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While the dollar clearly strengthened its position against other major currencies on Friday and Monday as seen in the performance of the USDX, among emerging market currencies the sentiment remained mixed. Some upside was seen in the USD/RUB pair and the USD/TRY also closed clearly higher on a weekly basis, others however like the USD/ZAR and USD/MXN merely stopped moving lower but did not reverse significantly at this time.
Sentiment among many of the top cryptos was still moderately negative with Bitcoin trading now below $45k and the total crypto market cap estimated to have fallen below $2.15 trillion. Most of the bigger cryptos by market cap including Bitcoin, Ethereum and Cardano are still down by double-digit percentage since the plunge on Tuesday last week with values in some cases still moving lower in that aftermath. Still, some rather few altcoins by now have recovered most of these losses and are trading up on a 7-day basis like it is the case for TRON and Polkadot.
Sentiment among major stock market indices was once again mixed. Clear losses were seen among US indices like the US 500 and US Tech 100, while in Europe markets like the Germany 30 and Europe 50 traded only moderately lower from the recent losses. In Asia the mood was however in some parts quite positive with the China A50 starting a recovery on Friday, while the Japan 225 (Yen) index continued to rally higher reaching the highest index level since February.
Very few perceived to be market-relevant events are scheduled for Monday. Christine Lagarde and some other ECB board members do have scheduled talks at different events on Monday, which however do not have the currently asked key questions when and how to taper the asset purchase programs and the rising inflation rates as their topics. Later in the Asian-Pacific trading session housing price index data will be published in Australia and capacity utilisation and industrial production statistics in Japan.
The US dollar continued to recover against other majors on Friday and especially on Monday morin, with the EUR/USD pair falling for the first time since September 1 below 1.18. This move however can also to some extent be attributed to the weakness of the common European currency itself, which traded weaker against most other majors with few exceptions like the EUR/AUD pair that remained relatively unchanged.
Industrial production data for France and Italy released on Friday indicated a moderate downturn in terms of monthly growth, which however was also to be expected, with the French industrial production growth rates falling to +4.0% on an annualised basis, which Italian was down to +7.0% after growth of +13.9% reported in June. US wholesale trade was still up on a monthly basis but grew as expected by only 0.6% compared to 1.1% growth in June.
Gold prices settled lower on Friday, falling below the $1,800-mark in the spot markets after prices were unable to push above $1,805 during the morning hours on Friday. Other precious metals including silver, platinum and palladium settled also lower on a weekly basis, while the latter reached a new 13-months low after falling more than 12% over the course of last week.
Speculative net positions in US futures according to the Commitment of Traders (COT) report from the U.S. CFTC released on Friday was slightly lower on a weekly basis, but nonetheless remained above the 200 thousand mark.
While Monday is set to be a relatively quiet day in terms of fundamental data, by Tuesday markets will once again have real-world numbers to digest including the consumer price index (CPI) for the U.S., which some analysts predict might come down at least a little bit from the 5.4% annualised growth seen last month.
Thanks to the upside move on Friday, oil prices managed to closed the week marginally higher. While the U.S. Baker Hughes Oil Rig Count showed a moderate improvement in activity with the oil rig count rising from 394 to 401, there were still reports that a majority of platforms in the Gulf of Mexico were still not operating as of Friday in the aftermath to Hurricane Ida.
This week as usual the American Petroleum Institute (API) publishes its weekly statistical bulletin on Tuesday, followed by weekly data from the Energy Information Administration (EIA) on Wednesday, which includes statistics on stockpile changes for crude oil, gasoline and distillates.
As major stock market indices like the US 500 and the US Tech 100 settled once again clearly in the red, this also led to the worst weekly performance for the former index in three months. The Volatility Index VIX in turn continued pushing higher, trading significantly higher compared to the same time a month ago in the continuous future contract.
The retail company Kroger (-7.39%) was by a wide margin the worst performing stock on Friday included in the S&P 500 index. Despite the company lifting the full-year guidance for this year, expecting earnings per share (EPS) between $3.25 and $3.35, there are concerns among investors what the impact of inflation and supply chain expenditures would have on the company’s bottom line.
After a positive performance on Thursday, a sharp reversal affected airline companies on Friday including American Airlines (-6.07%) and United Airlines (-4.76%), which closed at the bottom among values included in the S&P 500.
One sector looking brighter was the chip sector (US Semiconductors ETF +0.74%) with companies like Micron (+0.88%), Intel and Texas Instruments (+1.21%) closing at least somewhat in the green. The ongoing shortage in semiconductors might be seen as an opportunity at least for some time for some companies. It should be noted that some of the best-known companies producing chips, where retail consumers might make a conscious purchase decision like AMD (-0.92%), Nvidia (+1.40%) and Qualcomm (+0.88%) however operate ‘fabless’ and thus are still dependent on actual producers to make their end-product.
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