Daily Market Bulletin – 13 January 2022

Market Developments

After two days of market-moving events, not much is going on today, with investors seemingly on a reserved mood.

Yesterday's data showed that US Headline CPI Inflation surged 7% y/y in December, which was the highest since 1982, but markets were cool with it.

On Wednesday, Mr Powell was timid regarding the Fed's tightening path, but overnight mr Bullard made new hawkish remarks on Wall Street Journal, saying that four interest rate hikes in 2022 now appear likely. [1]

In her prepared remarks ahead of today's testimony, Ms Lael Brainard acknowledged that "inflation is too high" and said that the bank's most important goal task "getting inflation back down to 2 percent while sustaining a recovery that includes everyone". [2]

Australian airliner Qantas said today that it expects domestic capacity for the third quarter of FY22 to be at around 70 per cent of pre-COVID levels, down from the 102 per cent that had been planned. The Group's total international capacity for the same period will fall from 30 per cent to around 20 per cent of pre-COVID levels. [3]. QAN.au dropped more than 2% today.

Main Asia-Pacific stock markets were mostly downbeat and European futures are tepid.

In the FX space we see mostly indecision, with he US Dollar subdued after its two-day slump and the JPY Basket is also inconclusive.

Instruments Snapshot

EUR/USD steadies just shy off yesterday's two-month highs (1.1453).

GBP/USD extends its gains above 1.3700, to the highest levels since late-October.

USD/JPY is subdued but defends 115.50.

USD/CAD is soft and retests 1.2500.

AUD/USD shows indecision ahead of 0.7300, following its two-day surge.

NZD/USD trades with positive undertone above 0.6850.

GER30 is subdued around 16,000.

US30 moves to negative territory, threatening 36,200.

USOIL is soft below Wednesday's two-month high (83.11).

XAU/USD is on the back foot and concedes 1,825, pausing its four-day rise.

Economic Calendar Picks (GMT)

The United States remains in the spotlight, with Jobless Claims and Producer Price Index (13:30).

Ms Brainard appears in the Senate today, for her nomination hearing as Fed Vice-Chair (15:00).

Delta Airlines (DAL.us) releases its Q4 financial results today, before Wall Street opens and before the banking sector takes over on Friday, as the earnings season gets underway.

Overnight, focus will shift to China's Trade Balance (02:00).

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 13 Jan 2022 https://www.wsj.com/articles/fed-s-bullard-four-interest-rate-rises-in-2022-now-appear-likely-11642017785

2

Retrieved 13 Jan 2022 https://www.federalreserve.gov/newsevents/testimony/brainard20220113a.htm

3

Retrieved 26 May 2022 https://www.qantasnewsroom.com.au/media-releases/qantas-and-jetstar-adjust-third-quarter-capacity-settings/

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