Weekly Market Recap: November 29 – December 03
KEY DEVELOPENTS
Omicron variant was in the spotlight, as the United Sates reported their first case on Wednesday [1], while Moderna's CEO Stéphane Bancel had warned of likely lower vaccine efficacy earlier in the week. [2]
The spread of Omicron had led to a rethink of the heightened expectation around the Fed's tightening path, but this week we saw another barrage of hawkish commentary by central bank officials. Mr Powell was at the forefront, hinting at faster QE conclusion and also calling for a withdrawal of the term "transitory" in regards to inflation during his Senate testimony [3] – comments that were largely repeated a day later in the House of representatives.
The European Central bank on the other hand, continued to beat its dovish drum, with President Lagarde saying it is very unlikely that rates will rise in 2022, in the ReutersNext conference on Friday. [4]
On Thursday OPEC+ stack to its plan to add 0.4 million barrels of oil per day for the month of January 2022, while noting it is ready for adjustments passed on pandemic developments.
Over in Washington, the US Senate passed bill to fund government through February 18 and avert a shutdown. [5]
On the data front, Friday's US Jobs report was the main event, with the US economy adding only 210 jobs in November – in one more disappointing print. Unemployment rate dropped to 4.2%, from October's 4.6%.
Canada's employment figures were much better, with the creation of 153.7K jobs and Unemployment receding to 6%.
MARKET MOVEMENTS
The US Dollar was heading towards another profitable week, as the Fed's hawkish message resonated. NZD and AUD and GBP dropped to new 2021 lows against it, while EUR/USD was having an inconclusive week at the time of writing.
Stock markets in the US were facing difficulties at the time of writing, while GER30 was nearing towards a profitable close.
USOil was trying for profits, while XAU/USD was down.
CORPORATE ACTIVITY
This week had many news around proposed acquisitions, name changes and regulatory scrutiny.
WEEK AHEAD (GMT)
Next week focus will shift to the central banks of Australia (RBA) and Canada (BoC), as the will be handing down their monetary policy decisions, on Tuesday and Wednesday respectively. The RBA is on the dovish side as it still runs an asset purchase program and has pushed back against calls for faster tightening, whereas the bank of Canada concluded its QE in the previous policy meeting.
Market participants will also be looking forward to CPI Inflation figures for the US (Friday) and China (Thursday).
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
| Retrieved 03 Dec 2021 https://www.cdc.gov/media/releases/2021/s1201-omicron-variant.html | |
| Retrieved 03 Dec 2021 https://www.ft.com/content/27def1b9-b9c8-47a5-8e06-72e432e0838f | |
| Retrieved 03 Dec 2021 https://www.c-span.org/video/ | |
| Retrieved 03 Dec 2021 https://twitter.com/Lagarde/status/1466686551786770433 | |
| Retrieved 24 May 2023 https://www.opec.org/opec_web/en/press_room/6736.htm |
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