Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 8 NOVEMBER 2016

• Commodity FX lower as Yen gains, retracing yesterday’s price action
• Quiet consolidation likely across markets before US election outcome
• Clinton/Trump dichotomy to be reflected in risk on/off trade dynamics

The Australian, Canadian and New Zealand Dollars pulled back while the Yen edged cautiously higher in moves that appeared corrective following yesterday’s session. Commodity bloc FX outperformed while the anti-risk Japanese unit plunged as markets cheered after the FBI affirmed that Hillary Clinton did not commit a crime in the handling of emails while serving as Secretary of State.

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DAGELIJKSE MARKT ANALYSE 9 NOVEMBER 2016

• US Dollar gains on commodity FX, drops elsewhere as Trump wins Presidency
• Japanese Yen set to post largest daily gain since Brexit vote amid risk aversion
• Sentiment-linked assets likely to remain under heavy pressure in the near term

The financial markets are reeling as results from the US presidential election point to a victory for Republican nominee Donald Trump. The Associated Press is projecting that that Mr Trump has prevailed in Wisconsin, giving him the 270 electoral votes needed for a win. A separate report from NBC News has it that his rival Hillary Clinton has called him to concede the contest having refused to do so earlier even as the math looked increasingly insurmountable.

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DAGELIJKSE MARKT ANALYSE 10 NOVEMBER 2016

• Crude oil prices mirror risk appetite swings after US election
• Gold prices erase intraday surge on inflation, rates speculation
• Follow-through may be undermined as post-vote dust settles

Crude oil prices did not see as dramatic of a pickup in volatility as many cycle-sensitive assets in the wake of the US presidential election yesterday. Prices dipped and recovered to post gains by the end of the session, mirroring the seesaw in broader risk appetite trends, but the magnitude of back-and-forth moves seemed relatively restrained.

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DAGELIJKSE MARKT ANALYSE 11 NOVEMBER 2016

• Gold prices drop as markets bet Trump heralds steeper rate hikes
• Crude oil prices decline after IEA warns supply glut to continue
• Risk aversion may undermine WTI as gold searches for a lifeline

Gold prices continued to sink as expected as financial markets continued pricing in a steeper Fed rate hike path driven by the inflationary implications of policies expected to be undertaken by President-elect Donald Trump. The metal traded inversely of a rally in benchmark US Treasury bond yields, underscoring the reduced appeal of non-interest-bearing assets in the emerging narrative for the years ahead.

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DAGELIJKSE MARKT ANALYSE 14 NOVEMBER 2016

• US Dollar continues to rise as post-election trends remain in play
• Japanese Yen declines as Nikkei gains, denting anti-risk demand
• Sanguine, hawkish-leaning Fed-speak may add fuel to USD rally

Trends prevailing after Republican nominee Donald Trump unexpectedly won the US presidential election remained in play at the start of the trading week. The markets are betting that the on-coming US policy pivot may boost corporate earnings and stoke inflation. The former conclusion has proven supportive for share prices while the latter fueled speculation of a steeper Fed rate hike trajectory, driving the US Dollar upward.

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DAGELIJKSE MARKT ANALYSE 15 NOVEMBER 2016

• Gold prices digesting losses after dropping to five-month low
• Crude oil prices advance on OPEC push for output cut deal
• US retail sales data, Fed-speak may bode ill for commodities

Gold prices consolidated losses after having touched a five-month low in the aftermath of the US presidential election amid speculation that amid speculation that the on-coming policy pivot will boost inflation and encourage Fed tightening. Crude oil prices bounced amid reports that OPEC nations have re-doubled diplomatic efforts to secure a deal on output cut quotas ahead of a formal meeting later this month. The cartel unveiled the outlines of an accord in September but nailing down specifics has proven to be a challenge, as expected.

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DAGELIJKSE MARKT ANALYSE 16 NOVEMBER 2016

• US Dollar corrected lower in Asia as markets digested 7-day rally
• Comments from Fed officials may continue to boost rate hike bets
• British Pound unlikely to find strong lead in jobless claims report

The US Dollar corrected broadly lower in overnight trade having extended its winning streak for a seventh consecutive day in the prior session. The benchmark currency has been buoyed in the aftermath of the US presidential election amid speculation that the on-coming policy pivot will boost inflation and call for more aggressive Fed tightening. More of the same was on offer yesterday, with prices rising alongside US Treasury bond yields while the 2017 rate hike path priced into Fed Funds futures steepened further.

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DAGELIJKSE MARKT ANALYSE 17 NOVEMBER 2016

• Yen falls Asian stocks rise, BOJ comes up empty in bond-buy operation
• Aussie falls on soft jobs data, NZ Dollar gains on quake relief package
• US Dollar may extend rally if Yellen endorses steeper rate hike outlook

The Japanese Yen underperformed in overnight trade as most Asian stocks advanced, sapping demand for the anti-risk currency. Japan’s benchmark Nikkei 225 stock index gapped down at the trading open but trended higher through the session to finish the day nearly flat, with USD/JPY pacing the advance. Selling pressure may have been compounded after the Bank of Japan attracted no offers in its first fixed-rate bond buying operation.

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DAGELIJKSE MARKT ANALYSE 18 NOVEMBER 2016

- Canada Consumer Price Index (CPI) to Uptick for Second Straight Month.
- Core Rate of Inflation to Hold Steady at Annualized 1.8% for Third Consecutive Month.

Another uptick in Canada’s Consumer Price Index (CPI) along with stickiness in the core rate of inflation may foster a larger pullback in USD/CAD as the Bank of Canada (BoC) ‘expects total CPI inflation to be close to 2 percent from early 2017 onwards.’

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DAGELIJKSE MARKT ANALYSE 21 NOVEMBER 2016

- Rising US yields helping US Dollar as inflation expectations rise on President-elect Trump stimulus hopes; rising European yields due to unease over political situations in Italy and France.
- Fed rate hike odds holding above 95%; ECB rate cut odds still at 0% for December.
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- Seems likely that the ECB will hold its course, make slight alterations to QE program in December.

The Euro continued to drift broadly lower through the middle of November, weighed by the emergence of political risks on both sides of the pond. For the second consecutive week, EUR/USD traded sharply low, closing at 1.0584 for a loss of -2.52%. Of course, the US Dollar is being drive by the Trump reflation trade, which is pushing up both nominal yields and inflation expectations, sending the US-German 2-year yield spread to its widest level in 27-years this past week.

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DAGELIJKSE MARKT ANALYSE 22 NOVEMBER 2016

• Crude oil prices rise most in 7 months on OPEC deal optimism
• Gold prices retrace as markets digest “Trump trade” volatility
• API inventory data, Trump cabinet news in the spotlight ahead

Crude oil prices shot higher following encouraging comments about implementation of an OPEC supply cut accord unveiled in September. Cartel members have struggled to reach agreement on output cut quotas due to be unveiled at a meeting on November 30.

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DAGELIJKSE MARKT ANALYSE 23 NOVEMBER 2016

- U.S. Durable Goods Orders to Rebound 1.7% in October.
- Non-Defense Capital Goods Orders excluding Aircrafts to Increase 0.3%.

A 1.7% rebound in U.S. Durable Goods Orders may heighten the appeal of the greenback and spark a near-term decline in EUR/USD as it puts increased pressure on the Federal Open Market Committee (FOMC) to raise the benchmark interest rate at the last 2016-meeting on December 14.

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DAGELIJKSE MARKT ANALYSE 24 NOVEMBER 2016

• Crude oil prices ignore supportive Iraq comments, EIA inventory data
• Markets may be turning deaf to OPEC jaw-boning as key meeting nears
• Gold prices sink as US durables report drives hawkish Fed outlook shift

Crude oil prices drifted sideways despite seemingly supportive news-flow coming across the wires. First, Iraq’s Prime Minister Haider Al-Abadi said his country will participate in an OPEC production cut deal, reversing previous demands for an exemption. This may help break the deadlock in negotiations on output reduction quotas ahead of a cartel meeting next week that is meant to finalize the scheme’s implementation details. Second, the weekly EIA inventory data set showed a drawdown of 1.26 million barrels, beating forecasts calling for a 289.7k barrel build.

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DAGELIJKSE MARKT ANALYSE 25 NOVEMBER 2016

- EUR/USD has rallied moderately thus far today after steep declines over the past three weeks around the US Presidential election.
- Euro-Zone political risk remains in focus, with a second French Republican party primary taking place this weekend.
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- However, French consumer confidence remained steady at a nine-year high in

November as political concerns have yet to spill over into the broader economy.
EUR/USD is rallying moderately Friday after its steep fall from 1.1026 on November 8, the day of the US Presidential election, to a recent low of 1.0515 just yesterday – a drop of just under 5% in just under three weeks. Now, as attention has started to shift away from the US, EUR/USD finds itself trading at just under 1.0600, despite evolving political risk in Europe that has been one of the major factors undermining the exchange rate in recent days

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DAGELIJKSE MARKT ANALYSE 28 NOVEMBER 2016

• Gold prices attempt recovery after hitting nine-month low
• Crude oil prices drop on fading hope for output cut deal
• Trump cabinet appointments, OPEC commentary in focus

Gold prices are attempting a recovery after touching a nine-month low in Friday’s trade. The move is accompanied by a parallel decline in the US Dollar and US front-end yields as implied in 2-year Treasury futures. This hints at moderation in the Fed rate hike outlook as the catalyst behind the returning appeal of anti-fiat and non-interest-bearing assets, including the yellow metal.

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DAGELIJKSE MARKT ANALYSE 29 NOVEMBER 2016

- U.S. Consumer Confidence to Rebound in November.
- Conference Board Index to Push Above 100-Threshold for Third Time in 2016.

The Conference Board’s U.S. Consumer Confidence survey is expected to rebound to 101.5 from 98.6 in October, and a marked improvement in household sentiment may drag on EUR/USD as it instills an improved outlook for growth and inflation.

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DAGELIJKSE MARKT ANALYSE 30 NOVEMBER 2016

• Yen falls as risk appetite firms, NZ Dollar gains on RBNZ comments
• Aussie Dollar drops as ANZ CEO sounds the alarm about economy
• US Dollar may rise on data but OPEC, cabinet news cloud outlook

The Yen underperformed as Japan’s Nikkei 225 stock index advanced, sapping demand for the anti-risk currency. The New Zealand Dollar advanced alongside S&P 500 futures, hinting at firming risk appetite as the driver behind gains. Encouraging comments from RBNZ officials may have also helped after Governor Wheeler and Deputy Governor Spencer seemed to talk down near-term rate cut chances.

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DAGELIJKSE MARKT ANALYSE 1 DECEMBER 2016

• Gold prices drop on OPEC, Mnuchin appointment, ADP data
• Crude oil prices soar as last-minute output cut deal emerges
• Upbeat ISM survey data may boost Fed rate hike bets further

Gold prices faced renewed selling pressure as Fed rate hike bets firmed anew, driving the US Dollar higher alongside front-end US bond yields. This undermined demand for anti-fiat and non-interest-bearing assets. The move seemed to owe to the return of the so-called “Trump trade”, an OPEC output cut deal and upbeat US data in equal measure.

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DAGELIJKSE MARKT ANALYSE 2 DECEMBER 2016

- U.S. Non-Farm Payrolls to Increase Less Than 200K for Fourth Consecutive Month.
- Unemployment Rate to Hold at Annualized 4.9% for Second Month.

A 180K rise in U.S. Non-Farm Payrolls (NFP) may fuel the bullish sentiment surrounding the greenback and trigger a pullback in EUR/USD should the report put increased pressure on the Federal Reserve to further normalize monetary policy.

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DAGELIJKSE MARKT ANALYSE 5 DECEMBER 2016

• Gold prices erase gains as selloff resumes as markets weigh Italy vote
• Crude oil prices rise with stocks in market-wide risk appetiterecovery
• US ISM data may cap WTI rally as US Dollar gains on Fed outlook

Gold prices spiked higher after the outcome of Italy’s constitutional referendum sent jitters across financial markets. Intraday gains have evaporated however as investors rethink the vote’s implications (as expected), putting the metal back on the defensive.

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