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12
Oct

German ZEW Survey, CPI, UK Unemployment Data

calendar 12/10/2021 - 08:34 UTC

The USD/TRY pair continued to push higher, reaching a new all-time high by Tuesday morning above 9.0 for the first time ever. The USD/ZAR pair was also moving higher on Monday, trading again above the 15.0-threshold. After reaching a new low since June, the USD/RUB rate moderately rebounded, trading around 72.0 by Tuesday morning.

The rally in Bitcoin continued as the biggest cryptocurrency by market cap, reached for the first time since May levels around $57k and stopped its surge higher on Monday just a bit below $58k. The total market cap of the crypto market however remains close to unchanged at around $2.4 trillion as other altcoins like Cardano, Ripple and Dogecoin did not perform so well like Bitcoin which is estimated now to have a 45% dominance in the crypto market.

While major indices in the United States and also in Europe were under pressure, mixed results were seen in other regions such as Asia and some emerging markets. Especially Japanese indices like the Japan 100 traded with a strong upside gaining more than one per cent on Monday. The same could be said about the South Africa 40 index also performing strongly.

Labour market statistics from the United Kingdom were seen as overall positive, with the unemployment rate as expected declining slightly from 4.6% to 4.5%, while average earnings are up by 7.2% on an annualised basis. Some see this still as only a very moderate improvement given the impact on wages last year due to the pandemic as well as rising rate of inflation.

EUR/USD

The EUR/USD pair traded lower by the end of the day on Monday, while remaining for now within the range seen over the course of last week. The euro managed to improve noticeably against the weakened Japanese yen (JPY), while the EUR/AUD pair on the other hand was trading at the end of the day on Monday down by 0.67% compared to the closing rate on Friday.

Italian industrial production was down in August by 0.2% on a monthly basis, which was slightly better than anticipated. On Tuesday data from German on the ZEW survey as well as the consumer price index (CPI) can be expected.

EUR/USD

Gold

Gold prices were relatively stable on Monday, while by Tuesday morning a clear upside could be seen. This comes despite the ongoing strength of the dollar as well as rising yields in the fixed income markets as for example the 10-year U.S. T-Note benchmark is trading these days now above 1.6%. In theory higher yields mean also higher opportunity costs of holding non-yielding assets like gold. However, some investors might also have the current risk from inflation in mind as well as potentially considering the impact of large buyers like central banks on the global demand and supply situation.

One of the key statistics releases this week could be the consumer price index (CPI) in the United States. Last month the CPI increase on an annualised basis was for the first time coming down in almost a whole year, while there is still significant uncertainty whether or not the nature of the inflation is indeed just transitionary.

Gold

WTI Oil

While oil prices ended the day on Monday once again higher, the WTI crude oil November future was unable to maintain the daily high above $82 per barrel. Natural gas prices are meanwhile continuing to come down with prices moving once again lower by Tuesday morning after trading down by around 3.5% already on Monday.

Markets might have been stabilised at least to a certain extent as repots such as from Reuters surfaced that Saudi Arabia and even Kuwait are planning to increase crude oil volumes shipped to Asia in the near future.

The weekly statistical bulletin by the American Petroleum Institute (API) will be published this week on Wednesday, followed by data from the Energy Information Administration (EIA) on crude oil, gasoline and distillate stockpiles on Thursday.

WTI Oil

US 500

Major U.S. stock market indices like the US 500 and US Tech 100 all closed lower on Monday and continued to face pressure by Tuesday morning. With this in mind the Volatility Index VIX has been trading up by Tuesday morning.

Gaotu Techedu (+19.37%) was one of the best-performing stocks in the market on Monday, while closing down by more than seven per cent the Brazilian investment management company XP Inc. was one of the biggest disappointments.

This week companies that are known for releasing their quarterly results among the first each earning season are expected also to start reporting, including JPMorgan Chase and Delta Air Lines on Wednesday, Bank of America, Citigroup and Wells Fargo on Thursday, followed by Prologis on Friday.

US 500

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