Análisis de mercado diario

There is much to keep us occupied (and up at night!) in markets at the moment. Geopolitical tensions between Russia and Ukraine are coming to a decisive point. Commodities are bid with oil prices at multi-year highs. Bond yields are a keen focus of many market observers as the widely followed US 10-year Treasury yield climbed above 1.90% before moderating. Wall Street continued lower overnight, but US stock futures are in the green and Asian markets have broken a five-day slide, helped by a mortgage rate cut in China.

This rate move mirrors the policy cut earlier in the week. Most importantly, these actions show that the authorities are being proactive to support economic growth and comes along with news stories that Chinese regulators are considering measures to support struggling real estate developers.

Mixed bag in stock markets

Yesterday saw the US stock markets take out key support levels as the rotation between sectors continued. The tech-laden Nasdaq entered correction territory having fallen over 10% from a November high.

The S&P 500 is down around 5% this year and broke below the 100-day simple moving average that has provided support for the index over the past sixteen months.

Key levels on the S&P500 include the September 2021 high at 4552 and the recent December low when prices fell to 4496. The daily RSI is not oversold currently though futures markets are pointing to markets trying to gain a foothold above September support.

Oil and commodities continue higher

Oil markets rose to yet another high in seven years though has eased slightly, after the International Energy Agency (IEA) said oil demand is on track to hit pre-pandemic levels. Industrial metals have also been rallying recently, aided by China’s pledge for more support and dollar weakness. Nickel is up more than 11% so far this year.

Commodities are regarded by some as a hedge against inflationary pressures and the current multi-decade highs seen in CPI data across the globe is certainly helping to fuel the rally. Supply chain bottlenecks have also done little to improve supply and demand dislocations.

Gold breaks out above key resistance

The shiny metal has risen to its highest level in two months as some investors bought in to hedge against higher inflation. Gold has been fairly rangebound recently caught between the rising dollar and surging real yields.

Yesterday’s breakout above the resistance area around the July and September 2021 highs at $1834 could see bugs push on the November top at $1877. As wages and energy prices continue to climb, increased stock market volatility and geopolitical concerns all support the potential for higher prices.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Here are the key economic events and data releases to look out for this week:

Monday, January 17

• CNH: China 4Q GDP, December industrial production and retail sales
• US markets closed for Martin Luther King Jr. holiday

Tuesday, January 18

• JPY: Bank of Japan decision
• EUR: Germany ZEW survey expectations
• GBP: UK November jobless claims, December unemployment
• Goldman Sachs Q4 earnings

Wednesday, January 19

• EUR: Germany December inflation
• GBP: UK December inflation
• GBP: Bank of England Governor Andrew Bailey speech
• Bank of America Q4 earnings
• Morgan Stanley Q4 earnings

Thursday, January 20

• CNY: PBOC loan prime rate decision
• JPY: Japan December external trade
• AUD: Australia December unemployment
• EUR: European Central Bank publishes Dec meeting account
• USD: US weekly initial jobless claims
• US crude oil: EIA inventory report
• Netflix Q4 earnings

Friday, January 21

• JPY: Japan December inflation
• GBP: BOE policy maker Catherine Mann speech, UK December retail sales
• EUR: Eurozone January consumer confidence

The potential for the removal of the liquidity punchbowl (aka monetary policy tightening) is dominating the market’s thinking at present.

The strong US CPI report released last week added more pressure on the US Federal Reserve to stat lifting rates earlier than once thought, potentially as soon as March. We’ve had numerous FOMC members recently marking a more hawkish bias to the committee’s views, including notably, the fabled dove Brainard in her Fed chair nomination appearance before the Senate.

Another Fed official, Waller, also mentioned the chance of five rates hikes this year, although he doesn’t favour a 50bp hike in March. It’s worth remembering that it is a US holiday on Monday, so their markets are closed, and the blackout period has started before the next Fed meeting on 26 January so there won’t be any more Committee members to listen out for on the wires.

Company earnings also continue with more bulge bracket US banks releasing their fourth quarter results. US stocks notched their second straight weekly decline, pushed lower by disappointing earnings from financial industry bellwether JPMorgan Chase which has clouded an already mixed outlook for the US economy.

Asian policymakers in focus

We kick off the week with Chinese fourth quarter GDP (4% y/y vs. 3.3% est.), as well as December's industrial production (4.3% vs. 3.7% est.) and retail sales (1.7% vs. 3.8% est.). The full-year GDP came in at 8.1%, slightly above the median estimate by economists but well above the government's 2021 target of over 6%. Still, the data confirmed that the final quarter was losing momentum but the real test for the domestic economy will come in the first quarter of this year, due to current regional lockdowns on top of the ongoing woes in the property sector.

With this in mind, the PBoC lowered both the one-year medium-term lending facility rate abd the seven-day reverse repurchase rate by 10 basis points respectively, a move not seen in nearly two years, and also injected more liquidity into the financial system via US$110 billion in loans.

The Bank of Japan meeting on Tuesday is also getting some airtime after “sources” said it is thinking of a rate hike at some point beyond this year and debating how to manage the messaging. Inflation is picking up and possibly risks to prices may now be described as “balanced” but hitting the 2% inflation target is still a long way off.

UK data to add pressure to the BoE

We get the usual mid-month data dump in the UK with signals about labour market strength, the pace of consumer price inflation and retail sales. These are the last official updates before the BoE meeting on 3 February, with CPI expected to rise above the forecast 5% going forward and a labour marker remaining tight.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

After the fireworks of last week, when several major central banks finally acknowledged the threat posed by high inflation amid the Omicron variant, the next few days have less significant calendar risk.

Monday

• NZD: New Zealand November external trade, Q4 consumer confidence
• CNH: China loan prime rates

Tuesday:

• AUD: RBA minutes and weekly consumer confidence
• EUR: Eurozone December consumer confidence
• CAD: Canada October retail sales

Wednesday:

• NZD: New Zealand December consumer confidence
• GBP: UK 3Q GDP (final)
• US crude: EIA weekly US crude oil inventory report
• USD: US 3Q GDP and December consumer confidence

Thursday:

• JPY: Bank of Japan Governor Haruhiko Kuroda speaks
• USD: US initial weekly jobless claims, November personal income and spending, November PCE deflator and December consumer sentiment

Friday:

• US markets closed, European stock markets half-day

But in the wind down to the festive period, liquidity will start to thin which means we could see more whipsaw market price action.

We are now entering a world of tighter monetary policy, with the world’s most important central bank indicating that interest rates may need to rise three times next year if inflation proves persistent. The clarity offered by the Fed soothed traders’ nerves but there remains major uncertainty and this has caused strong rotation in stock markets.

Growth sectors like technology and consumers stocks have lagged, while small-cap and value stocks have both entered correction territory over the past four weeks. A major US investment bank has noted that the average US stock is down 28% from its highs, even as the benchmark indices are up 20% or more for the year. This is unprecedented and it will be instructive to see if this continues.

US data to inform on price pressures

Thursday will see a US data dump with personal income and spending numbers along with the core PCE index. This is the Fed’s preferred measure of inflation and may hit its highest level since the 1980s, ticking up to 4.5% y/y from 4.1% in October. Some economists see the index getting worse through the winter before falling back through next year as the demand for goods moderate with the peak stay-at-home and stimulus effects fading.

Durable goods orders, new home sales and the final reading of the Michigan consumer sentiment are also released. The former points to a very good outlook for capex in the first half of next year. The dollar closed last week strongly and looks like it will challenge the year-to-date high from November at 96.93 on the widely watched DXY Index.

PBoC meets amid mounting headwinds

The central bank has already been proactive in increasing liquidity in recent weeks with broad-based RRR cuts and targeted SME lending. It is highly unlikely policymakers cut their policy rates, but markets may see more similar policy easing measures to those seen recently. Asian equity markets and China-sensitive risk currencies like AUD should find a bid if big measures are enacted.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

The broadest index of Asia-Pacific shares outside Japan is on course for its biggest jump in two months, after declining on Monday to the lowest level in a year. Data from South Africa show that there has been no surge in hospitalisations or deaths resulting from the Omicron variant’s emergence. This suggests that, so far, it is less dangerous than the Delta variant. Policy easing by the People’s Bank of China is also helping the risk mood. The Chinese authorities are demonstrating a more forceful approach to prevent an all-out domestic property market rout.

BTD continues …

Of the many new acronyms that have been invented over the past few years, we would hazard a guess that “BTD” (“Buy the Dip”) is the one that would have swelled your bank balance the most. There was bit more hesitation compared to when the delta variant emerged, but it seems that Omicron for now has simply provided a big buying opportunity. Bargain-hunters scooped up stocks in the US yesterday which had been hit hard recently, led by travel and airlines.

The S&P 500 posted a decent gain above 1% yesterday having touched the 100-day simple moving average. The 50-day moving average has also been pierced to the upside and now acts as initial support around 4560. Bulls will have their eyes on last week’s high at 4672, within a whisker of the all-time top.

Risk and commodity currencies enjoy the change in mood

Commodity currencies are outperforming so far this week after taking a battering so far this month.  AUD, NZD, CAD are all bid with the yen and swissie underperforming as investors move away from havens. The US dollar is eking out gains with the DXY stuck midrange between the last week’s low at 95.51 and the cycle high at 96.93.

The overnight RBA meeting has also helped the more positive risk sentiment in markets today. The bank left their policy settings unchanged as expected and is set to keep rates at 0.1% and weekly bond purchases intact until at least mid-February 2022. More interesting was their say on the Omicron variant which they believe was “a new source of uncertainty but is not expected to derail the recovery.” Policymakers emphasised household spending and business investment above the new variant.

AUD/USD posted a new cycle low below the key psychological 0.70 level last Friday.  The November 2020 bottom sits at 0.6991 which reinforces this level of support. But the pair was heavily oversold, and the bulls are now enjoying two rare days of gains this week. The August low at 0.7106 is the next resistance level to negotiate, then the September trough at 0.7170.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

It’s been all about the bond market this week with the massive bid in fixed income seeing US 10-year Treasury yields plunge from 1.44% at their highs on Tuesday to 1.25% on the lows yesterday. There has been some noise about risk aversion in global stocks, but that doesn’t really apply to the US where the S&P500 closed down less than 1% from its record high. European bourses have opened up in the green this morning while US stock futures are rising as markets roll into the summer.

Bond yields have now started to stabilise with activity and pro-cyclical currencies endeavouring to establish a foothold after their recent pummelling. AUD, CAD and NZD have all been under severe pressure as the reflation trade takes a knock, with the oil market swings certainly not helping matters either.

Contributing to the antipodean’s weakness has been a general worsening in China sentiment. After the disappointing July PMIs, there are reports that the PBoC is considering an interest rate cut which all seems to play into the rerating narrative of the global economic recovery faltering.

Dollar stable amid tumult, ECB review

DXY has lost some momentum due to low yielding currencies having a larger weight in the index. But the dollar has remained broadly supported which is to be expected in this unstable risk environment.

The ECB published the conclusions of its 18-month strategic review with the main takeaway being the higher inflation goal and willingness to tolerate a limited overshoot of the symmetric 2% target. However, the bank does not have the power to raise inflation to target on its own so warnings of an overshoot and forceful action may ring hollow. The timing of the release may also help ECB policymakers avert tapering discussions over the summer with the review helping the doves on the governing council.

EUR/USD found a bid mainly on the back of the market stress and has climbed above 1.18. But bearish momentum is still strong and points to a test of the late March low at 1.1704, with near-term support at this week’s trough at 1.1781.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.