Weekly market overview: Forex, Stocks, Crypto, Commodities

Weekly market overview: Forex, Stocks, Crypto, Commodities

How were doing the global markets this week? Let’s together summarize the overall outcome and overview the markets.

How did the week finish for the Forex market?

The euro remained at a nearly one-month high against the U.S. dollar on Thursday. Also, the exchange rate against the British pound hit a six-week high. This was supported by harsh comments from European Central Bank policymakers.

Previous data showed inflation was at a ten-year high. There are signs that the Fed is not in a hurry to tighten policy.

The U.S. dollar has been on the defensive in the past few weeks. This is due to the doubts about when the Fed will begin to relax its stimulus measures have gradually increased.

Fed  said on Friday that the employment recovery would determine the timing of asset purchases

Since reaching a nine-month high on August 20, the dovish comments of Powell and other Fed policymakers and missing data have caused the U.S. dollar index to fall by about 1.4% against a basket of currencies.

At 0945 GMT, the index weakened slightly to 92.452. This is not far from the weak ADP employment data and the ISM manufacturing survey hitting the 4-week low of 92.376 hits in the previous trading day.

In contrast, the euro has witnessed favorable data flows, including solid manufacturing growth and inflationary pressures from supply chain chaos.

The latest data on Thursday showed that factory prices in 19 countries in the Eurozone increased by 2.3% month-on-month and 12.1% year-on-year. That was much higher than expected.

Before this, data on Wednesday showed that August inflation increased by 3% year-on-year, the highest in a decade.

The euro did not rise further and remained at a one-month high of $1.1857. It is also far away from the one-month high of 130.44 yen, and the six-week high of 86.02 pence against the pound hit on Wednesday.

Investors said it might be challenging to make progress. That’s possibly because the European Central Bank’s guidance suggests that it will continue to purchase assets until it becomes necessary to raise interest rates.

Before Friday’s employment data and the U.S. weekly unemployment benefits data released later on Thursday, currency market movements were suppressed.

The yen was unchanged at 110 against the dollar, and the Australian dollar was at a one-month high of 0.7465.

The New Zealand dollar also hit a one-month high of $0.7090, as interest rate bets pushed bond yields to a two-month high.

How has the Stocks market been doing this week?

Now let’s check how the major stocks have performed this week.

As investors wait for more labor market data, the stock market rose on Thursday. It is expected to be the key message for determining the way forward for monetary policy supporting risky assets in the past year.

Before releasing the critical monthly report on employment growth, the new weekly unemployment benefit figures were lower than expected, highlighting the further improvement in the economic recovery.

The S&P 500 index and the Nasdaq index hit a record high on Thursday morning

The better-than-expected weekly report of unemployment benefits helped power stocks rise. The Dow Jones Index rose more than 100 points or 0.4%, and the small-cap Russell 2000 Index rose 0.6%.

The risk rebound also extended to other assets, with crude oil prices rising by more than 1.5%. Gold fell, and the 10-year Treasury bond yield fell by one basis point to 1.292%.

Technology stocks drive the recent record high of the index, and the Nasdaq Index has continued its outstanding performance since August.

Given the spread of Delta variants, which in turn shows investors’ concerns about the state of economic recovery, growth, and technology, stocks are seen as more defensive deals in the context of the return of the coronavirus.

The number of people who applied for unemployment benefits for the first time last week reached the lowest level since March 2020. The data is further improving as the number of unemployed decreased due to rising labor demand.

As of August 28, the number of initial claims for unemployment benefits each week was 340,000. In contrast, economists generally expect 345,000 people. Last week, 354,000 people applied for unemployment benefits.

Ongoing applications for the regular state program also hit the lowest level since March 2020, at 2.748 million.

As of August 14, approximately 12.2 million Americans received various forms of unemployment benefits, including general state unemployment benefits and enhanced federal unemployment benefits.

This marks an increase of nearly 179,000 people compared to the previous period, although the overall trend has declined in the past few months.

Let’s overview the Crypto market performance of this week

Speaking of crypto, after the poor performance since the beginning of this week, the overall cryptocurrency market resumed its rebound today. After struggling in the past few days, Bitcoin could finally reach the $50,000 level again.

The market expects an increase in trading activity and volatility into September as traders return from summer vacation and return to their desks.

In sharp contrast to the price increase, measured by the market value of Bitcoin divided by the total market value of cryptocurrencies, Bitcoin’s market dominance is 42%, which is lower than the local high of 74% in December 2020 and higher than the historical low.

The market share of smart contract blockchains such as Ethereum and Solana continues to increase, while decentralized financial protocols and irreplaceable tokens have exploded.

Cardano is hitting record highs this week

Now, let’s talk about Cardano-the biggest hit on this week’s crypto market.

Cardano (ADA) has always been one of the best performing cryptocurrencies on the market. The token has surpassed Binance Coin (BNB) to become the third-largest cryptocurrency in terms of market value. However, after hitting an all-time high of $3 earlier today, ADA may surge.

Ether has also successfully stabilized its price above US$3,500. The current transaction price of the native Ethereum token is US$3,775 per token. Cardano continues to lead the market trend, setting a record high of $3 earlier today.

Cardano’s rally coincided with the launch of its Alonzo testnet. The network is preparing to launch the mainnet later this month.

The Alonzo upgrade is expected to bring many changes to the Cardano blockchain, including the introduction of smart contract functions. With the advent of smart contracts, the Cardano blockchain can host various decentralized finance (DeFi) protocols and NFTs.

DeFi and non-fungible tokens are among the hottest areas in the crypto space, and they are widely adopted worldwide. Therefore, the possibility of NFT and DeFi entering the Cardano blockchain is enough to cause a backlash.

Commodities market overview

What has happened in the commodity market this week? Well, experts evaluate the overall weekly performance as positive.

As traders weighed the impact of Hurricane Ida on the U.S. oil infrastructure and before the release of kcriticalU.S. employment data, oil prices rose for a week.

West Texas Intermediate crude oil futures barely changed on Friday but rose 1.8% this week.

After the hurricane, more than 90% of the oil production in the Gulf of Mexico is still closed. The Louisiana refinery is still suffering from the storm.

Before the U.S. jobs report will affect perceptions of the Fed’s monetary policy outlook, the dollar fell-making goods denominated in that currency cheaper.

The Organization of the Petroleum Exporting Countries and its allies decided to increase their supply this week. However, concerns about the impact of the pandemic on energy demand remain, but oil prices are still climbing.

OPEC+ said that crude oil inventories in developed countries are declining, and economic recovery is accelerating

There are signs of recovery in Asia, where Covid-19 infections have surged. Independent refiners in China are buying more crude oil and gasoline, while consumption in India is improving. The return of Iranian supplies looks far away.

Later on, when President Joe Biden visits Louisiana to investigate some of the losses. He may provide more detailed information about Ada’s outage. He will meet with the governor, John Bel Edwards, and local officials, where hundreds of thousands of homes and businesses still have power outages.

The options market also reflects the positive sentiment of crude oil. This week, the global Brent benchmark crude oil premium put options relative to call options fell to the lowest level since mid-June. This shows that traders did not pay too much to prevent prices from falling.

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