English
15
Sep

EU/US Industrial Production, FR/IT Inflation, Japanese Trade Balance

calendar 15/09/2021 - 05:08 UTC

At the end of the day many dollar-currency pairs traded with only smaller daily changes after markets quickly recovered from the intraday move following the release of the US CPI. Among emerging markets maybe the move higher without significant reversal by the USD/ZAR pair was one of the more noticeable events that day. The first move higher that day seemed to have accelerated around the time monthly mining production data was published, which at an annualised rate of improvement of 10.3% lagged significantly behind what was seen in the month before.

Sentiment in the crypto markets was for once rather positive with Bitcoin trading again above $47k and the total crypto market cap exceeding $2.2 trillion. Among the top 10 altcoins by market cap the move of Polkadot might be the most bullish in that basket, as the crypto already exceeded the pre-sell-off levels from last Tuesday significantly and at its peak on Tuesday was up by around 38% on a weekly basis (Wednesday – Tuesday).

After many stock market indices around the world closed in the red on Tuesday, among European indices like the Germany 30 or the Europe 50 a recovery to the levels seen at the start of the week could be observed by Wednesday morning. The India 50 (USD) index was seen testing the resistance level from last week at levels very close to its previous all-time high. The index is up by close to ten per cent since the beginning of August.

More consumer price index (CPI) data can be expected on Wednesday, not only from a few EU countries but also now from Canada. From the US data on import and export prices, industrial production, capacity utilisation and the Empire State General Business Conditions survey are expected. Later in the Asian-Pacific trading session New Zealand’s Q2 GDP figures, Australia’s unemployment rate for August and Japan’s trade balance numbers will be published.

EUR/USD

The EUR/USD pair moved noticeably higher after the monthly CPI release, where the rate of consumer price inflation was surprisingly lower than anticipated at just 0.3% in the month of August after reaching 0.5% in the previous month. With that the annualised inflation rate retreated from 5.4% to 5.3%. While central banks continue supporting quite dovish monetary policies, lower rates of inflation might confirm their stance that the currently seen trend was just transitionary, which gives them good time to leave zero or even sub-zero interest rates

On Wednesday further CPI data will become available with France and Italy releasing their numbers for August. At the annualised levels of 1.9% and 2.1% respectively in the previous releases both figures are getting closer towards the average range of two per cent set by the European Central Bank (ECB) as a target in its monetary policy. Analysts expect not a material change from these levels to be seen in the August numbers.

EUR/USD

Gold

Gold prices initially moved lower on the CPI release but quickly rebounded and moved even past the $1,800-threshold. Silver prices also traded a bit higher at the end of the day, however remained mostly within the range seen over the past days.

Platinum and palladium prices however continue plummeting with palladium rapidly falling below the $2,000 mark to a new 14-months low and month-to-date with the worst monthly performance in years with losses at the low point on Tuesday moving past 22%. Compared to that even the move lower by platinum by as much as 8.3% seems tame as that precious metal is also on track to trade lower for the fifth month in a row.

Gold

WTI Oil

Oil prices continued pushing higher with even the earlier news that China planned to release crude oil from its strategic reserves, a move seen as an attempt to try balance the rising prices of oil. Prices received positive momentum in the later hours on Tuesday when the weekly statistical bulletin released by the American Petroleum Institute (API) showed a further draw from crude oil stockpiles amounting to 5.4 million barrels over the past reporting week. A decrease in gasoline and distillate inventories by 2.8 and 2.9 million barrels might have also underscored the impact of the draw.

On Wednesday the Energy Information Administration (EIA) publishes its weekly data, which also includes statistics on changes in the stockpiles of crude oil, gasoline and distillates.

WTI Oil

US 500

After stabilising on Monday, the US 500 index rapidly declined during the trading session on Tuesday, falling to the lowest level in three weeks. Other major market indices like the US Tech 100 and the US 30 also continued heading South.

One sector that stood out with moderately positive performance in this bear market was once again the chip sector (US Semiconductors ETF +0.10%) with the ETF reaching a new all-time high on Tuesday.

Wynn Resorts (-10.94%) and Las Vegas Sands (-9.78%) were the two worst-performing components of the S&P 500 index on Tuesday following the announcement that Macau would tighten its rules for casinos, while it also remains to be seen if and by how long the regulator will extend the current concessions due for expiry in mid-2022.

Microsoft (+1.00%) stocks were meanwhile the best-performing value in the Dow Jones Industrial Average as the company unveiled a $60 billion stock buyback program, while also announcing an increase of quarterly dividends to shareholders.

US 500

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