the week at risk this morning as Chinese authorities took further regulatory steps to ban ‘unjustifiable’ (often monopolistic) practices by local tech giants. However, in a session without any important data, European securities separated quite easily from these Asian trends. Even some ‘reflective trends’ could be noticed, as oil, natural gas and (some) industrial goods (aluminum, copper) maintained a good supply. Significant European indices rose 1% + although are currently declining among the highest days. Whether these price increases support overall growth is another story. At least today, securities aren’t too annoying. The impact of this constructive sentiment on bonds / interest markets or FX has been less straightforward. Core European and US yields are even declining, albeit marginally. The inflation exchange rate of EMU 10-y (1.86%) touched the highest levels since the end of 2013, but this was still offset by a steady decline in real yields. German yields are currently changing less than 0.5 bp across the curve. Schnabel of ECB in an address in his home country reiterated the ECB’s assessment that the possibility of persistently excessive inflation remains highly unlikely. However, if inflation sustainably reaches the 2.0% target unexpectedly soon, she has pledged that the ECB will ‘act just as quickly and decisively’. The U.S. yield curve is slightly flattened with the 2-y yield slightly changed but longer maturities soften to 2 bp (30-y) even as U.S. securities also opened with decent gains. Tomorrow US inflation data remains the next milestone as global markets count until next week of the Fed’s policy meeting, which is expected to explain the Fed’s intentions to decline.

Underlying reflective trends, contrary to what often happens, initially did not prevent a further USD rebound, even as the momentum slowed as U.S. traders joined the fight. DXY is testing medium resistance in the area 92.80 / 85. USD / JPY is trying to hold north of 110. EUR / USD (1.1790) has declined below the 1.18 handle as USD resistance has strengthened with persistent post-ECB euro softness. EUR / USD 1,1758 marks the 62% decline from the end of August / early September. Euro softness also pushed EUR / GBP (0.8525) further south in the consolidation range 0.8450 / 0.8615. Cable trading slightly changed at 1.3835. Later this week, markets will receive a comprehensive update on the UK economy with labor market data (tomorrow), price data (Wednesday) and retail sales (Friday). The data could spur debate within the MPC on whether conditions are falling for the British economy to remove reserve capacity so as to enable inflation to hold around the 2.0% target in a sustainable manner. If in the case of positive data, the Bank of England is likely to continue to keep access to migrant policy rates, which we do not expect to happen before the middle of next year.

The news

La The Organization of the Petroleum Exporting Countries (OPEC) in its monthly report said that oil demand in March 2021 has proved resilient, supported by increasing mobility and travel activities. OPEC has revised down Q4 2021 world oil demand estimates, although the increased risk of COVID-19 cases primarily fueled by the Delta variant obscures prospects. As a result, oil demand recovery is partially delayed in H1 2022 with a higher revision to total forecasts from 2022 at 0.9 mb / d to 100.8 mb / d, surpassing pre-pandemic levels. Brent crude is rising north of $ 73.5 / b in overall construction market sentiment.

Shanghai International Port Group said in a statement that it has halted any container operation at the world’s largest container port as the city supports Typhoon Chantu. to acquire land. Most flights in and out are also canceled today and tomorrow. In the United States, the National Hurricane Center has warned that Tropical Storm Nicolas is forecast to intensify into a hurricane when it reaches the northwestern Gulf Coast.

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here