Dow Jones, Nasdaq 100, US Dollar, Yen, AUD/USD, RBA, USD/CAD, BoC


Global market mood worsened last week, extending a low since November. On Wall Street, Dow Jones, S&P 500 and Nasdaq futures slipped 0.89%, 1.42% and 2.25% respectively. The VIX market’s “timer” closed highest since February. In the Asia-Pacific region, the Nikkei 225, Hang Seng and ASX 200 fell 1.98%, 1.27% and 2.20% respectively. Conditions were relatively tame in Europe, with the FTSE 100 gaining 0.39% while the DAX 40 fell 0.67%.

Risk aversion has meant that forex traders have rallied into the security of the highly liquid US dollar, which has been hovering against the Australian and New Zealand dollars. The similarly behaved Japanese Yen and Swiss Franc also outperformed. Looking at commodities, rising crude oil prices have eased, extending a bear market. Gold prices managed to hold some ground, capitalizing on a further decline in longer-term Treasury yields.

Moving the critical mood into a feel seems to be a combination of the emerging Omicron Covid-19 variant and the Federal Reserve’s hawk pivot. This past week, President Jerome Powell withdrew the word “transitional” from describing inflation estimates. Politicians at the central bank have also expressed the possibility of reducing quantitative easing faster than expected. This follows persistently high inflation readings in the world’s largest economy.

Speaking of inflation, the US will release its next KPI report on December 10thth. Headline inflation is expected at a whopping 6.8% y / y in November, up from 6.2% in October. That would be the highest rate in nearly 40 years. The core reading, which excludes energy and food, is estimated at 4.9% y / y from 4.6% previously. A further surprise could increase the Fed’s wild policy bets for 2022, risking volatility in markets.

Outside the US, AUD / USD traders will be looking at the Bank of Australia’s latest interest rate decision of the year. For USD / CAD investors, the Bank of Canada is also on tap. Both central banks do not plan to adjust benchmark lending rates, so investors will be eager to assess their outlook for 2022 and how policy could be shaped. Meanwhile, Chinese stocks, which are listed on U.S. exchanges, continue to prepare for volatile deletion concerns. What else is planned?


Market Week Before: Dow Jones, Nasdaq 100, US Dollar, Yen, AUD / USD, RBA, USD / CAD, BoC

Fundamental Forecasts:

Fundamental Forecast of US Dollar: DXY Primed Before CPI Data

The U.S. dollar index closed higher for the sixth consecutive week as fundamental back winds subdued the Greenback. This week’s CPI data may push the Greenback higher.

Previous Euro Week Forecast: EUR / USD Bounce May End

EUR / USD was relatively stable last week, but it is still difficult to see a stronger recovery unless the European Central Bank reverses its position that a tightening of the eurozone monetary policy is not necessary.

Gold Makes Third Consecutive Weekly Decline As General Market Sentiment Whipsaws

Gold, like many other markets this week, witnessed a shift in sentiment as Omicron fears and questions about aggressive narrow betting eased.

GBP Forecast: Omicron Adds Uncertainty to BoE Rate

Scientific data on vaccine effectiveness has led to a rise in BoE this month.

Australian Dollar May Wobble on RBA Dear Decision, Omicron Variant and US CPI

The Australian Dollar remains vulnerable ahead of the latest RBA tariff decision of 2022. The Omicron Covid-19 variant presents a risk if severe blockages occur. Will the AUD / USD decline extend?

USD / CAD Outlook Hinges on Bank of Canada (BoC) Rate Decision

The Bank of Canada’s latest interest rate decision (BoC) for 2021 may keep USD / CAD afloat as the central bank is expected to retain the current policy.

S&P 500 Weekly Forecast: Omicron Fears May weigh on US equities; Reopening Trade at Risk

US stocks, especially the reopening basket, may come under more pressure soon as traders tailor positions in risky assets amid uncertainty of omicron variants and delicate sentiment.

USD / JPY at the Edge of Reversal as All Inner Crosses Rendered to Risk Trends

The volatility that has moved into the broader financial markets does not fully encompass the pullback in a range of “risky” assets that we have seen over the past few weeks. That erosion has hit many of the Yen crosses, but the recent volatile and rate forecast uncertainty now threatens USDJPY.

Technical Forecasts:

Gold Price Forecast – XAU / USD Testing Large Level of ‘Hidden’ Support

Gold was generally weak and at a high level; price pattern on the short term chart is viewed as dictating the next move.

Dow, Nasdaq 100, S&P 500 Forecasts for the Previous Week

Shares have stumbled as Omicron and FOMC policy have become focal points, and this may lead to a deeper pullback as equities incorporate these new risk factors.

Crude Oil Drops 6th Direct Week Amid Extreme Volatility

Crude oil managed to stabilize its dramatic bearish trend this past week, but the flow continues to carry the commodity lower. The reversal point for this commodity stands very prominently at 62.50 / 61.50.



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