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14
Sep

US CPI, NZ Current Account, Chinese Industrial Production

calendar 14/09/2021 - 08:10 UTC

The USDX index ended the trading day on Monday after some intraday volatility relatively unchanged, while among EM pairs a clear downwards trend could be observed with pairs including USD/RUB, USD/MXN, USD/ZAR and even USD/CNH trading clearly lower by Tuesday morning compared to the market close rate from Friday.

While the overall crypto market was relatively stable with the total market cap now estimated to reach just about $2.15 trillion, significant volatility was seen in Litecoin, which around 1 PM GMT on Monday jumped higher by close to 25% within just an hour. This move was attributed to rumours that Walmart would start accepting the cryptocurrency. However, the company made it quickly clear that this news release was not authentic and Litecoin, which was by Friday morning in on the 12th place in terms of market cap among non-stablecoins returned more or less to its previous position.

Sentiment in the global stock markets was once again mixed with the US Tech 100 index ending the day lower, while multiple other indices not only in the US, but also in Europe like the Germany 30 or Europe 50 ended the day higher. In Asia the Japan 225 (Yen) index continued rallying higher with a month-to-date performance of more than +7.5%, while the China A50 after a relatively stable trading session on Monday moved clearly lower by Tuesday morning.

EUR/USD

At the end of the day the EUR/USD pair traded almost unchanged after a brief intraday drop, with the pair touching on a new two weeks low. One factor fuelling the intraday dollar-rally, which reversed later on, could have been the expectation that the US Federal Reserve might move to reduce the speed of the asset purchasing program by the end of the year. Central banks are right now in a delicate position having to navigate between the rising tide of inflation, while at the same time not threatening the accomplishments from its pandemic-related interventions.

Spanish consumer price index (CPI) statistics showed as anticipated a further increase in price levels, for August at a pace of 3.3% compared to the same month a year ago. More European CPI statistics can be expected over the coming days with Spain and Italy set to release their numbers on Wednesday and the EU on Friday.

EUR/USD

Gold

Gold moderately rebounded on Monday but was not able to surpass the $1,800 mark in the spot markets. Some other precious metals including silver and palladium on the other hand pushed lower with the latter reaching once again a new 13-months low.

One of the key data releases on Tuesday might be the CPI statistic for August. It is anticipated that the high level of inflation of 5.4% seen last month will not subdue significantly in this release. For long-term investors in perceived ‘safe haven’ assets like gold or US Treasuries, the rate of inflation is also a significant factor in making the right investment decision. Should the currently experienced inflation, which is technically the devaluation of currency persist, long-term rates like the 10-year US T-Note benchmark, which is currently hovering just above 1.3% could in real terms be seen as negative. Gold is seen in those times as a hedging instrument against inflation, however no one can also completely certainty predict the real value of the precious metal for the decades ahead as well.

Gold

WTI Oil

Oil markets retained the positive momentum from Friday with the WTI crude oil October futures contract rising above $71 per barrel, pushing oil prices towards a new six-weeks high by Tuesday morning. One potential factor moving the oil markets might have been the release of OPEC’s Monthly Oil Market Report, which revised oil demand expectations for 2022 up by 0.9 million barrels per day.

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.

WTI Oil

US 500

US stock market indices closed only with moderate daily changes on Monday with the US 500 index ending the day with a marginal upside, while the US Tech 100 index closed somewhat lower. In the last hour of the regular stock trading session (7 PM – 8 PM GMT) a noticeable recovery took place in the market recovering a sizable part of the intraday losses.

Oracle shares moved lower by a few per cent in after-hours trading after the company’s earnings seemed to be a bit of a disappointment, especially in terms of revenues, which at $9.73 bn. increased slower than anticipated after the increase of 8% in the previous quarter. The earnings guidance at $1.09 -$1.13 per share however, might have been a bit better than anticipated and also an improvement compared the now reported EPS (adjusted) of $1.03.

Moderna (-6.62%) and BioNTech (-6.23%), two companies associated with the so-far most successful COVID-19 vaccines were among the worst performers on Monday. One possible factor was a review published in the highly regarded medical publication ‘The Lancet’, which indicated that for most people a booster vaccine against COVID might not be needed given their high efficiency. This comes at a time when Israel, a country with one of the fastest rollouts of the Pfizer-BioNTech vaccine is mulling to make the issue of its Green Pass from next month on depending on receiving a booster vaccine or having the fist two doses administered within the past five months.

US 500

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