Daily Market Bulletin – 05 January 2022

Market Developments

Investors appeared cautious as the tech sector took a hit from higher US Yields and fines on units of Alibaba Group Holding Ltd, Tencent Holdings Ltd and Bilibili Inc, by China's State Administration for Market Regulation (SAMR), as reported by Reuters. [1]

Omicron continues to spread, with the UK PM Johnson acknowledging on Tuesday increasing Covid-19 pressure on hospitals, but resisting any stricter lockdowns. [2]

OPEC+ reconfirmed its production adjustment plan yesterday, agreeing to add another 400,000 barrels per day in February. The next ministerial meeting will take place on February 2. [3]

Main Asia-Pacific stock markets were mostly downbeat, European futures appear cautious and US 10YR Yields ease.

The US Dollar consolidates, the JPY Basket strengthens and main Commodity Currencies (AUD, NZD, CAD) are soft against both.

Instruments Snapshot

EUR/USD rebounds after its two-day slump and tries to retake 1.1300.

Trade the News: View our Economic Calendar

GBP/USD shows indecision after Monday's advance, capped by 1.3550.

USD/JPY probes 116.00 on the downside, ending the five-day profitable streak that led to five year highs yesterday (116.35).

USD/CAD is supported above 1.2700, following Tuesday's slide.

AUD/USD returns to negative territory, having rejected 0.7250 during yesterday's rise.

NZD/USD is on the back foot, testing 0.6800.

GER30 trades with caution around 16,100.

US30 retreats below 36,800, after Tuesday's record highs (36,951).

USOIL is subdued around $77/barrel.

XAU/USD is cautious below 1,815.

Economic Calendar Picks (GMT)

Investors await minutes from the Fed's December monetary policy meeting, for more insight into the officials' thinking. Back then, the bank had announced the acceleration of its QE tapering and the dot-plot had shown three hikes in 2022.

Other than that, we expect a series of PMIs, US ADP Employment and EIA Oil Stockpiles.

See the economic calendar here.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 05 Jan 2022 https://www.reuters.com/article/china-regulation-deals-idCNL1N2TL07F

2

Retrieved 05 Jan 2022 https://www.gov.uk/government/speeches/prime-ministers-address-to-the-nation-4-january-2021

3

Retrieved 26 May 2022 https://www.opec.org/opec_web/en/press_room/6766.htm

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