30 September 2019 Weekly Analysis
GCMAsia Weekly Report: September 30 – October 4
Market Review (Forex): September 23 – 27
US Dollar
US dollar was traded higher in overall while ending last week Friday session at the price of 98.71 amid series of upbeat data and positive development in U.S and China.
Last Friday, durable goods order in the U.S were improved to 0.2% which is far exceed market expectation of -1.1%, according to U.S Census Bureau. The readings proven that durable product orders remain strong and production activity in the U.S remain high despite ongoing tension between U.S and China. Besides that, consumer sentiment also improved based on the official figures released by University of Michigan. According to the data, consumer confidence have improved to 93.2, higher than economist expectation of 92.0 which also help boosted the appeal of the dollar.
Moreover, U.S President Donald Trump have shown some positivity on the trade development between U.S and China, stated that China will reach a trade deal with U.S “very soon” and praised China. Beijing have also express their willingness to purchase more U.S product to illustrate its sincerity to reach a trade deal with U.S, ending the ongoing trade war. Thus, the trade truce further boosted market confidence and hopes of achieving a trade deal which sent the dollar into a bull rally.
Still, investors will remain in focus on the ongoing development between the two economic powerhouses as the tension still not completely resolved. At the same time, U.S economic data will also continue to be eyed by investors to further gauge on U.S economic health.
USD/JPY
USD/JPY was traded higher last week while closing last week trading session at the price of 107.92. As robust economic data in the U.S coupled with positive trade news, market participant have turned on their risk appetite and place more bets on riskier assets such as greenback.
EUR/USD
EUR/USD remain pressured and appears to continue heading for losses as market continue to remain skeptical towards its economic fundamentals. Last week, inflation related data in the Euro have was showed to be weaker. German import prices have declined to 0.6% in August against the forecast reading of 0.3%. Consumer spending also falling short of analyst estimate. At the same time, news of U.S received a record award that could allow U.S to hit European imported products with billions of dollars in tariff further caused investors to sell-off the currency.
GBP/USD
GBP/USD extended its losses on Friday while closing the market at around 1.2287. The pound sterling was hammered aggressively by traders last week following dovish comments from BoE member Micheal Saunders. Last Friday, Saunders stated that Brexit that The Bank of England may need to cut interest rates in the likely scenario that high levels of uncertainty over Brexit persist. It was the first clear signal that the BoE is considering a rate cut which sending further disappointment towards the already weaken currency. As Brexit uncertainty still in play, market continue to eye on fresh Brexit headlines and further signals.
Market Review (Commodities): September 23 – 27
GOLD
Gold price suffered major losses last week while closing last Friday trading session at the price of $1496.75 a troy ounce. The safe haven metal have plummeted following reports Saudi Arabia would agree to a ceasefire in Yemen, where it has been fighting anti-government Houthi rebels for the last four years. With the truce in the Middle East and also U.S with China, risk sentiment have soared as market shifting their investment portfolio to riskier markets to capitalize on the positive news. Still, market will continue to concentrate on fresh catalyst from the financial market to determine its further sentiment.
Crude Oil
Oil prices continue to fell on last week while closing the market session with $56.12 per barrel. The oil price remain pressured as tensions in the Middle East delivered a surprising turn of events.
According to reports from Wall Street Journal, Saudi Arabia have agreed to impose a temporary cease-fire in Yemen. Iran have previously approached Saudi Arabia with offer to de-escalate the tension between Saudi and Yemen and both sides are on board and agreed to a ceasefire. Market also expect that the cease-fire could be broaden to other parts of Yemen if it proves durable.
On other hand, surfaced rumors of U.S is considering for easing sanctions on Iran coupled with Saudi Arabia restored its disrupted supply from damaged oil facility have limited any positivity on the commodity. Iranian President Hassan Rouhani also claimed on Friday that the U.S. offered to remove oil sanctions if Iran returned the negotiating table.
Likewise, oil price are expected to remain heading for downside following easing tension in the Middle which could lead to an increase of supply. At the same time, the unresolved dispute between U.S and China could continue to affect the demand for the commodity despite recent upbeat developments.
Weekly Outlook: September 30 – October 4
For the week ahead, investors will keep a close eye on important data such as Non-Farm Payroll that will be released this week to attain more market signals. Besides that, investors will also continue to focus on the development of trade talk between U.S and China.
As for oil traders, they will be eyeing on US inventories level reported by API and EIA as well as developments in the Middle East to gauge the strength of crude demand for world’s largest oil consumer.
Highlighted economy data and events for the week: September 30 – October 4
| Monday, September 30 |
Data CNY – Manufacturing PMI (Aug) CNY – Caixin Manufacturing PMI (Aug) EUR – German Unemployment Change (Sep) GBP – GDP (QoQ)
Events N/A
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| Tuesday, October 1 |
Data JPY – Tankan Large Manufacturers Index (Q3) JPY – Tankan Large Non-Manufacturers Index (Q3) AUD – RBA Interest Rate Decision (Sep) EUR – German Manufacturing PMI (Sep) GBP – Manufacturing PMI (Sep) EUR – CPI (YoY) (Sep) CAD – GDP (MoM) (Jul) CAD – ISM Manufacturing PMI (Sep)
Events AUD – RBA Rate Statement
|
| Wednesday, October 2 |
Data CrudeOIL – API Weekly Crude Oil Stock GBP – Construction PMI (Sep) USD – ADP Nonfarm Employment Change (Sep) CrudeOIL – Crude Oil Inventories
Events N/A
|
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Thursday, October 3 |
Data GBP – Composite PMI (Sep) GBP – Services PMI (Sep) USD – ISM Non-Manufacturing PMI (Sep)
Events N/A
|
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Friday, October 4
|
Data AUD – Retail Sales (MoM) (Aug) USD – Average Hourly Earnings (MoM) (Sep) USD – Nonfarm Payrolls (Sep) USD – Unemployment Rate (Sep) CAD – Ivey PMI (Sep)
Events N/A
|
