English (India)
19
Oct

US Housing Starts, Permits, Japanese Trade Balance

calendar 19/10/2021 - 07:59 UTC

While the dollar was relatively stable against other major currencies as seen in the performance of the USDX, multiple emerging market pairs including the USD/MXN and USD/RUB turned higher on Monday. The USD/TRY pair continued moving higher, trading by the end of the day on Monday up by around one per cent compared to Friday and then pushing on to another all-time high on Tuesday night.

The rally in the crypto markets took a break with the total market cap falling again a bit below $2.6 trillion, while Bitcoin is still struggling to reach the $63k mark. While Ethereum traded moderately lower some altcoins including Dogecoin and Binance Coin moved gradually higher at that time.

While indices in Europe were even by Tuesday morning under pressure, some equity indices in the United States like the US Tech 100 continued to push higher. Some Asian indices like the Japan 225 (Yen) and China A50 made a noticeable recovery by Tuesday after steep losses at the beginning of the week.

Relatively few fundamental data releases are due from Europe on Tuesday, while from the U.S. especially data on housing statistics and store stales is expected. Later in the Asian-Pacific trading session the Japanese trade balance will be published.

EUR/USD

The EUR/USD pair moved moderately higher over the course of the session on Monday, and then over the course of the night to Tuesday gradually rose to levels above 1.165, reaching the highest level in 20 days. This came at a time when the dollar weakened. The common European currency performed a bit mixed against other majors. The EUR/USD pair managed to clearly recover from the recent 20-months low, while the EUR/AUD pair continued to slide lower.

U.S. data on industrial production and capacity utilisation was significantly weaker than anticipated with the former falling by 1.3% on a monthly basis in September, while the latter reduced from 76.4% to 75.2%.

On Tuesday from the U.S. data on housing starts and permits as well as the Redbook Store Sales statistic can be expected.

EUR/USD

Europe 50

While in the U.S. a modest uptrend could be seen in the stock market, major indices in Europe like the Europe 50, France 40 and others closed clearly lower on Monday.

Car manufacturers like Stellantis (-1.80%), Volkswagen (-3.05%) and Daimler (-2.02%) was some of the underperformers on Monday, while travel sector companies like Airfrance KML (-2.16%), Lufthansa (-1.54%), Accor (-3.04%) also underperformed.

Danone opened lower on Tuesday following the release of its Q3 results. The company reported an increase in sales in all regions and only a contraction in the sale of specialized nutrition compared to last year. However the volume overall contracted and part of the gains was attributed to the appreciation of currencies including the Chinese yuan, Mexican peso and the pound sterling.

For Wednesday earnings from Carrefour and ASML Holding can be expected, while on Thursday SAP, L’Oreal and Randstad are releasing their results.

Europe 50

WTI Oil

Oil prices settled at the end of the day lower on Monday after briefly trading at yet another new high since 2014. Significant volatility was once again observed in the natural gas market with the price of the Natural Gas CFD ending the day 7.8% lower compared to Friday.

This week the American Petroleum Institute (API) publishes its weekly statistical bulletin as usual on Tuesday, followed by weekly data on crude oil, gasoline and distillate stockpile changes by the Energy Information Administration (EIA) on Wednesday.

WTI Oil

US 500

While the US 500 index closed on Monday marginally higher and the US 30 posted some small losses, the US Tech 100 index broke out higher gaining 0.91% compared to Friday, while the FANG+ index ended up by more than two per cent.

Cloudflare (+8.98%) was one of the best performers on Monday. The company announced a collaboration with some of the bigger search engine providers including Microsoft and Yandex to help improve the search results for websites.

Disney (-3.13%) on the other hand was one of the worst performers after analysts from Barclays downgraded the stock over concerns that the subscriber goals set by the company could be too optimistic.

The earnings season is starting to take shape as more companies are expected to release their results this week including Johnson & Johnson, Procter & Gamble, Netflix, United Airlines and Philip Morris are releasing their results on Tuesday. Then on Wednesday results from IBM, Verizon, Abbott Laboratories and Tesla can be expected.

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.