English (India)
23
Nov

German, EU, U.S. PMI, Richmond Manufacturing Index, Best Buy Earnings

calendar 23/11/2021 - 09:41 UTC

The USD/TRY pair continues on its parabolic path up, not just because of the strong position of the U.S. dollar, but mainly because the Turkish currency is now seen as totally lacking any credibility among investors after the recent move to lower central bank rates to 15%, despite the consumer price inflation rate being closer to 20%. The Turkish President reiterated that he would seek to prioritize job creation and investments rather than keeping the borrowing costs high. At its peak on Tuesday morning the USD/TRY pair was up by more than 24% since the beginning of the month, making it one of the worst currencies in the world in terms of stability.

Cryptos were once again under pressure with Bitcoin testing the low from Friday just below $56k, while Ethereum remained so far above the $4k level. Meanwhile Crypto.com Coin and Avalanche were once again outperforming most other major cryptos and raced towards new record levels with Avalanche now having a higher market cap than Dogecoin.

Sentiment in the stock markets across the U.S. and Europe was mostly negative at the start of the week with indices like the US 500 and US Tech 100 off their all-time high, while European markets like the Germany 40 and Europe 50 continued on the decline that started at the end of last week, despite the weakness of the euro. Asian markets like the Japan 225 (Yen) and the China A50 traded meanwhile almost unchanged.

On Tuesday manufacturing and services PMI will be released for multiple regions including the eurozone, the United Kingdom and the United States. From the U.S. also the weekly Redbook store sales statistics and the Richmond Manufacturing Index for November will be published.

EUR/USD

The strong dollar pressures the EUR/USD rate once again to a new 16-months low with the pair trading at its low by Tuesday below 1.123. The decline might have been limited by the recovery of the common European currency against other majors compared to the weak performance seen on Friday with pairs like the EUR/NZD and EUR/JPY trading clearly in the green on Monday and Tuesday morning.

On Tuesday morning services and manufacturing PMI statistics for Germany and the eurozone can be expected. The data released for France earlier showed a noticeable improvement in both manufacturing PMI at 54.6 (previous 53.6) and services PMI at 58.2 (previous 56.6).

EUR/USD

Gold

Gold continued moving lower on Monday, trading at times at just $1,802 per troy ounce in the spot market after the biggest daily drop since September with prices down by two per cent compared to the closing level on Friday.

The statements by the once again nominated Chairman of the Federal Reserve Jerome Powell and also his vice chair Lael Brainard, indicating that the central banking organisation will indeed focus more on inflation strengthened the dollar and also might have affected rates in the fixed income markets. Both moves are in theory at least factors that could decrease the attractiveness of gold as a strong dollar makes it less affordable for other currency holders, while higher rates increase the opportunity costs of holding the non-yielding precious metal.

A sizable amount of important fundamental data from the U.S., including the monthly PCE price index can be expected on Wednesday.

Gold

WTI Oil

Oil prices started to recover on Monday. Reports are emerging that OPEC+ might act on the recently coordinated actions or plans of countries like China and India to release crude oil from strategic reserves. Some speculate that OPEC+ participants might decide to hold off from raising production quotas as previously agreed as one of the measures to counter the impact of the strategic reserves release.

As usual this week the American Petroleum Institute (API) publishes its weekly statistical bulletin on Tuesday, while the Energy Information Administration (EIA) follows with its weekly data on crude oil, gasoline and distillate stockpile changes on Wednesday.

WTI Oil

US 500

After major indices like the US Tech 100 and US 500 indices reached new all-time records on Monday in the hour after the regular stock market was opened, a rather strong retracement set in, with indices continuing to push lower by Tuesday morning.

The Volatility Index VIX meanwhile continued to gradually move higher and is at this time despite indices trading close to all-time records significantly elevated compared to a month ago in the continuous future CFD.

Companies involved in the development and production of COVID 19 vaccines continued to perform very strongly with BioNTech (+11.11%) leading the field, followed by Novavax (+8.00%) and Moderna (+7.32%).

After an already weak performance during the regular trading session, stocks of Zoom Vide Communications further declined in the late trading session despite the company managing to outperform compared to investors’ expectations on both earnings at $1.11 per share (adjusted) and revenue at $1.05 bn. in the past quarter. Investors might have however been disappointed to hear that it expects only slow growth in the following quarter with a revenue guidance of $1.051 bn. to $1.053 bn.

On Tuesday quarterly results from companies including Best Buy and XPeng can be expected.

US 500

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