Sun, April 21, 2024

Weekly overview of Forex, Crypto, Stocks and Commodities

stock market, weekly overview, Major indexes fell ahead of testimony from Jerome Powell

Forex Weekly Overview

The forex market has some positive outcomes by the end of this week. The dollar got stronger after adjustment for inflation in the United States. The expectation of vital employment data might provide reasons for the United States to accelerate its policy tightening. The dollar rose slightly on Friday.

This week, Fed Vice Chairman Richard Clarida hinted that the conditions for raising interest rates might be met as early as the end of 2022, laying the foundation for the dollar’s rise.

Clarida’s remarks boosted U.S. Treasury yields after falling for five consecutive weeks. The “real” yield excluding inflation will end six straight weeks of decline.

U.S. non-agricultural employment data will be released at 1230 GMT. The forecast of jobs created last month ranged from 350,000 to 1.6 million, and the consensus number is 870,000.

Such a large number may further boost the U.S. Analysts expect that the dollar’s exchange rate against the euro and the yen will grow significantly. Additionally, we will not see any tightening policies in the next few years.

According to the analysts, even numbers close to the current consensus might trigger market reactions.

At 0830 GMT, the U.S. dollar traded at a weekly high of 92.39 against a basket of currencies. After falling 0.9% last week, it has risen 0.3% so far this week, which is the most significant drop since May.

The exchange rate against the euro is 1.1812 US dollars, which is also under pressure from weaker-than-expected German industrial orders data. The dollar also hit a one-week high of 109.88 yen.

After the number of initial jobless claims fell by 14,000 to 385,000 in the week ending July 31, and the number of layoffs fell to the lowest level in more than 21 years, expectations for vital U.S. employment data increased on Thursday.

Updates in crypto market this week

bitcoin and cryptocurrency

The Crypto industry had some exciting updates this week. The major upgrade of Ethereum codenamed London was launched earlier today-helping the price of Ethereum record a 20% increase last week and returning Bitcoin to more than $40,000.

The rise in the price of Ethereum pushed Ether to USD 3,000, causing the cryptocurrency market to climb from a recent low of USD 1.2 trillion in July to nearly USD 1.7 trillion.

As the rise of Ethereum accelerates and the price of Bitcoin settles, some people in the crypto industry predict that Ethereum may surpass Bitcoin and become the world’s most valuable cryptocurrency.

The London upgrade of Ethereum exists to help the blockchain expand and make soaring transaction fees easier to manage.

This upgrade is part of Ethereum’s long-awaited shift from the energy-intensive proof-of-work model used by Bitcoin to proof-of-stake (allowing users to generate new Ether from their existing assets), namely Ethereum 2.0.

The entire upgrade is not likely to be fully realized until 2022.

The Ethereum bulls pointed out that the network recently surpassed Bitcoin in many closely watched indicators. Its price performance relative to Bitcoin in the past year is their reason for forecasting. Ethereum has soared by 600% in the past 12 months, while Bitcoin has risen by 250%.

The upgrade of Ethereum will also cause some Ethereum tokens to disappear or restrict the entry of new tokens into the market, theoretically making tokens more scarce.

According to reports earlier this week, Dan Morehead, the founder of Pantera Capital, a $2.8 billion investment fund on cryptocurrencies, predicted that Ethereum would eventually flip Bitcoin. However, some analysts suppose that Bitcoin prices are likely to reach an astonishing 700,000 US dollars per bitcoin.

Stocks Weekly Overview

European stock markets slightly dropped on Friday before the U.S. released a critical employment report. Since May, this week recorded its best results due to increased investor confidence in the region’s economic recovery and corporate earnings growth.

The pan-regional STOXX 600 index fell by 0.2% in early trading after rising for four consecutive days and setting a record high. The benchmark is much likely to increase by 1.6% per week.

Despite lingering concerns about the slowdown in U.S. economic growth and the increasing Covid-19 cases, this week’s quarterly results were far better than expected. A significant amount of mergers between European companies boosted market sentiment.

Investors are much likely to pay close attention to the July employment data. The data was released later in the day for clues on when and how the Fed will begin to unwind its large-scale asset purchase program.

Though, according to Friday’s data, Germany’s industrial output unexpectedly dropped again in June. It indicates that the recovery has slowed down and is hindered by the bottleneck in the supply of intermediate products.

The season of earnings was bright for the stocks market. 67% of the STOXX 600 index companies announced they had exceeded expectations.

German insurance company Allianz shares rose 2.3% after announcing that its net profit growth in the second quarter was better than expected and provided a more optimistic full-year outlook.

After reporting revenue growth of 4.6%, The London Stock Exchange Group rose 3.5% in the first half of 2021.

Thanks to one-off tax incentives and higher income, Italian bank Banco BPM rose 3.3% after turning to profit in Q2.

Among the notable decliners, German meal package delivery company HelloFresh fell 4.3% after lowering its 2021 profit forecast due to increased spending to achieve substantial growth.

What happened in commodities this week?

the Middle East and Central Asia

According to the weekly overview, the oil market does not have bright days.

The decline in Brent and West Texas Intermediate crude oil is limited by the tensions between the Middle East countries.

Analysts expect the U.S. crude oil futures to record their biggest weekly drop since late October on Friday. The oil prices are currently under pressure as top consumers have imposed travel restrictions as the Delta variant of the coronavirus spreads.

However, rising tensions in the Middle East provided support for the market.

U.S. WTI crude oil futures decreased by 6.6% this week. This is the most significant weekly decline since the end of October. As of 0038 GMT, the market was flat at US$69.09 per barrel.

Brent crude oil futures have fallen 6.6%, the biggest drop since mid-March. The price on Friday fell 2 cents to US$71.27 per barrel.

China’s move to restore travel restrictions reflects the situation in Asia as a whole. Simultaneously, it results in pressure on oil prices this week.

At least 46 cities advise against travelling, and the authorities have suspended flights and stopped public transportation. With the summer tourist season coming to an end, this may affect oil demand.

Japan is preparing to extend emergency restrictions to more counties. China, the world’s second-largest oil consumer, has imposed rules and cancelled flights in some cities, threatening fuel demand.

In the United States, the number of new COVID-19 cases every day has climbed to a six-month high. The Delta variant of Covid-19 “floods” Florida and some other states with slow vaccination temps.  The covid-19 cases reported countrywide exceeds 100,000.

Concerns about increased tensions between Israel and Iran have limited the decline in prices.

Last Thursday, an oil tanker was attacked off the coast of Oman, and Israel blamed it on Iran.


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