World News

Last week, market participants digested the aftermath of a hawkish Fed meeting as they signalled a sooner than expected end to their ultra-loose monetary policy. This sent stocks plummeting with the Dow putting in its worst weekly loss since October. On the other hand, the greenback surged and was amongst the top performers for the week with the DXY gaining close to 2% and moving to highs last seen in April. Risk assets took a beating following the risk event with antipodeans suffering the most. NZD/USD broke to lows from November whilst AUDUSD collapsed through 0.7500. The new policy stance for the FED reverberated across markets as Gold suffered its worst weekly loss since March with the commodity shedding over 6% over the course of the week. Going into the week ahead, financiers await the decisions from the 4^th major central bank meeting in the past fortnight as the BOE take centre stage on Thursday.

Markets in Asia started the week off quietly as a result of some markets being absent in observance of public holidays. The Nikkei 225 moved above the 29,000-level following on from outperformance amongst Japanese exporters whilst USD/JPY also traded higher on the back of last week’s events. Market participants digested comments from the G7 meetings where leaders professed their unity with the ‘Build Back Better’ initiative.

UK Focus

In the UK, PM Johnson plans to address the nation after the government approved a four-week delay to the removal of the lockdown measures that were scheduled for the 21^st of the month. Another review will be carried out in two weeks though is likely to be data dependent. This comes as the nation continues to experience a surge in variant cases despite a strong inoculation drive which has seen over 60mln receive at least one dose. Cable continued to trade rangebound last week with focus also on tension developing with Northern Ireland.

World News

Markets in Asia were mixed as participants continued to digest the aftermath of last week’s US jobs data which failed to meet expectations. Financiers were looking for an additional 645,000 jobs to have been added in the past month though a lower figure of 559K sent US yields lower as expectations for maintaining the current FED policy grew. The Dollar index which broke to new weekly highs following the strong ADP report earlier in the week pulled back and settled just above the 90 handle. Going into the week ahead, investors will have their eyes on the monthly CPI data which could provide further guidance on the current state of the economy.

Last week the RBA maintained their cash rate at 0.10% as expected while also keeping parameters of the QE program unchanged. The Central bank reiterated its commitment to maintaining highly supportive monetary conditions until full employment has been achieved whilst also noting that though the economic recovery has been stronger than expectations, a presence of uncertainty still remains should a resurgence in virus outbreaks persist.

World News

Markets in Asia began the week mildly positive following on from last weeks mixed performance on Wall Street as market participants look towards month end. Last week saw the greenback rebound after the somewhat dull mood on Friday where a number of Fed speakers took centre stage once again. Fed’s Barkin outlined that the Fed will taper when substantial progress has been made whilst Kaplan and Harker also reiterated that conversations surrounding tapering should begin sooner rather than later. This follows on from the somewhat hawkish FOMC minutes release where a number of participants suggested that if the economy continued to make rapid progress towards the committee’s goals then talk on adjusting the pace of asset purchases will begin. The continued discussion on inflation and tapering continues to be the overarching theme for investors and financiers as they look towards a week where economic data is sparse.