Mon, January 30, 2023

Weekly Overview: Forex, Stocks, Crypto, Commodities

Weekly Overview: Forex, Stocks, Crypto, Commodities

Global markets and trends are changing each day. Some major influencers cause price movements each second. How have you performed Forex, Stocks, Crypto, and Commodity markets this week? Our weekly overview will answer this question and summarize this week’s overall market performance.

Forex market weekly overview

Let’s start with the foreign exchange market. The U.S. dollar has fallen for the second consecutive week on Friday, as market sentiment still favours riskier assets, and the intervention of the Bank of Australia has prevented the Australian dollar from rising recently.

The latest US dollar index was at 93.733. There was almost no change during the Asian session, but it fell by 0.24% this week. It continued to fall from the 12-month high of 94.565 hits earlier this month.

Dollar successfully stopped the decline on Thursday and rebounded due to US employment and housing data improvement. Still, the gains in Asia on Friday morning gradually weakened, and risk sentiment was boosted.

Traders are still trying to assess whether there is room for the dollar to fall further or whether this is a temporary phenomenon of March’s rise.

On Friday, the benchmark 10-year U.S. Treasury yield was reported at 1.6872%. It is slightly lower than the multi-month high of 1.7% set on Thursday. The market continues to prepare for the Fed’s announcement that it will begin to reduce its colossal bond purchase plan, which is widely expected in November.

The reason for the weak dollar is the strong currency performance of most commodity-exporting countries

Analysts said the market was calmer on Friday as traders took profits and energy prices weakened.

The Australian dollar traded at US$0.7475 against the US dollar, off Thursday’s three-month high, as the Evergrande news boosted China’s exposure to the currency and was offset by the Reserve Bank of Australia’s actions to prevent bond selling and the energy suspension.

Stocks market weekly overview

Unlike the forex market, the stock market was mostly higher on Thursday, with the Standard & Poor’s 500 Index hitting a record high as a series of solid earnings results and economic data helped boost the stock price.

The S&P’s 500 Index rose 0.3%, setting a new intraday and closing high, mainly led by consumer discretionary and information technology sectors. The better-than-expected weekly report on new jobless claims also helped boost risk assets to new lows during the pandemic. The Dow fell but broke from its intraday low. The 30-share index hit a new intraday high on Wednesday’s regular trading day, the first record high since mid-August.

Netflix and Tesla also hit a record high on Thursday, helping the Nasdaq index, dominated by technology stocks, to rise by 0.6%.

The expected earnings results of companies from Verizon (VZ) to Anthem (ANTM) and Abbott Laboratories (ABT) exceed the continuity of the strong quarterly reports that large banks began last week. Tesla’s (TSLA) share price rose after the electric car manufacturer announced a record quarterly delivery volume, but revenue fell.

Some strategists said that since stock trading prices are close to record levels, it is necessary to maintain this profitability in order to promote further appreciation.

They added that since the COVID bottomed out, fiscal and monetary stimulus has been driving the market. Experts don’t expect interest rates to rise too much from here. But this means that the market is reasonably valued. No one’s estimate is cheap.

Experts hope to see more robust earnings growth and continued strong earnings growth

So far this earnings season, many commodity production companies have emphasized concerns about rising input prices and continued supply chain disruptions. Tesla pointed out in its financial report that various challenges such as semiconductor shortages, port congestion, and alternating power outages have been affecting their ability to keep the factory running at full speed. Procter & Gamble (PG) estimated earlier this week that expenditures related to rising commodity and freight costs this fiscal year will exceed $2 billion.

However, so far, investors have ignored these concerns at least temporarily and are optimistic that these pressures will prove to be temporary.

Crypto weekly overview

Now, let’s discuss crypto market performance. The price of cryptocurrency plummeted today as Bitcoin fell from a historical high set after the debut of the first US Bitcoin futures exchange-traded fund two days ago. The cost of the world’s largest cryptocurrency by market value fell 4% to $62,740.

The tokens related to the Ethereum blockchain and the second-largest cryptocurrency, Ether, fell more than 2% to US$4,112. The price of Cardano fell nearly 3% to US$2.16, while Dogecoin also fell 3% to US$0.24. Shiba Inu, Binance Coin, Litecoin, Uniswap, XRP, and other digital tokens have also seen price cuts in the past 24 hours, but Solana has risen by more than 10%.

Bitcoin rose to a record high of US$66,974 on Wednesday: is it due to Bitcoin ETF?

The debut of the ProShares Bitcoin Strategy ETF has driven the recent rebound. It has been increased from the previous high of US$64,895 for six months. Investors are betting that the long-awaited launch of the Bitcoin ETF will attract more investment from retail and institutional investors.

However, analysts at JPMorgan Chase expressed doubts about how long the Bitcoin price boost will last for the ProShares ETF, which you can trade under the ticker symbol BITO.

ETFs do not invest directly in Bitcoin. Instead, it invests in the futures market related to Bitcoin. For example, people with old-fashioned brokerage accounts can buy ETFs without opening an encrypted trading account.

Commodities weekly overview

The commodity market has also experienced some severe losses. After Russian President Vladimir Putin stated that OPEC+cartel, including Moscow, may produce more than its announced output, the crude oil market closed on Thursday at its most significant decline in two weeks.

Oil prices have also fallen because China, India, and other consumers oppose high energy prices, which could ruin their economies due to uncontrolled inflation.

After the National Oceanic and Atmospheric Administration downgraded to cold weather, it is expected that winters in most parts of the United States will be above average, which has increased the pressure on the energy market. The price of natural gas fell by nearly 1% on the same day after the weekly increase in storage was slightly higher than expected. This is another sign of the warmer weather this autumn and the decrease in heating use.

Is OPEC+ planning to increase oil output?

In Putin’s case, he announced that OPEC+ is increasing oil production. This announcement surprised the market, as it was “a little more than agreed.”

This is in sharp contrast to what most people in the 23-nation oil production alliance led by Saudi Arabia said.

OPEC+ officially stated at its meeting in early October that although global supply constraints have pushed prices to seven-year highs, it would not increase production beyond its previous commitment of 400,000 barrels per day.

The OPEC+ arrangement implemented since 2015 has primarily benefited from the cooperation between Russia and Saudi Arabia. Saudi Arabia is the world’s largest oil producer after the United States. Since the March coronavirus pandemic, the United States has Lost the first ranking in 2020.

However, the Moscow-Riyadh agreement is not without problems. The production divergence between the two led to a brief collapse of OPEC+’s work order before the pandemic, triggering a global oversupply. It caused U.S. crude oil prices to fall to negative values ​​for the first time in history.

How hard have the prices dropped?

During the trading day on Thursday, the benchmark price of WTI crude oil for US crude fell 92 cents. It dropped to US$82.50 per barrel, which was the largest one-day drop since October 6. WTI fell to a low of $80.81 earlier. On Wednesday, it hit a high of $84.25, a seven-year high.

Brent crude, the global oil benchmark traded in London, closed down US$1.21, or 1.4%, to US$84.61. Brent crude oil hit a three-year high of $86.09 on Tuesday.

In addition to crude oil, the decline in the Asian coal market also put pressure on prices in the energy sector on Thursday.

After China’s National Development and Reform Commission stated that it would “study specific measures” to drive down local coal prices, the January benchmark thermal coal contract on the Zhengzhou Commodity Exchange fell from Tuesday’s historical high of 1,982 yuan to below 1,588 yuan.

India is the world’s third-largest energy consumer after the United States and China. On Thursday, it hopes that oil producers will consider supplying crude oil under long-term contracts at a fixed interest rate. It is much likely to help protect consumers from price fluctuations.

Summery

To conclude, according to our weekly overview analysis, all the major markets have experienced some sharp changes this week. Stay tuned for future updates!

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