English (India)
25
Nov

UK CBI, Australian Retail Sales, Rising U.S. Consumer Spending

calendar 25/11/2021 - 08:53 UTC

After the double-digit percentage rise on Tuesday, the USD/TRY pair also strongly retraced on Wednesday, making the lira one of the best-performing currencies at least on a daily basis. Some other emerging market currency pairs like the USD/ZAR or USD/MXN were however trading clearly higher. Overall as seen in the strong performance of the USDX, the greenback performed quite strongly declining only against few other major currencies like in the USD/CAD pair.

After a mixed performance on Wednesday, by Thursday morning Bitcoin and Ethereum were again in the green, with Ethereum by now even trading slightly up compared to a week ago. Some altcoins however like Cardano and Shiba Inu coin still show a double-digit percentage drop over the past week. Given its strong performance over the past weeks, Avalanche at around $27.5 bn. market cap is just a bit more than a billion behind Dogecoin on that metric and on the 9th place among non-stablecoins, followed by the also strongly performing Crypto.com Coin.

As major U.S. stock market indices like the US 500 and US Tech 100 ended the day once again in the green, the Volatility Index VIX moved for once lower. In other regions the sentiment was quite mixed with European markets like the Germany 40 or the Europe 50 continuing to decline by Thursday morning for the sixth trading day in a row. In Asia the Japan 225 (Yen) closed noticeably lower, while the China A50 and India 50 (USD) are trading relatively stable with some ups and downs over the past days.

With most major data releases in the U.S. done on Wednesday ahead of the Thanksgiving Holiday, only very few fundamentals can be expected today and on Friday. On Thursday the CBI Distributive Trades statistic will be published in the United Kingdom, while later from Australia retail sales numbers can be expected.

EUR/USD

As the U.S. dollar continued appreciating, the EUR/USD pair fell once again to a new low since June 2020, trading at time even below the 1.12-mark. While the pair was moving down from a level as high as 1.125 in the morning hours on Wednesday, the drop below 1.12 occurred a short while after fundamentals from the U.S. started coming in. At the time of the release of the core PCE price index for October, which as expected rose on year-on-year basis from 3.6% in the month before to 4.1% the currency pair made only a brief jump higher, while continuing to move gradually lower over the following half hour.

The euro itself was trading weaker against other major currencies, with the exception of the New Zealand dollar (NZD) as the EUR/NZD pair was trading by Thursday morning at a 13-days high.

EUR/USD

Gold

Despite the strong dollar, gold prices were relatively steady on Wednesday and moved slightly higher by Thursday morning, while still remaining below the $1,800 threshold in the spot markets. A similar sentiment was observed also among other precious metals like silver and platinum.

While the drop in gold prices might be painful for some bullish short-term investors, since the beginning of the month gold prices are still up, and given the strength of the dollar, the precious metal trades quite favourably against other currencies with the Gold (EUR) CFD still trading at the highest level compared to the past 12 months and the Gold (gm. TRY) CFD reaching an all-time high this week due to the collapsing value of the Turkish lira.

Gold

WTI Oil

Oil prices settled only marginally higher on Wednesday while at the time of the weekly data release from the Energy Information Administration (EIA) a moderate upside was seen, which reversed in the following hours. The EIA data indicated a moderate increase in crude oil stockpiles over the past reporting week by one million barrels, which was less than the 2.3 million barrels estimated by the American Petroleum Institute (API) a day before. Gasoline and distillate stockpiles however were down by 0.6 million barrels and 2.0 million barrels respectively.

The U.S. Baker Hughes Oil Rig Count was released this week for once on Wednesday due to the upcoming Thanksgiving Holiday and indicated a continued increase in the number of operating oil rigs, reaching now 467 as the number has been rising steadily over the past five consecutive weeks.

WTI Oil

US 500

While major stock market indices like the US 500 initially traded lower with data like durable goods new orders with a decline of 0.5% in October probably initially disappointing some investors, equities climbed in the following hours of trading possibly also due to better than anticipated data on personal income at +0.5% in October and rising consumer spending at +1.3%, which was both better than anticipated and clearly better than the data in the month before. While the PCE price index indicated a continued increase in prices, the level was mostly matching expectations.

Autodesk (-15.44%) was one of the worst-performing shares on Wednesday despite the company reporting better earnings at $1.33 per share and revenue at $1.26 bn. The weak guidance for the following quarter, estimating earnings at $0.71 to $0.77 per share as well as a moderate decline in revenue might have been a key factor why investors seemed to be disappointed by the quarterly results.

After a moderate correction on Tuesday, chip stocks (US Semiconductors ETF +1.00%) were once again outperforming many other sectors with stocks like AMD (+5.24%) and Nvidia (+2.80%) among the top five daily performers in the NASDAQ Composite Index.

While most companies by now did report their quarterly results, still next week a few earnings can be expected including from Hello Group, Salesforce and Zscaler on Tuesday as well as CrowdStrike and Snowflake on Wednesday.

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.