English (India)
14
Oct

Canada Manufacturing Sales, US Jobless Claims, EIA Oil Data

calendar 14/10/2021 - 07:53 UTC

With the dollar trading clearly weaker on Wednesday against other majors as seen in the performance of the USDX, many emerging market pairs also followed that direction like the USD/ZAR and USD/MXN. The USD/RUB pair meanwhile traded moderately higher, moving again above 72.0, while despite the weakness of the dollar the USD/TRY pair moved up by more than a per cent towards yet another all-time high.

Cryptos performed strongly with Bitcoin recovering the losses from the previous days and again touching on the $58k mark, while an even faster upwards move was seen in some altcoins, especially in Polkadot which was up on a daily basis by more than 21 %. At this time the total crypto market cap is also moving higher, reaching levels above $2.48 trillion by Thursday morning.

Most major equity indices around the world traded clearly higher with the China A50 index moving up by two per cent, reaching its highest level since July, while in the United States major indices like the US Tech 100 started to recover from their losses as well. The sentiment was however not shared by multiple indices in Southern European countries like the Greece 20, Italy 40 and the Spain 35, which all closed lower.

On Thursday the weekly jobless claims numbers will be published in the United States. From Canada data on manufacturing sales can be expected.

EUR/USD

While the EUR/USD pair was already moving moderately higher during the first half of the day on Wednesday, the release of the monthly CPI figures in the United States could have been a factor pushing the rate strongly higher with the EUR/USD pair gaining more than half a per cent that day.

Inflation concerns are coming more and more into the focus of analysts and policy makers. The CPI rose in September in the United States to 5.4% after it seemed that the rate of inflation would decline last month. With the IMF recently warning that policy makers might need to be prepared to tighten monetary policy settings according to Reuters traders see chances of a 50% rate hike by July next year. A Bloomberg article meanwhile assessed the minutes of the last meeting released on Wednesday that there is consensus to reduce the asset purchase programs by November or December as concerns above inflation are starting to be taken seriously.

EUR/USD

Gold

Gold but also other precious metal traded significantly higher on Wednesday with the release of the September consumer price index (CPI) said to have been one key factor favouring the advance in prices. While gold prices were up by close to two per cent, silver ended the day higher by 2.39% and palladium gained by 3.38%.

Prices of gold could be sensitive to monetary decisions by central banks in the near future as the US Federal Reserve is considering to reduce the asset purchase program over the next months and the first central banks are starting to raise rates, which might be seen in individual cases as surprise decisions like the recent action by the central bank in Poland. The decision on Wednesday by the Monetary Authority of Singapore to allow its currency to appreciate more than before was also seen as a surprise decision according to a report by CNBC.

Gold

WTI Oil

Oil prices continued moving upwards at a moderate pace, so far not reaching the recent high seen on Monday but still on track to close the week once again in the green.

Even the significantly higher build on of crude oil stockpiles according to the weekly statistical bulletin published by the American Petroleum Institute (API) in the evening hours as usual barely left a mark on the chart. While many expected only a very small build, crude oil stockpiles reportedly went up by 5.2 million barrels over the past reporting week. This is also the biggest weekly build since March. On Thursday then the Energy Information Administration (EIA) publishes its weekly data on stockpile changes in crude oil, gasoline and distillates.

In the Monthly Oil market report OPEC maintained its expectations of demand growth in 2022 amounting to 4.2 million barrels per day, while demand growth this year was revised to a slightly lower number than in the previous report.

Natural gas prices meanwhile recovered practically all the losses from Monday after gaining roughly four per cent over the course of the trading session on Wednesday.

WTI Oil

US 500

Stock market indices in the US like the US 500 managed to close higher on Wednesday and extended their gains by Thursday morning. Tech indices like the US Tech 100 and the FANG+ index were trading even stronger, moving up by well over one per cent. In this positive market sentiment, the Volatility Index VIX continued sliding lower.

Plug Power (+12.55%) was one of the best-performing stocks on Wednesday, trading up for the seventh trading day in a row and thus rising over the past ten days by more than 33 %. A positive stock review by an analyst from Morgan Stanley could have further boosted the share price of the hydrogen and fuel cell company. Another company involved in alternative fuels Lithium American (+5.78%) also continued rising higher at a rapid pace.

Some of the worst performing stocks were airlines including American Airlines (-3.35%), Delta Air Lines (-5.77%) and United Airlines (-3.52%). While Delta was able to post for the first time since the pandemic a quarterly profit, the company warned that the rising fuel prices could affect its recovery.

JP Morgan Chase (-2.61%) closed noticeably lower on Wednesday despite delivering good results in its quarterly earnings, managing to earn $3.74 per share in the quarter.

Citigroup and Wells Fargo are also due to publish their quarterly results on Thursday, followed by Prologis on Friday.

US 500

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.