Daily Market Bulletin – 18 January 2022

Market Developments

Markets appeared on edge as they monitor rising US Yields, along with Middle East tensions, as the Associated Press reported a drone attack in Abu Dhabi overnight. [1]

Bank of Japan (BoJ) maintained interest rates and asset purchases unchanged, but upgraded its forecasts for Inflation- still does not see 2% being reached in the forecasted period (fiscal 2023).

It now projects y/y median CPI of +1.1% for fiscal 2022, compared to 0.9% in the October projections. [2]

President of the People's Republic of China, Xi Jinping, addressed The Davos Agenda and warned against monetary tightening, saying that "If major economies slam on the brakes or take a U-turn in their monetary policies, there would be serious negative spillovers. They would present challenges to global economic and financial stability, and developing countries would bear the brunt of it." [3]

Trade the News: View our Economic Calendar

The remarks came after the country's central bank (PBOC) had reduced interest rates on one-year loans and seven-day reverse repos.

Car registrations slumped 22.8% in December in the European Union, according to data released today by the European Automobile Manufacturers' Association (ACEA), so we will be looking to see how automakers will react. [4]

UK December jobless claims change -43.3k vs -49.8k prior, while average weekly earnings rose 4.2% 3m/y in November, easing from prior 4.9% .

Main Asia-Pacific stock markets were mostly down and European futures follow suit.

The US Dollar remains upbeat, the JPY Basket is soft and Antipodeans (AUD, NZD) drop against the greenback.

Instruments Snapshot

EUR/USD is soft, breaching 1.1400 again.

GBP/USD is subdued, but finds support below 1.3650.

USD/JPY extends yesterday's rebound, testing 115.00.

USD/CAD is mixed marginally above 1.2500, as USD demand is counterweighed by higher Oil prices.

AUD/USD extends losses and give 0.7300 up.

NZD/USD is also downbeat, moving below 0.6800.

GER30 is on the back foot and concedes 15,900.

US30 retreats and tests 35,800.

USOIL rises to the highest level since October 2014, testing 85.50, amidst Middle East tensions.

XAU/USD slides and breaks below 1,815.

Economic Calendar Picks (GMT)

Market participants await Eurozone and Germany ZEW Economic Sentiment (10:00), US API Oil Stockpiles (21:30) and OPEC's monthly Oil Report.

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 18 Jan 2022 https://apnews.com/article/business-dubai-united-arab-emirates-abu-dhabi-yemen-8bdefdf900ce46a6fd6c7bc685bf838a

2

Retrieved 18 Jan 2022 https://www.boj.or.jp/en/mopo/outlook/gor2201a.pdf

3

Retrieved 18 Jan 2022 https://www.weforum.org/agenda/2022/01/address-chinese-president-xi-jinping-2022-world-economic-forum-virtual-session/

4

Retrieved 19 May 2022 https://www.acea.auto/pc-registrations/passenger-car-registrations-2-4-in-2021-22-8-in-december/

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