Weekly Market Recap: November 01-05

The week was packed with important events and central banks were front and center, delivering consequential and market-moving decisions. We also had some key economic releases and quarterly financial results from high profile firms.

KEY DEVELOPMENTS

The Reserve Bank of Australia kept the official cash rate (OCR) at 0.1% on Tuesday and maintained its QE at the rate of $4 billion/week, but discontinued the target for the yield on the April 2024 bond.

The US Federal Reserve announced the long awaited reduction in its asset purchases at a pace of $15 billion/month on Wednesday's, to begin within November. Official's had done a good job to prepare markets for this outcome and turmoil was avoided.

The Bank of England picked up the baton the next day, and by no means was it as delicate as its US counterpart. Amidst aggressive market expectation for a rate hike, partly due to BoE's own commentary, officials voted (7-2) to keep rates at 0.1%, causing the GBP to plunge.

On Friday, focus shifted back to the United States for the Jobs report, which beat estimates with the addition 531K payrolls in October, after two disappointing prints. Unemployment Rate droped further, to 4.6%.

Canada also released its employment statistics for October on the same day, adding 31.2K jobs and missing forecasts.

OPEC+ ignored calls for higher production increases and stuck to its output plan, to add 400K barrels per day in November.

MARKET MOVEMENTS

GBP/USD heads towards a negative week due to the BoE-fueled collapse, registering its worst day of 2021 on Thursday, but avoiding fresh 2021 lows (as of the time of writing).

The Euro was unable to avert that and posted 17 month lows against the greenback, while the US Dollar edges towards a positive close.

US Indices set fresh record highs, as the Fed's dovish taper did not bother them, while GER30 and FRA 40 also clinched all-time highs.

On the Commodities front, USOIL posted its second losing week in a row, whereas XAU/USD was poised for a solid week.

CORPORATE ACTIVITY

Airbnb (ABNB.us) Net Income rose 280% y/y in Q3, making it the most profitable quarter ever.[1]

Uber (UBER.us) posted Q3 Net Loss of $2.4 billion, despite Revenue increase to $4.845 billion. [2]

Lyft (LYFT.us) Revenues rose to $864 million in the third quarter, whereas Net Loss narrowed to $71.539 million.[3]

Lufthansa (LHA.de) returned to profits in Q3 (adjusted EBIT) and Revenues grew nearly 100% y/y to €5.2 billion.[4]

BMW (BMW.de) sold 231,575 fully electric and plug-in hybrid vehicles during the first nine months of 2021, twice as many as one year earlier and Revenue grew 19.2% y/y.[5]

Westpac (WBC.au) reported a 138% y/y rise in Net profit for Full FY 2021 due credit impairment benefit of $590 million.[6]

WEEK AHEAD (GMT)

For the week of November 8-12, the economic calendar appears to be less busy, especially at its begining, although it does heat up down the road.

Market Participants await US CPI Inflation on Wednesday, as concerns around elevated prices persist, while China Producer and Consumer Price indexes are due earlier in the day. On Thursday focus will shift on Australia's Employment figures and UK's Q3 GDP.

Earnings remain in focus, with Adidas (ADS.de), Disney (DIS.us), Tencent Holdings (TENC.us) being just some of the "heavy" names reporting.

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 Nov 2021 https://s26.q4cdn.com/656283129/files/doc_financials/2021/q3/Airbnb_Q3-2021-Shareholder-Letter_Final.pdf

2

Retrieved 05 Nov 2021 https://investor.uber.com/news-events/news/press-release-details/2021/Uber-Announces-Results-for-Third-Quarter-2021/

3

Retrieved 05 Nov 2021 https://s27.q4cdn.com/263799617/files/doc_financials/2021/q3/LYFT-2021.09.30-Press-Release-(Quarterly)-(1).pdf

4

Retrieved 05 Nov 2021 https://investor-relations.lufthansagroup.com/fileadmin/downloads/en/financial-reports/interims-reports/LH-QR-2021-3-e.pdf

5

Retrieved 05 Nov 2021 https://www.bmwgroup.com/content/dam/grpw/websites/bmwgroup_com/ir/downloads/en/2021/q3/PM_BMW_Group_Q3_2021_EN.pdf

6

Retrieved 05 Nov 2021 https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/WBC_FY21_media_release.pdf

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