Last week saw market participants digest a wave of US data which included a strong retail sales print. The greenback surged above the 93.00 as market participants look towards this week’s FOMC Meeting for further guidance and direction regarding the impending taper announcement. Commodity currencies were on the pressured as the week progressed with Australia reporting a loss of over 140,000 jobs in the past month. The week ahead will see several major Central Bank meetings as financiers and investors remain cautious over the path of the economic recovery.
Markets in Asia began the week negatively amid the Evergrande concerns and a continued slump in commodities. Risk appetite was on the backfoot with a few holiday closures in the region and a busy Central Bank focused week ahead. The Hang Seng dropped nearly 5% whilst Evergrande plunged by another 17% on growing default fears. It has been reported that the company who currently owe over $120mln in bond coupon payments have been repaying investors with discounted real estate. The ASX 200 was lower by around 2% as underperformance in mining names and ongoing woes in commodities spooked market participants.
Commodities & WTI Crude Focus
Commodities overall were lower to start the week; WTI Crude has dipped back below the $71/bbl. level on a cautious risk tone. This comes following recent comments from Iraq’s Oil Minister who outlined that OPEC+ are working to maintain a price of $70/bbl. for Q1 of next year. Gold remained subdued on the firmer greenback but has since steadied around $1,750 following its recent decline through the $1,800 handle last week.
On the Covid-19 front; the US is to buy hundreds of millions more doses of the Pfizer/BioNTech vaccine to donate to the world. This comes as the US CDC noted that all three US-approved Covid-19 vaccines were found to be effective. In Japan, the government are mulling lifting the state of emergency at the end of the month whilst New Zealand PM Ardern outlined that the lockdown in Auckland will be eased to level 3 from midnight on Tuesday.
Here is a breakdown of the high impact data releases this week.
All Day Federal Election. Markets to watch: CAD Crosses
02:30 Monetary Policy Meeting Minutes. Markets to watch: AUD Crosses
19:00 FOMC Economic Projections & FOMC Statement. Markets to watch: USD Crosses
19:30 FOMC Press Conference. Markets to watch: USD Crosses
08:30 SNB Monetary Policy Assessment. Market to watch: CHF Crosses
08:30 German Flash Manufacturing & Services PMI. Markets to watch: EUR Crosses
12:00 Asset Purchase Facility, MPC Asset Purchase Facility Votes & Monetary Policy Summary. Markets to watch: GBP Crosses
15:00 Fed Chair Powell Speaks. Markets to watch: USD Crosses