There were some notable ups and downs in global markets this week. The markets have been moving according to FED’s Jackson Hole symposium. This article will overview some of the main highlights of this week’s foreign exchange, Crypto, stock, and commodity markets.
What’s new in the Forex market?
From the forex market overview, we can tell the USD is remaining fine this week. The U.S. dollar rose from a one-week low on Thursday. Supported by the U.S. Treasury bond yield maintained at around 1.35%, and the market was calm. The focus of the market was on the signal that the Fed might send at its annual Jackson Hole meeting.
The meeting will start in a virtual form later in the day, but the main event will be a speech by Fed Chairman Jerome Powell on Friday.
Experts widely believe that he will hint at when the Fed can begin to relax monetary stimulus.
The bond market sold off sharply on Wednesday. This is partly because investors hedged before the speech, which caused the 10-year U.S. Treasury bond yield to rise to a high in nearly two weeks.
The U.S. dollar index, which measures the euro against six currencies, rose slightly to 92.86 after falling to 92.801 for the first time since August 17. The exchange rate against the euro was at $1.1775, the same as Wednesday’s one-week low.
The currency market volatility also eased before the speech
This update is suggesting that the euro’s volatility against the dollar is at a one-week low.
The market evaluates how the Fed will respond to signs that inflation may not be as short-lived as it suggests and whether it will stick to a new policy framework that will heat inflation.
The signal of a contraction this year had pushed the U.S. dollar index to a 9-and-half month high of 93.734 last Friday.
The dollar fell by 0.15% against the yen, but since the beginning of July, the currency pair has been hovering near the center of its trading range.
At the same time, more and more central banks worldwide are exiting or considering exiting ultra-loose easing policies. The Bank of Korea raised interest rates for the first time in three years on Thursday.
However, the Korean won gave up its initial gains and fell by 0.6% after a significant rate hike.
How is the stocks market doing?
After overviewing the stock market’s major updates this week, we can tell the stocks are also doing fine. Entering this weekend, fund managers said that they are mainly concerned about the comments made by Fed officials on Friday, which may provide clues to the central bank’s plan to reduce stimulus measures. Some investors are betting that if there are signs that the economic recovery is faltering, the Fed may slow down these plans.
According to Dow Jones market data, the S&P 500 Index hit its 51st all-time high in 2021 on Wednesday, the highest record since 1995, and the Nasdaq Composite Index also hit an all-time high.
How exactly the stocks moved?
- The Dow Jones Industrial Average DJIA, -0.54% closed down 192.38 points or 0.54% to 35213.12 today
- S&P 500 SPX, -0.58% closed down 26.27 points or 0.58% to 4469.92 today.
- The Nasdaq Composite Index -0.64% fell 96.05 points or 0.64% to 14,945.81 today
What influenced the movement of stocks?
According to market overview data, after the major stock indexes climbed for at least four consecutive days and set a series of records, the stock market experienced a correction.
Analysts said that the two deadly bombings outside Kabul Airport in Afghanistan may have affected risk tolerance and caused some selling pressure.
In terms of economic data, the Department of Labor said that the number of first-time jobless claims increased by 4,000 to 353,000 last week, the first increase in five weeks, and slightly higher than the 350,000 expected after falling to a pandemic low in the previous week.
As the official scorecard for the expansion of the U.S. economy, the second estimate of US GDP shows an annualized growth rate of 6.6%, compared with the initial value of 6.5%. Economists had expected the revised interest rate to be 6.7%.
What can we tell about Crypto this week?
While speaking of the crypto market weekly overview, we obviously will mention Bitcoin updates, as it is the major influencer of prices. Bitcoin price is in the best position because it seems to bounce off the critical sloping trend line. However, as selling pressure increased, BTC broke through the barriers and fell.
Although things seem to be cooling off, the deviation of the direction of prominent cryptocurrencies has not been confirmed.
According to local news agencies, Kyrgyzstan’s National Supervisory Authority has drafted cryptocurrency trading regulations on August 25.
The proposed draft aims to legalize cryptocurrency trading operations. It also hopes to reduce risks by introducing a framework that can use blockchain technology to help Kyrgyzstan develop its digital economy.
On the adoption notice, it was reported that Holly Kim, the treasurer of Lake County, Illinois, was accepting cryptocurrency donations for her re-election campaign, making her the first political candidate in the state who did so.
The upcoming candidates plan to accept Bitcoin (BTC), Dogecoin (DOGE), Ethereum (ETH), and Dai (DAI).
In addition, with MicroStrategy announcing the addition of 3,907 BTC to its treasury, these institutions appear to be satisfied with the second phase of the 2021 bull market.
According to the 8-K filing with the U.S. Securities and Exchange Commission (SEC), the company purchased 3,907 BTC at an average price of $45,294. The company pushed its total holdings to 108,991 BTC at the current exchange rate, worth approximately $5.2 billion.
Kraken, a US-based cryptocurrency exchange, announced that it would expand to the European market in 2021. The company is working with local authorities to obtain licenses for multiple local jurisdictions.
Although the exchange is already operating in 190 jurisdictions, the move may be to take advantage of the second phase of the 2021 bull market.
The price of Bitcoin began to rise after falling below the $30,000 mark on July 20
Since then, BTC has been increased by about 72%, briefly breaking through the psychological level of $50,000. In the process of rising, prominent cryptocurrencies perfectly respected the sloping trend line.
However, on August 26, the BTC price fell below the trend line and fell by about 6.3%. This move has now pushed Pioneer cryptocurrency into an open space, with demand areas ranging from US$44,705 to US$46,031.
The overall trend is still bullish and unchanged. However, investors need to be aware that a drop below $44,705 will put the bulls in trouble. Though, if buying pressure increases when retesting the above support area, BTC may rise to 49,000 USD or even retest 50,000 USD.
The daily candlestick pattern shoes that the closing is above $51,500. It means that we should be expecting the beginning of a new uptrend and push BTC to approximately $57,000.
Commodities’ weekly overview: how are the oil prices doing?
Oil prices rose on Friday and are expected to rise sharply this week due to concerns about recent supply disruptions. Energy companies in the Gulf of Mexico began shutting down production. The reason is potential hurricanes that might strike over the weekend.
At 0111 GMT, U.S. West Texas Intermediate (WTI) crude oil futures rose 16 cents, or 0.2%, to US$67.58 per barrel, regaining Thursday’s 1.4% decline. WTI will increase by more than 8% every week, which will be the most significant increase in early February.
Brent crude oil futures rose 16 cents, or 0.2%, to $71.23 per barrel and fell 1.6% on Thursday.
Brent crude oil is much likely to rise by more than 9% this week, which is the largest weekly increase since June 2020. The reason is mainly China’s control of the outbreak of delta-type crude oil.
The company began airlifting workers from an oil production platform in the Gulf of Mexico on Thursday
BHP Billiton and B.P. said that due to a storm brewing in the Caribbean Sea, which is expected to sweep the Gulf of Mexico over the weekend, they have begun to stop the production of offshore platforms.
Offshore oil wells in the Gulf of Mexico account for 17% of U.S. crude oil production and 5% dry natural gas production. More than 45% of the total refining capacity of the United States is located on the Gulf Coast.
The prospect of a supply disruption in the U.S. Gulf helped the market reverse Thursday’s decline. This is partly due to production recovery following a fatal fire on a Mexican oil platform.
The market may have more immediate concerns because the storm in the Caribbean is forming.
It is expected to become a powerful hurricane early next week. The hurricane may cause severe damage to the Gulf of Mexico and Texas.
After the highly anticipated speech by Fed Chairman Jerome Powell, analysts also expect the dollar’s movement to become an essential factor on Friday.
The market expects that he may provide some guidance on reducing debt purchase plans in the fourth quarter.
Analysts said that if they see an earlier contraction, they expect that the dollar will appreciate, putting pressure on oil and other commodities.
Global Markets Weekly Overview: Bottom Line
This was the general overview of this week’s major market updates. Forex, Stocks, Crypto, and Commodities are doing fine, but analysts expect some changes in the following weeks. Stay tuned and follow our weekly updates to get the most up-to-date market info and trends.