Please leave a message and we will get back to you.Send
The U.S. dollar and especially the Japanese yen (JPY) significantly appreciated against multiple major currencies with the EUR/USD pair reaching a new low since 2017, while the GBP/USD pair was down to its lowest level since May 2020.
While the strong dollar also affected the USD/TRY pairs the move to the upside amounting to less than one per cent was fairly moderate if compared to the market volatility even among major currency pairs with the dollar-lira pair not moving significantly above the 15.5-mark. Multiple other dollar-emerging market pairs also were trading fairly stable like the USD/INR and even moved lower as was the case for USD/MXN and USD/ZAR.
By Friday morning many major cryptocurrencies managed to recover part of their losses after the brutal sell-off in almost the entire crypto market pushing the total market cap at times to levels around $1.2 trillion. Bitcoin managed to recover from a low in the $25k range above $30k, while Ethereum traded at $2.1k following a low around $1.7k. Terra, the coin that was just a week ago traded above $80 remained close to worthless trading at a few cents at best, while the supposed stablecoin TerraUSD continues to lose appeal and traded by Friday morning at times even below five cents (stablecoins to USD are supposed to remain stable around one dollar) on some of the most popular crypto exchanges trading that product. Other popular stablecoins, in particular Tether remained close to their intended price point after experiencing some ups and downs over the past days. People involved with Tether sought to assure investors that their cryptocurrency was supported by actual holdings and they had no problems with redemptions.
On Friday U.S. data on import and export prices as well as the University of Michigan consumer sentiment survey will be released.
With the U.S. dollar continuing to outperform many other currencies the EUR/USD pair dropped on Thursday by more than 1.2%, trading at times not far from the low from January 2017. In other markets the strength of the dollar allowed the USD/CHF pair to trade for the first time since 2019 above par value as the pair has been rising over the past month almost in a straight line.
The still high level of inflation, showcased on Thursday by the U.S. producer price index (PPI) at 11% (y/y) continued to affect the markets.
On Friday eurozone industrial production data and French consumer price index (CPI) statistics can be expected.
While many U.S. stock market indices were under pressure during the session on Thursday, multiple European market indices like the Europe 50 and the Germany 40 closed in the green and with the continued upside seen by Friday morning are for the first time in six weeks on track to end the week with a green candlestick. The weaker euro compared to the dollar might have been one factor influencing the market as this makes European exports more competitive and investments comparably cheaper.
While oil prices ended up moderately higher on Thursday with the upside continuing into the session on Friday, on a weekly basis the price of oil is still in the red given the steep decline in prices during the first half of this week.
Natural gas prices (Henry Hub Futures) moved also up moderately higher, while prices in Europe surged higher according to multiple sources including the Financial Times as Russia sanctioned multiple entities in Europe. Besides the recent curbs in Ukrainian gas transits, now the complete halt by Russia in terms of gas shipments though the Yamal pipeline through Poland is seen as a factor capable of significantly reducing supplies.
As usual on Friday the U.S. Baker Hughes Oil Rig Count numbers will be published. With the increase by 5 operating oil rigs to 557 this metric was up for the ninth week in a row.
Significant volatility could be observed in the markets on Thursday and while at the end of the day the US 500 index closed almost unchanged the daily move between high and low amounted to more than 2.7%. One of the sectors that managed to turnaround from the losses of the past day was biotech (US Biotech ETF +2.83%) while stocks of many companies involved in making COVID vaccines like Novavax (+11.42%) and Moderna (+5.37%) started to recover. Though even with these gains they are still trading deep in the red on a weekly basis.
Apple (-2.53%) which is still the biggest market cap stock in many major U.S. indices continued to underperform and given its high weight within indices like the S&P 500 and NASDAQ Composite it affected the daily performance. With the recent drop in Apple stocks, it is globally now only number two in terms of market cap after Saudi Aramco.
In terms of earnings next week on Monday Wix.com is releasing their results, followed by Home Depot, Walmart, Sea Limited and others on Tuesday and then Target and TJX on Wednesday.
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.