Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 6 DECEMBER 2016

• Crude oil prices struggling at chart barrier after OPEC rally
• Gold prices may recover amid lull in Fed-linked news flow
• API inventory data, UK Brexit appeal headline key event risk

Crude oil prices corrected lower as markets digested last week’s gains in the wake of a last-minute OPEC output cut accord. Non-OPEC producers with meet with members of the cartel in Vienna on December 10 to discuss cooperation with the scheme. In the meantime, traders may turn to more mundane matters, with the API estimate of weekly inventory flows on tap today.

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DAGELIJKSE MARKT ANALYSE 7 DECEMBER 2016

• Gold prices may rebound amid profit-taking before FOMC meeting
• Crude oil prices drop as EIA hints US output may offset OPEC cut
• DOE expected to report crude inventories fell for 3rd straight week

Gold prices have been left rudderless absent news flow driving Fed monetary policy speculation. After a month of digesting the US presidential election and pricing in a hike at next week’s FOMC meeting, the lull could open the door for a bounce. This may be driven by profit-taking on shorts as traders ponder the possibility that officials’ updated 2017 projections will fall short of the steeper tightening path envisioned by the markets.

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DAGELIJKSE MARKT ANALYSE 8 DECEMBER 2016

• ECB expected to extend QE program, broaden eligible assets
• Euro may rise if ECB inflation outlook puts target within sight
• NZ Dollar up as RBNZ’s Wheeler signals end of rate cut cycle

All eyes are on the ECB monetary policy announcement in European trading hours. Inflation has firmed since the central bank introduced its QE effort in early 2015 – hitting the highest level in nearly three years at 0.6 percent last month – but remains well below policymakers’ target of near 2 percent. That has stoked expectations that it will be extended beyond its expiry in March.

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DAGELIJKSE MARKT ANALYSE 9 DECEMBER 2016

- U. of Michigan Confidence to Increase for Second Straight Month in December.
- 12-Month Inflation Expectations Have Held at Annualized 2.4% for Last Three-Consecutive Months.

Survey may fuel the bullish sentiment surrounding the greenback and spark further loss in EUR/USD should the data print highlight an improved outlook for the U.S. economy.

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DAGELIJKSE MARKT ANALYSE 12 DECEMBER 2016

- ECB rate decision, despite talks of ‘tapering,’ was actually another steeper into the realm of easy monetary policy, which should hurt the Euro in the current rising rate environment.

- Markets have already priced-in a Fed rate hike on Wednesday; the debate is over how hawkish the Fed will be in its guidance.

EUR/USD had a volatile few days last week, trading as low as 1.0505 on Monday in Asia, before climbing as high as 1.0873 on Thursday in New York. Ultimately, though, with the European Central Bank’s surprise decision to open the liquidity spigot even further, the Euro shed ground across several major currencies; EUR/USD closed the week at 1.0554.

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DAGELIJKSE MARKT ANALYSE 13 DECEMBER 2016

• Gold prices eke out slight gain after dipping to 9-month low
• Crude oil prices appear to secure bullish break from range
• FOMC pre-positioning, API inventory data in focus ahead

Gold prices erased an intraday dip to nine-month lows to post a small gain at the start of the trading week. The recovery played out as the US Dollar dipped downward alongside Treasury bond yields and the priced-in 2017 rate hike path implied in Fed Funds futures moderated.

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DAGELIJKSE MARKT ANALYSE 14 DECEMBER 2016

• US Dollar pulled back overnight ahead of Fed rate decision
• FOMC forecasts and commentary likely to stick to status quo
• Announcement passing may set off unwind of long-USD bets

The US Dollar underperformed in overnight trade, pulling back from a perch near 13-year highs. The move probably reflected investors scaling back exposure ahead of the upcoming Federal Reserve monetary policy announcement. The rate-setting FOMC committee is widely expected to issue the year’s first and only increase in the target Fed Funds rate.

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DAGELIJKSE MARKT ANALYSE 15 DECEMBER 2016

• Yen slumps as global bond yields soar following FOMC rate decision
• New Zealand Dollar hurt as yield advantage shrinks, Aussie holds up
• Upbeat CPI may add fuel to US Dollar rally as Pound ignores BOE

The JapaneseYen underperformed as Asian bond yields followed US Treasury rates higher following the Federal Reserve monetary policy announcement. The FOMC said it now expects to raise the benchmark lending rate three times next year, up from a pair of hikes projected in September.

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DAGELIJKSE MARKT ANALYSE 16 DECEMBER 2016

• Euro corrects upward after lagging in the FOMC aftermath
• Aussie, NZ Dollars fall as China bigwigs ponder 2017 policy
• US Dollar may pull back as markets rethink Fed policy bets

The Euro outperformed in overnight trade, correcting broadly higher having fared the worst among the majors amid Fed-inspired volatility. The Yen remained under pressure after hitting a 10-month low yesterday as Japan’s benchmark Nikkei 225 stock index moved higher, sapping demand for the anti-risk currency.

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DAGELIJKSE MARKT ANALYSE 19 DECEMBER 2016

• Crude oil prices erase post-FOMC fall as OPEC returns to focus
• Gold prices attempt to recover after tumbling to a ten-month low
• Year-end capital flows may encourage reversal of recent moves

Crude oil prices bounced after the planned re-start of production at key Libyan facilities faltered. OPEC may be returning into focus as well after Kuwait began implementing the cartel’s output cut scheme and Russian Energy Minister Alexander Novak said his country’s top producers have all agreed to cooperate with the accord. The WTI benchmark has now retraced all of the losses sustained courtesy of a surging US Dollar following last week’s FOMC monetary policy announcement.

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DAGELIJKSE MARKT ANALYSE 20 DECEMBER 2016

• British Pound at risk as panel questions PM May on Brexit strategy
• Japanese Yen gains as Bank of Japan keeps status-quo policy stance
• US Dollar gains, Kiwi underperforms on hawkish Yellen comments

Brexit jitters may take center stage in otherwise quiet European trade as UK Prime Minister Theresa May is questioned by the House of Commons Liaison Committee on her plans for departure from the European Union. The issue of access to the EU single market has always been a touchy subject with investors. It may prove to be even more so this time around after Scotland’s First Minister Nicola Sturgeon threatened to hold another independence referendum in the event of a “hard Brexit” scenario. A vague position on this front seems likely to weigh on the British Pound.

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DAGELIJKSE MARKT ANALYSE 21 DECEMBER 2016

• Crude oil prices soars as API data amplifies OPEC news-flow
• Gold prices left range-bound despite hawkish Yellen comments
• EIA oil inventories data, year-end flows in the spotlight ahead

Crude oil posted the largest daily increase in three weeks after API inventory data amplified supportive OPEC news-flow. The report pointed to a drawdown of 4.15 million barrels last week. The official EIA report set to cross the wires in the coming hours is expected to show a more modest 2.43 million barrel drawdown. An upside surprise echoing the API assessment may offer prices a further upside nudge.

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DAGELIJKSE MARKT ANALYSE 22 DECEMBER 2016

- Economic expansion expected to proceed at a moderate pace.
- Headline inflation seen topping 1% in early 2017 on energy prices.

The latest ECB Economic Bulletin, following on from the European Central Bank’s December 8 policy meeting, highlights the reasons behind the Governing Council’s decision to extend the quantitative easing program to the end of 2017. While inflation seems likely to pick-up early next year, growth is seen struggling in 2017 despite the ultra-loose monetary backdrop.

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DAGELIJKSE MARKT ANALYSE 23 DECEMBER 2016

• Gold prices oscillate in a familiar range above $1100/oz
• Crude oil prices dither after showing bearish chart setup
• Holiday liquidity drain may boost kneejerk volatility risk

Crude oil and gold prices made little headway despite an economic calendar loaded with US event risk as markets would down ahead of the holiday weekend. The centrality of a still-uncertain fiscal policy outlook for shaping Fed rate hike bets probably played a role as well.

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DAGELIJKSE MARKT ANALYSE 3 JANUARI 2017

• US Dollar corrects broadly lower as liquidity rebuilds after holidays
• Aussie Dollar outperforms on upbeat China PMI, NZ Dollar follows
• Euro may look past German inflation uptick, US ISM survey in focus

The US Dollar corrected lower overnight having traded broadly higher against its major counterparts in yesterday. The Australian and New Zealand Dollars proved best-supported, which may reflect the two currencies’ allure as the highest yielders in the G10 FX space. This makes them natural alternatives to the greenback when an adverse shift in the Fed rate hike outlook undermines the US unit.

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DAGELIJKSE MARKT ANALYSE 4 JANUARI 2017

• Cautious tone in December FOMC minutes may weigh on US Dollar
• Limited ECB impact likely to see Euro overlook flash Eurozone CPI
• Yen down as Nikkei soars, Aussie Dollar gains alongside local yields

The preliminary set of December’s Eurozone CPI figures headlines an otherwise lackluster European economic data docket. The headline year-on-year inflation rate is expected to hit 1 percent, the highest since September 2013. As with yesterday’s analogous release from Germany however, the outcome may not do much for the Euro considering its limited implications for the direction of ECB monetary policy after the central bank committed to on-going QE through 2017.

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DAGELIJKSE MARKT ANALYSE 5 JANUARI 2017

• Crude oil prices rise, correcting after yesterday’s selloff
• Gold prices gain as FOMC minutes dent rate hike outlook
• ISM and ADP may see gold rise further as EIA boosts oil

Crude oil prices turned higher in a move that seemed corrective after yesterday’s sharp selloff. API data showing inventories fell 7.43 million barrels last week probably didn’t hurt either, but much of the day’s advance had already occurred by the time the release crossed the wires.

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DAGELIJKSE MARKT ANALYSE 6 JANUARI 2017

- U.S. Non-Farm Payrolls to Increase Less Than 200K for Third Consecutive Month.
- Unemployment Rate to Rebound to Annualized 4.7%, Average Hourly Earnings to Expand 2.8%.

Trading the News: U.S. Non-Farm Payrolls (NFP)
A 175K rise in U.S. Non-Farm Payrolls (NFP) may boost the appeal of the greenback and undermine the near-term recovery in EUR/USD as it puts increased pressure on the Federal Open Market Committee (FOMC) to further normalize monetary policy in 2017.

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DAGELIJKSE MARKT ANALYSE 9 JANUARI 2017

• British Pound slumps as UK PM May revives “hard Brexit” fears
• Australian Dollar follows local shares higher amid risk-on trade
• Cautious Fed-speak may cool rate hike bets, weigh on US Dollar

The British Pound is underperforming in otherwise quiet trade at the start of the trading week, roiled by comments from UK Prime Minister Theresa May over the weekend. May rekindled worries about a “hard” Brexit – wherein the UK would lose access to the EU single market – in an interview with Sky TV. She said her priority is to negotiate the best possible UK/EU trade deal while remaining firmly outside the regional bloc rather than find ways to keep bits of membership intact.

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DAGELIJKSE MARKT ANALYSE 10 JANUARI 2017

• Euro, Franc capitalize as Pound struggles to shake off “hard Brexit” fears
• Kiwi Dollar suffers as US bond yields bounce after yesterday’s down swing
• Confirmation hearings for Trump cabinet nominees present headline risk

The British Pound continued to trade lower overnight in a move that appeared to reflect follow-on momentum after UK Prime Minister Theresa May rekindled “hard Brexit” worries yesterday. The Euro and the Swiss Franc traded higher, seemingly buoyed as the go-to regional alternatives to the UK unit.

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