America’s Roundup: Dollar dips on rising risk aversion ,Wall Street ends lower, Gold gains, Oil prices fall further away from 7-year highs-January 22nd ,2022

Posted at 22 January 2022 / Categories Market Roundups

Market Roundup

•Canada Dec New Housing Price Index (MoM)  0.2% ,1.0% forecast, 0.8% previous

• Canada Nov Retail Sales (MoM) 0.7%, 1.2% forecast, 1.6% previous

• Canada Nov Core Retail Sales (MoM) 1.1%, 1.3% forecast, 1.3% previous

• US Dec Leading Index (MoM)  0.8% ,0.8% forecast, 1.1% previous

•US. Baker Hughes Oil Rig Count 491,481 previous

•US U.S. Baker Hughes Total Rig Count 604 , 601 previous

Looking Ahead - Economic Data (GMT) 

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Looking Ahead - Economic events and other releases (GMT)

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EUR/USD: The euro edged higher on Friday  as mixed signals from the European Central Bank, while mounting geopolitical worries over Ukraine and a fall in equity markets boosted demand for euro. ECB president Christine Lagarde reiterated on Thursday that the central bank did not need to act as boldly as the Federal Reserve because of a different economic situation, warning against premature hikes risk. The dollar index, which tracks the greenback against major peers, was down 0.1% on the day at 95.650. The euro was up 0.3% against the dollar at $1.1311. Immediate resistance can be seen at 1.1347 (5DMA), an upside break can trigger rise towards 1.1371(23.6%fib).On the downside, immediate support is seen at 1.13332 (38.2%fib), a break below could take the pair towards  1.1300 (50% fib).

GBP/USD: The pound weakened broadly on Friday    as weakness in Wall Street prompted investors to take profits after a rally this week. Traders have pushed the pound higher on expectations the Bank of England will raise interest rates as early as next month to combat soaring inflation. Money markets currently price in more than 100 basis points (bps) in interest rate rises in 2022 and an 87% chance of a 25 bps increase in February, after data showed on Wednesday that UK inflation rose faster than expected. Against a broadly sturdy U.S. dollar, the pound weakened 0.25% at $1.3585, its lowest levels in more than a week.   Immediate resistance can be seen at 1.3610(5DMA), an upside break can trigger rise towards 1.3679(23.6%fib).On the downside, immediate support is seen at 1.3551 (50%fib), a break below could take the pair towards 1.3494 (61.8%fib).

USD/CAD: The Canadian dollar weakened to a one-week low against its U.S. counterpart on Friday , as disappointing corporate earnings weighed on investor sentiment and domestic data showed retail sales rose less-than-expected in November. Wall Street's main indexes dropped as Netflix shares plunged after a weak earnings report that also weighed on rivals, putting stocks on course to close out a gloomy week on a sour note.The price of oil, one of Canada's major exports, was pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after the global benchmarks touched seven-year highs this week. The loonie was trading 0.5% lower at 1.2565 to the greenback. Immediate resistance can be seen at 1.3445 (Higher BB), an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3382 (5 DMA), a break below could take the pair towards 1.3346 (11 DMA).

USD/JPY: The dollar declined against the Japanese yen on Friday as  investors looked ahead to next week's Federal Reserve meeting for more clarity on the outlook for rate hikes. Expectations that the Fed will tighten monetary policy at a faster pace than previously anticipated had driven a rise in yields and the dollar earlier this week, and the U.S. dollar index was set for biggest weekly percentage gain since mid-December. Markets are pricing in as many as four rate hikes this year, starting from March and expect the Fed to start trimming its $8 trillion-plus balance sheet within months. Next week's Fed meeting could shed some light on how fast it will tighten. Against the yen, the dollar was last down 0.4% at 113.67 . For the week, the dollar was down about 0.5% against the yen. Strong resistance can be seen at 114.14 (38.2% fib), an upside break can trigger rise towards 114.03 (5DMA).On the downside, immediate support is seen at 113.63 (50%fib), a break below could take the pair towards 113.15 (61.8%fib).

Equities Recap                               

European stocks slumped on Friday to mark a third week of losses as jitters over monetary policy tightening by central banks this year and weak economic data sparked steep declines across global equities.

UK's benchmark FTSE 100 closed down by  1.20 percent, Germany's Dax ended down by 1.94 percent, France’s CAC finished the day down by 1.75 percent.                

Risk aversion dominated markets on Friday as stocks slumped on Wall Street, oil prices fell from seven-year highs earlier in the week and bond prices surged with traders scurrying for the relative safety of government debt.

Dow Jones closed down  by  1.30% percent, S&P 500 closed down by 1.89% percent, Nasdaq settled down  by 2.72%      percent.

Treasuries Recap

U.S. Treasury yields fell on Friday as stock market declines reflected poor risk appetite and as concerns about potential conflict in Ukraine increased demand for the safe haven debt..

Benchmark 10-year note   yields were last at 1.746%, after earlier getting as low as 1.733%. They are down from 1.902% on Wednesday, which was the highest since Jan. 2020.

Commodities Recap

Gold was set to gain for a second week as inflation and geopolitical risks lifted its safe-haven appeal but it slipped on Friday amid a broader decline in commodities, while palladium was on course for its best week since November 2020.

Spot gold was down 0.4% at $1,831.60 per ounce as of 13:43 ET (1843 GMT). U.S. gold futures settled down 0.6% at $1,831.80.

Oil prices slid for a second day in a row on Friday, pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after the benchmarks touched seven-year highs earlier in the week.

Brent futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 41 cents, or 0.5%, to settle at $85.14.

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