Fed Chair Powell Retires 'Transitory,' the Dollar Flies

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December to be overshadowed by Omicron?

USA500, Daily

December is traditionally a strong month for global equity markets, especially in BULL years. During November all three of the major US equity markets posted new all-time highs, before being shaken by the arrival of the latest COVID-19 variant – Omicron. Initial reaction, as normal in markets, is to overreact to anything it is not expecting; the ONE thing above all else that markets hate is a surprise. Although a new, more transmittable variant was somewhat inevitable as the virus persisted and low-income countries continue to struggle to reach even 20-30% vaccination levels, the key metric continues to be hospitalizations and death rates and on these we will have to wait another few weeks. News this week has whipsawed from countries closing borders, President Biden warning against Omicron panic and pledging no new lockdowns, the WHO warning that the omicron variant poses ‘very high’ global risk and is likely to spread and Fed Chair Powell telling the Senate that the variant poses downside risk to economy and complicates the inflation picture.

So, the traditional December equity rally has some significant headwinds this year, however the fundamentals remain robust and history is on the side of a positive month. Since 1970, the key equity markets (UK100 & USA500) have risen almost every December – 43 years out of 50, or 86% of the time¹. 2021 is the 12th year of the equity market bull run. During November the USA500 rallied and tested 4,700 very quickly and then consolidated. However, it has only managed to close north of this key level on two days, (November 18 and the Futures closed higher on Thanksgiving (25th) on a low volume day). The market tanked -2.27% on Friday, losing over 106 points, and struggles to hold 4600.

Since 1987, the USA500 has logged gains in 26 of 34 years from the close on Friday after Thanksgiving to year end.³ Five of the best (positive) trading days for stock markets (UK100 & USA500) for the entire year occur in December – all of them after December 21.²

December 2018 was a recent notable exception for the final month of the year. The S&P500 shed close to 300 points and over 10.5% that month as the stock market had its worst December since the Great Depression. President Donald Trump’s trade war with China, the slowdown in global economic growth and concern that the Federal Reserve was raising interest rates too quickly all contributed to the pessimistic reaction. In 2019 and 2020 it returned to trend, rising 2.29% and 2.45%, respectively. A close over 4602 today will see a positive November, however the next few weeks are likely be particularly volatile as Omicron headlines and economic data releases weigh on risk sentiment and investor outlook.

¹ The Stock Market Handbook – David Schwartz

² The Stock Market Handbook – David Schwartz

³ The Stock Trader’s Almanac – https://jeffhirsch.tumblr.com/

 

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Virus, inflation & Fedspeakers overshadow NFP

The markets changed on a dime last week as worries of the bearish impacts over the new Omicron covid variant weighed heavily on equities, while concurrently supporting a swift flight into haven assets. Inflation trades were hit hard and oil prices plunged alongside hefty declines in travel shares and financials. The USA30’s -2.5% plunge on the day was the largest since October 2020. For the week, Wall Street was off -2.3% to -3.1%. But losses in Europe were much deeper with the UK100 crashing -6.1%, while the GER30 tumbled -5.6%.

Meanwhile, fears over near term hawkish central bank outcomes from the BoE and FOMC were sharply deflated, and that helped knock yields lower too. Treasury yields richened double digits, taking the 2-year down to 0.498% at the close, with the 10-year at 1.473%. The Gilt slid 14.5 bps to 0.819%, while the Bund was down 8.7 bps to -0.341%. The focus on Omicron will distract the markets from key data ahead. There is also a host of Fedspeakers.

The calendar has a few important data releases this week but they will lose some of their potency as worries over the Omicron virus will keep the tone jittery and outlooks more uncertain. This week’s focus was going to be the nonfarm payroll report on Friday as the FOMC has yet to fulfill the second part of its mandate, full employment, though it is getting closer, but now, Omicron will take the top spot on the wall of worry as the spread is monitored, along with the various mitigation measures. Already the US and other countries are banning travel from Southern Africa. Meanwhile, there is another heavy Fedspeak docket and it will be helpful to hear their views on current conditions, though we don’t expect any of them to pre-judge their decisions for the December 14-15 policy meeting considering how quickly things change. 

Until Omicron reared its ugly head, inflation was going to remain in focus this week, although attention would quickly turn to Friday’s November jobs data with another strong report the potential catalyst for the FOMC to announce it would speed up its QE tapering in December. Numbers in line with projections could be close to getting the Fed to pick up the pace as Chair Powell has said it’s the accumulation of evidence, not necessarily the report. A 440k increase is expected in November payrolls after the 531k rise in October. The jobless rate should hold steady at 4.6% for a second month, down from 4.8% in September. Hours-worked are assumed to rise 0.3%, while the workweek holds at 34.7 from October. Average hourly earnings are assumed to rise 0.4% with the y/y wage gain climbing to 5.0% from 4.9%.

Meanwhile, so far today the US Dollar has come under fresh pressure as virus jitters fueled another wave of risk aversion. The USDIndex is at 95.74, below the 6-session low of 95.75 it clocked on Friday. The index had bounced to 96.44 highs in NY on Monday, as traders largely determined that the Omicron scare on Friday was overdone, but warnings from Moderna that the variant will leave current vaccines much less effective, saw traders ditching stocks and moving back into bonds. The US 10-year rate plunged -7.3 bp to 1.426% and oil prices slipped to USD 68.32.

EURUSD lifted to 1.1360 amid a broad move higher in the single currency. Bunds are underperforming versus Treasuries, ahead of what is likely to be a very hot Eurozone inflation number and as German labour market data continues to look better than anticipated. ECB Vice President Guindos repeated this morning that inflation is likely to stay higher for longer, although officials have been trying to play down the importance of the inflation spike, which saw German HICP hitting 6.0% y/y yesterday. The impact of the Omicrom virus variant remains unknown, and until scientists get a better handle on the transmissibility and virulence of the new strain, markets are likely to remain jittery. Yields remain below recent highs, but even if it may take two weeks for full details on the new Covid-variant to be confirmed, it seems unlikely that Fed QE tapering and the timeline for rate hikes will be impacted to the extent Friday’s moves suggested. Still, until details on the variant are fully known, USD may remain fickle.

USDCAD lifted to 1.2797 as a fresh wave of risk aversion has hit confidence in the global recovery and oil prices. Fresh warnings that existing vaccines won’t be as effective against the Omicron variant have weighed on confidence and the USOIL has dropped to just $67.98 during the European AM session, which has put pressure on the CAD. Indeed, oil prices will continue to drive CAD direction, though traders will also keep a close eye on Canada GDP data today.

Russia’s Deputy Prime Minister Novak said a meeting of the OPEC+ joint ministerial monitoring committee “was postponed to get more information about the current events, including the new virus strain”. After speculation of a reaction to the release of strategic oil reserves, the comments added to talk that OPEC+ may postponed the planned increase in output as Novak confirmed that the alliance will discuss “the need for measures.

Nevertheless, there is a host of Fedspeakers this week, including Chair Powell, VC Clarida, and Williams. It may be too early in the Omicron phase for them to shed much light on their thinking, but comments from Bostic on Friday suggested he is not worried, yet. Chair Powell and Treasury Secretary Yellen will testify on the CARES Act before the Senate Banking Committee today, and then again before the House Financial Services Committee (Wednesday). Williams (Tuesday) will speak at a food insecurity event. VC Clarida (Tuesday), who will be out of this job soon, discusses Fed independence. Bostic (Thursday) will speak on the high cost of housing and will also take part in a Reuters event. Daly and Barkin (Thursday) will be at the Peterson Institute. And Bullard (Friday) will speak at the Missouri Bankers’ Association. The Beige Book (Wednesday) will likely reflect ongoing inflation concerns as well as some further downshifting in economic activity, as was the case in the October release.

Click here to access our Economic Calendar

Andria Pichidi 

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Covid Fears Keep Risk Assets Under Pressure

Risk assets resumed downside while demand for sovereign debt of developed countries is rising across all maturities. The market is clearly dominated by risk-off, pending new information on how contagious and lethal the new covid strain, as well as information about effectiveness of existing vaccines. Treasury yields are falling suggesting that investors are withdrawing their bet on the rapid tightening of the Fed's policy, the adequacy of these expectations should be clarified by another speech by Fed head Powell, this time today in Congress. The acceleration of inflation in Germany requires more action from the ECB.Yesterday's rally was short-lived, selling resumed during the Asian session on Tuesday. European indices are falling by an average of 1.5%, futures for US indices are losing less than 1% at the moment. The commodity market, led by oil, remains under pressure, worries about consequences of the spread of the new strain have not gone anywhere. Powell announced yesterday, as expected, that the omicron poses a threat to achieve the Central Bank's dual mandate - maintaining price stability and achieving maximum employment. Markets interpreted this as a signal that the rate hike will be delayed.A reassessment of expectations of how quickly the Fed would tighten policy, coupled with higher inflation in Germany, pushed the US-German short-term rate differential down by 20 bp in three days:Prices in Germany rose by 5.2% on an annualized basis, exceeding forecast by 20 bp. Today there will be data on inflation as a whole for the Eurozone. The chances that the ECB will move faster to slow down the QE rate have increased, which had a positive impact on the euro. Considering that the dollar retreats on all fronts, the main dovish impact came from Powell’s speech yesterday.Accordingly, with the emergence of positive news associated with the new strain, one can expect that investors will again bet on the rapid withdrawal of stimulus measures from the Fed, which will likely revert USD downside.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/covid-fears-keep-risk-assets-under-pressure"
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Fed's Powell Warns Over Omicron Threat

Obstacles AppearJust as bulls thought they were finally beginning to run with the ball, it seems the news of the Omicron variant has well and truly screwed up the play. Fed chairman Powell is due to testify at the Senate Banking Committee later today. However, Powell’s planned comments were released by the Fed last night and suggest a great deal of caution has moved into the outlook with regard to the Omicron variant.Powell: Downside Risks In his comments, Powell noted: “The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.” The Fed chair went on to say: “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labour market and intensify supply-chain disruptions.”Fed Tightening Expectations DashedAhead of Friday’s new regarding Omicron, the market had been ramping up its Fed tightening expectations in response to a slew of better data recently. Inflation in particular has been soaring higher, while other key indicators, such as retail sales and employment readings, have also been on the rise. With this in mind, traders anticipated that the Fed would likely need to step up the pace of its tightening program, forecasting also that the Fed would likely raise rates ahead of schedule also.However, in light of the news and the fears regarding the severity of this new strain, traders have since scaled back their tightening expectations with USD under selling pressure as a result. With many countries around the globe closing their borders, imposing fresh lockdowns and the risk that many more will be forced to follow suit if the new variant proves to be as dangerous as initially thought, then this could easily derail the US and global recovery.NFP Up NextIn light of the current news, Friday’s employment readings in the US will likely take something of a backseat. A solid number, while still positive, will struggle to be viewed as a reason for tightening given the fresh risks in the Fed’s outlook. Additionally, if there is any weakness in the data this will likely amplify the current selling, weighing on USD further.Technical ViewsDXYThe decline from just ahead of the 97 level has seen DXY trading back down into the bull channel. However, we have seen buying into the dip and, while price holds above the 95.61 level, the focus is on further upside. A break below 95.61, however, would likely be accompanied by a shift in momentum readings, paving the way for a deeper correction.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/feds-powell-warns-over-omicron-threat"
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What the Omicron variant means for your money

The Omicron variant of Covid-19 is panicking the markets. Will we see a new lockdown? What does it mean for the economic recovery, for inflation and for your portfolio? John Stepek explains.

from Moneyweek RSS Feed https://moneyweek.com/investments/investment-strategy/604173/covid-omicron-variant-effect-markets-and-your-money
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Market Spotlight: ZAR Short Opportunities

ZAR Under PressureFollowing the initial sell off in ZAR on Friday as news of the variant first broke, price has since stalled and remained within the range of that initial day’s decline. For now, price is continuing to hold support at the 6.964 level. However, given the downside risks in the outlook, pertaining to the Omicron news-flow, and the likelihood that JPY strengthens further on safe haven demand, there focus is on a continuation lower, in line with bearish MACD and RSI readings. With this in mind, bears can look for a break of Friday’s lows (sub 6.964) targeting a move down to the 6.669 level initially and a test of the channel low.Keep An Eye OnThe key issue here is news around the Omicron variant. If incoming news worsens this will increase the pressure on ZAR and increase the safe haven demand for JPY, driving this pair lower. If news flow lightens up, for example if scientists declare the strain is not as lethal as thought or is more responsive to vaccines than first thought, this will likely fuel a reversal in the current dynamic.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-zar-short-opportunities"
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The IndeX Files 30-11-2021

Omicron Towers Over MarketsBenchmark global equities remain under heavy selling pressure this week as uncertainty over the new COVID strain, Omicron, continues to grip markets. Markets were roiled late last week in response to the first announcement upon the discovery of the new strain, which is thought to be more contagious and less responsive to vaccines than Delta and Beta. Initially this week, however, there was a pause in selling on Monday as world leaders urged caution, suggesting that it would take at least a few weeks before scientists can assess the real threat from the virus. However, with further cases popping up around the globe it seems that traders are acting ahead of the curve and squaring riskier positions.Given the tightening restrictions in place across Europe ahead of the new strain’s emergence, traders sense that the months ahead (particularly for the West heading into winter) are looking perilous. Several countries have now closed their borders once again in a bid to curtail the spread of the virus with the US refusing to rule out further travel restrictions. For now, the market is clearly erring on the side of caution while it awaits further details around the new strain, suggesting that near term we are likely to see continued selling unless there is a major shift in the narrative around the new variant.Technical ViewsDAXThe near 8% breakdown below the rising channel has seen price plummeting back down to the 15078.83 level. While this level is holding as support for now, with both MACD and RSI bearish, there are clear downside risks towards the 14791.27 level next.S&P500The sell off in the S&P has seen the market breaking down below the rising channel. However, for now, price is sitting in a block of consolidation at the foot of last week’s decline, having not yet broken the lows. With MACD and RSI both bearish, the focus is on a test of the 4545.25 and 4475.25 levels next.FTSEThe sell off in the FTSE has seen the market trading lower from around the 7250 level to current 7005 lows. For now, price is sitting atop the bull channel support and 6968.7 level. A break lower here, however, will open the way for a test of the 6832.2 level next.NIKKEIThe breakdown below the rising channel in the Nikkei has seen price moving down to test the 27422.9 level support, ahead of the pivotal 26932.1 level. This lower level is a major long term level and a break below there would be a strong, bearish development for the market.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/the-index-files-30-11-2021"
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Should you overpay your mortgage?

People are keen to cut the size of their home loans, but is overpaying your mortgage the best option?

from Moneyweek RSS Feed https://moneyweek.com/personal-finance/mortgages/604146/should-you-overpay-your-mortgage
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Four of the best new funds in the evolving world of ETFs

The latest exchange-traded funds (ETFs) offer access to themes ranging from infrastructure to smart homes. David Stevenson takes a look at four of the best.

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Investment Bank Outlook 30-11-2021

CIBCKey Headlines In a joint congressional hearing with Yellen, Fed Powell will say that the rising Covid-19 cases and omicron variant threaten to imperil the economic recovery and exacerbate inflation pressures. China’s official PMIs unexpectedly rebounded to expansion in November, ending a two-month contraction. But sub-indexes measuring domestic and external demand remained in contractionary territory this month. It is month-end and rebalancing of portfolios tops agenda. Hearsay shift out of equities into bonds.FX Flows There wasn’t much of Tokyo fixing activity, speculators bought €Yen ahead of open but ran into difficulty near 128.50. Apparently, EUR$ offers were iceberg around 1.1300. $Yen got up to 113.90 and then reversed back. Slightly firmer UST yields should tempt buyers on dips. There is one decent option strike maturing today New York cut, at 113.80 we have $1.6bn, others are way off the radar. With €Yen buying earlier, EUR$ rose to 1.13005, offers were hidden or iceberg. With talk of month-end rebalancing, think we might just squeeze through. First level of resistance is 1.1330, then 1.1370. Downside support at 1.1260, there is a €1.03bn 1.1255 strike due today. I suspect that market positioning is well balanced, leveraged accounts are small short while IMM are long, they have reduced over the past weeks but still substantial. Late morning squeeze soaked up offers and rose to 1.1305.Credit AgricoleUSDJPY & OmicronThe emergence of the omicron coronavirus variant led to a clearing out of long USD/JPY positions. According to our FAST FX model, USD/JPY has become undervalued relative to its short-term fundamentals. n Omicron has so far shown to cause minor symptoms. While there was a rapid spread of the variant throughout South Africa, less than a quarter of the country’s population is fully vaccinated. Pharmaceutical companies have the ability to refit their vaccines and provide new vaccines to counter the omicron variant, if needed, by the New Year. n We continue to expect 2022 to represent the return to something more ‘normal’ in the global economy as more countries adopt living with Covid strategies.This environment would be negative for the JPY, especially as Japan stands to gain the least out of the G10 economies given that its services sector makes up the smallest part of its economy relative to its manufacturing sector. n USD/JPY represents a good hedge against inflation being more than transitory in 2022 given its positive correlation with oil prices, and we believe the Fed will be one of the first major central banks to respond if inflation pressures turn out to be less transitory than expected.

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Dollar Weakens; Yen, Swiss Franc Favored as Omicron Fears Rise

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Daily Market Outlook, November 30, 2021

Daily Market Outlook, November 30, 2021 Overnight Headlines Moderna Chief Predicts Existing Vaccines Will Struggle With Omicron Variant US President Biden Warns Against Omicron Panic, Pledges No New Lockdowns US Congress Aims For Quick Passage Of Bill Averting Government Shutdown Senator Manchin Holds Off On Committing To Moving Biden Agenda This Year Fed Chair Powell To Tell Senate Omicron Poses Downside Risk To Economy Yellen Warns Failure To Deal With Debt Limit Would 'Eviscerate' US Recovery French PM To Offer Boris Johnson EU Migration Deal After Channel Deaths Half Of UK Companies Plan To Raise Prices To Offset Higher Wages: LLoyds EU, Russia And Iran Upbeat As Nuclear Talks Resume Amid Scepticism Chinese Manufacturing Rebounds In November With Signs Inflation Easing Japanese Output Rises For First Time In 4 Months As Supply Constraints EaseThe Day Ahead Asian equity markets are down this morning as investors remain uncertain about the risks posed by the Omicron variant. In England, the government has announced an acceleration of its booster vaccine programme. Meanwhile in the US, President Biden said that no new restrictions were necessary at present. The November Lloyds Business Barometer, which was released overnight, edged lower for the second month in a row. However, the decline was a modest 3 points, leaving the headline reading still well above levels earlier this year and its long-run average. The survey showed that hiring intentions remained strong although they have eased a touch since the end of the furlough scheme. Meanwhile, wage pressures continued to build and the percentage of firms expecting to raise prices rose to a record high. BoE policymaker Mann is set to speak this afternoon. She voted with the majority to leave interest rates unchanged in November but also for an early end to the QE programme. Mann has indicated that she favours a modest rise in interest rates in the coming months, but it was unclear even before the recent news on the virus whether she would support a December hike. Markets will focus on any comments on the potential impact of the new variant on the outlook for monetary policy. US Federal Reserve Chair Powell will testify to Congress alongside Treasury Secretary Yellen later today. Powell is bound to be quizzed about the sharp rise in US inflation. Of most interest will be whether he offers any signals about the future policy response. Prior to last week’s news, markets were increasingly speculating that the Fed would accelerate the tapering of its asset purchase programme at its December meeting to open up an earlier than expected hike in interest rates. However, Powell’s pre-released opening comments yesterday pointed to the downside risks to economic growth and employment, which suggests that any further action may now be delayed. In the Eurozone, November CPI inflation is forecast to have risen further above the ECB’s target and to a record high. Yesterday’s rise in German inflation points to a risk that the rise may be larger than expected. However, it will have little impact on interest rate expectations as ECB policymakers continue to signal that they see the increase as temporary and that monetary policy will not be tightened in response.CFTC DataFor the first week in seven, investors added to the aggregate USD long position with a large USD3.8bn increase over the Nov 17-23 week. The total bullish position on the greenback now sits at USD22.3bn, less than 5% off its early-October high of USD23.2bn. Over the week, the USD gained ground against all major currencies, with the MXN seeing the steepest decline at 2.2% while the JPY, CHF, and GBP outperformed with more modest losses of 0.3/4%.Negative EUR sentiment worsened significantly this week as accounts added USD1.8bn to the shared currency’s short of now USD2.3bn. The EUR looked on track to test the 1.12 level in the days following the data cutoff (it has since traded briefly under the mark) amid ultra-dovish policy settings at the ECB and the risk of lockdowns in the currency zone due to surging contagions. The current EUR short is, however, still about USD1bn smaller than in early-October and interest in shorting the EUR may now be limited after already seeing a 10c drop since May.Speculative adjustments in the high-beta/commodity currencies (CAD, MXN, AUD, NZD) accounted for a net USD1.1bn combined bet in favour of the dollar. The shift in CAD sentiment accounted for the bulk of this move, however, as positioning deteriorated from net long to net short at USD247mn on a USD941mn move against it over the period with USDCAD testing 1.27. The MXN short rose only slightly by USD17mn to USD1.2bn.The sizeable AUD short rose for the first time since early-October ahead of its decline under 0.72 last week. Investors placed a net USD107mn wager against the Aussie last week, taking the overall AUD short to USD4.6bn about USD2bn short of its peak last month. As for the NZD long, bullish optimism is showing limited signs of waning despite the kiwi dropping under the 0.70 level in mid-month and today trading at a new low since last November. The NZD long position (still the largest in this report) was left practically unchanged close to USD1bn in data to Tuesday afternoon, i.e. just before the RBNZ’s cautious hike that evening.The haven/yield-sensitive currencies, the JPY and CHF, saw an increase in their respective aggregate shorts after two consecutive weeks of reductions; market turmoil in recent days has possibly resulted in adjustments in their favour, however. Bearish positioning in the JPY rose to USD10.6bn on the back of a USD420mn negative bet after the previous week’s USD1.5bn bullish adjustment. As for the CHF, speculators increased their negative bets by USD330mn to USD1.5bn.Finally, the GBP’s short rose for a fourth consecutive week, by USD239mn to USD2.9bn its highest level since summer 2020, as investors continue to adjust to BoE hike uncertainty that has taken the pound to its weakest level for the year in recent trading.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )EUR/USD: 1.1250-55 (1.3BLN), 1.1300 (553M), 1.1350 (549M)1.1445-50 (1.5BLN). GBP/USD: 1.3485-1.3500 (427M)AUD/USD: 0.7075 (230M), 0.7150 (249M)AUD/NZD: 1.0470 (1BLN). NB: 1.2BLN will expire at 1.05 on WednesdayUSD/JPY: 113.80 (1.6BLN), 114.00 (615M), 114.50 (718M), 114.75 (471M)115.00 (2.8BLN)Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above Edges higher in quiet Asia as asset markets remain steady EUR/USD opened 0.22% lower at 1.2290 after recovering from 1.1258 It moved up to 1.1305 early Asia on EUR/JPY demand at Tokyo fix Heading into the afternoon it is settling around 1.1300 Support at 10-day MA at 1.1279 and another close above would suggest bottom forming 5-day MA pointing up and about to cross 10-day MA also suggesting bottoming Resistance is at the 38.2 of 1.1692/1.1186 at 1.1379 & 21-day MA at 1.1397GBPUSD Bias: Bearish below 1.36 Bullish above. GBP steady – buoyant in Asia, awaiting fresh catalysts GBP steady to buoyant in Asia, awaiting fresh catalysts Cable 1.3310-29, holding above 1.3288 low yesterday, 1.3278 low Friday Holding for now in area of 1.3319-52 hourly Ichi cloud, 1.3322 55-HMA Seen heavy above 1.3331 descending 100-HMA, recent moves above rejected GBP/JPY 151.07-62, above 150.65-67 double bottom yesterday, Friday Also mostly below 151.51 descending 55-HMA, 151.55 hourly Ichi cloud base BoE key going forward, seen more hawkish but weak economy may weighUSDJPY Bias: Bullish above 112.50 Bearish below USD/JPY swoons with US yields, Nikkei on Moderna news News Moderna vaccine not as effective against Omicron Risk suddenly off in late Tokyo trading, USD/JPY, Nikkei, US yields off Nikkei currently -0.9% @28,033, yield on US Treasury 10s @1.466% USD/JPY as low as 113.03 before bouncing a bit, high earlier 113.90 Looks like Omicron news to continue to impact thin month-end marketsAUDUSD Bias: Bearish below 0.75 Bullish above AUD/USD dives as Moderna sounds pessimistic on Omicron AUD/USD takes a dive, reversing modest gains, last 0.7112 Close to breaking Aug base 0.7107; would be lowest in a year Ceiling of Bollinger downtrend channel moves lower to 0.7182 Moderna chief predicts Omicron resistant to vaccines Sparks risk-off reaction in some FX, S&P futures -0.6% Uncertainty around new variant still causing volatility

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-november-30-2021"
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Aussie and kiwi slide, yen up on Moderna CEO's Omicron warning

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Speculators' net long U.S. dollar bets hit highest since mid-October - CFTC, Reuters data

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Market Update – November 30– Stocks up down up

Omicron remains in focus and warnings that it will leave current vaccines far less effective and that it will take time to modify and produce new ones has seen markets adjusting growth forecasts and central bank projections.

• USD (USDIndex 96.00 up from 95.92 low),  fresh wave of risk aversion Treasuries sold off, but cautiously with only a modest back up in yields, &  Stocks bounced significantly with the USA100 jumping over 2% intraday with IT a big winner. It closed with a 1.88% gain, with the USA500 1.3% firmer, and the USA30 up 0.68%.
• Wall Street stocks closed higher as investors were hopeful that the Omicron coronavirus variant would not lead to lockdowns after reassurance from US President Joe Biden.
• Moderna’s CEO told the FT that existing vaccines will be less effective and that it may take months before modified vaccines are available at scale. #Moderna +12.73% yesterday.
• US Yields 10- and 30-year rates were up just over 3 bps to 1.51% and 1.859%, respectively, with the 2-yar 1bps higher at 0.508%. 10-year currently corrected -3.9 bp to 1.46% , but it is still in negative territory, at -1.05% on Tuesday, keeping gold’s opportunity cost low.
• Equities – Topix and Nikkei are down -1.0% and -1.6% respectively,  Hang Seng lost -2.3%, the CSI 300 -0.6%, while the ASX outperformed with a modest gain of 0.2%.
• USOil – down by 2%, drifted to $66.73 – after FT cast doubt on the efficacy of COVID-19 vaccines against the Omicron – expectations are growing that OPEC+, will put on hold plans to add 400,000 barrels per day (bpd) of supply in January.
• Gold spiked to $1795 –  World Health Organization said on Monday carried a very high risk of infection surges.
• #TWTR was UP 12% pre-market on news Dorsey was leaving as CEO – it closed DOWN 2.74%. The USA100 rose+1.88%.
• FX markets – Yen rallied (a new flight to safety),Aussie and kiwi slide. USDJPY at 112.94, EURUSD now 1.1326 & Cable steadied to 1.3300-1.3330. 

European Open – The December 10-year Bund future is up 46 ticks, Treasury futures are outperforming and in cash markets the US 10-year rate has corrected -3.9 bp to 1.46% amid a fresh wave of risk aversion.  DAX and FTSE 100 futures are down -1.5% and -1.1% respectively, while a -1.1% drop in the Dow Jones is leading U.S. futures lower. In FX markets both EUR and GBP gained against the dollar. EGB yields had moved higher against the background of improving risk appetite and a jump in German inflation yesterday, but while Eurozone HICP today is likely to exceed forecasts, central bankers have already been out in force to play down the importance of the number for the central bank outlook and rate expectations. Virus developments will also help to take the sting out of the number.

Today – German labour market data, EU Inflation, Canadian GDP and US Consumer confidence are due today. Fed Chair Jerome Powell and Treasury Secretary Janet Yellen are due to testify before the US Senate Banking Committee at 15:00 GMT.

Biggest FX Mover @ (07:30 GMT) AUDJPY (-0.68%) Risk-sensitive currencies slid and safe havens gained. AUDJPY dropped to 80 lows (S2). Currently MAs point rightwards,  MACD signal line & histogram below 0, RSI rising above 30 but Stochastic OS. Hence mix picture intraday.

Click here to access our Economic Calendar

Andria Pichidi 

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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USDJPY – struggling to correct after a heavy fall on Friday

USDJPY, H1

Panic from the emergence of the Omicron variant resulted in the safe haven currency pair falling sharply on Friday from a high above 115.50 to a low of 113.00 and it is now trading back to this key 113.00 level after panic eased but uncertainty remains. The Omicron variant may not be as dangerous as initially thought, however, it is very early in its development. As a result, US stock markets recovered, with the S&P 500 +1.32%, Nasdaq +1.88% and Dow +0.68%, as well as the Nikkei 225 up +0.76% this morning at 28,498 points.

In terms of economic data, Japan’s October jobless rate fell to its lowest point since March of this year at 2.7%, lower than the 2.8% forecast, while October industrial production rose for the first time in four months at 1.1%, benefiting from the reopening of factories reducing supply constraints. However, this increase is still below market expectations of 1.8%.

While it is unclear how virulent the Omicron variant is, yesterday the Japanese government announced another lockdown after having just announced the opening of the country earlier this month, as opposed to the US where President Biden has announced that there are currently no plans to implement lockdown, meaning there will be no new restrictions on travel to and from the US.

US data to keep an eye on today is the Chicago PMI Index, Consumer Confidence Index, Fed Chairman Powell’s Testimony and Treasury Secretary Yellen’s Speech before the Senate Banking Committee on the CARES Act, as well as speeches by FOMC Williams and Clarida.

From a technical point of view, the USDJPY is currently undergoing a correction during the downtrend. The price has been rallying in a narrower frame with a rising wedge pattern trend, meaning the pair is likely to go further down if it breaks the lower band and target the downtrend at the original low of 113.00. Conversely, if the US data is good, the pair could move up to test the week high of 114.00.

Click here to access our Economic Calendar

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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USDJPY, H4 | Potential for Pullback

Type: Bullish BreakoutKey Levels:Resistance: 114.196Pivot: 113.673Support: 113.02Preferred Case:Prices are on bearish momentum. We see potential for a dip from our Pivot at 113.673 in line with 23.6% Fibonacci retracement towards our 1st support at 113.02 which is a graphical swing low and close to our area of Fibonacci confluences.Alternative Scenario:Alternatively, prices may climb towards our 1st resistance at 114.196 in line with 61.8% Fibonacci extension.

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Dollar Down, Near One Week Low, as Omicron Fears Ease

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BTCUSD, H4 | Bearish Continuation

Type: Bearish ReversalKey Levels:Resistance: 59494.65Pivot: :57669.37Support: 53630.53Preferred Case:Price is reacting in between the descending channel, signifying overall bearish momentum. We can expect price to drop from pivot level in line with 78.6% Fibonacci retracement and 127.2% Fibonacci projection towards 1st Support in line with 78.6% Fibonacci projection and overall graphical support.Alternative Scenario:Alternatively, price could push upwards to the 1st Resistance in line with 161.8% Fibonacci projection.

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AUDNZD, H4 | Bearish Continuation

Type: Bearish ReversalKey Levels:Resistance: 1.05014Pivot: 1.04836Support: 1.04309Preferred Case:Price is abiding to the descending trendline resistance, signifying bearish momentum. We can expect price to drop from pivot level in line with 78.6% Fibonacci projection and 61.8% Fibonacci retracement towards 1st Support in line with 38.2% Fibonacci retracement and 78.6% Fibonacci projection.Alternative Scenario:Alternatively, price might push up to 1st Resistance in line with 100% Fibonacci projection.

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XAUUSD, H4 | Bullish momentum!

Type: Bullish BounceKey Levels:Resistance: 1811.937Pivot: 1782.659Support: 1771.62Preferred Case:Prices is on bullish momentum and abiding to our ascending trendline. We see potential for a bounce from our Pivot at 1782.659 which is an area of Fibonacci confluences towards our 1st resistance at 1811.937 in line with 38.2% Fibonacci retracement.Alternative Scenario:Alternatively, prices may dip towards our 1st support at 1771.62 in line with 100% and 127.2% Fibonacci extension.

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Oil markets recover but volatility is never far away

USOil, H1

Oil prices have backed up from Friday’s lows and the front end WTI future saw a high of $72.16 per barrel this morning, as markets mull OPEC action. Russia’s Deputy Prime Minister Novak said a meeting of the OPEC+ joint ministerial monitoring committee “was postponed to get more information about the current events, including the new virus strain”. After speculation of a reaction to the release of strategic oil reserves, the comments added to talk that OPEC+ may postpone the planned increase in output as Novak confirmed that the alliance will discuss “the need for measures.

OPEC’s Joint Technical Committee and the Joint Ministerial Monitoring Committee (JTC and JMMC respectively) will now meet on Wednesday and Thursday (1 and 2 December).  The two committees responsibilities cover different but related areas of the market and need to be completed. The JTC’s role is to make an assessment of energy markets, the supply and demand balance, for OPEC ministers to consider when making cartel policy, whereas the JMMC tracks the compliance of OPEC+ members with their production quotas.

The USOil spot price is currently trading back at $72.24 per barrel and the Futures price at $72.40. Technically, the sell-off from Friday has now recouped the 21-hour moving average $71.50 and is testing the 50.0 Fibonacci level of the daily move at $72.20. Next resistance sits at the 61.8 Fibonacci level at $73.50, which also coincides with the 38.2 Fibonacci level of the larger decline from October highs. Above here sits the key psychological $75.00 level. Immediate support today sits at $71.00, $70.00 and then $69.45, with the Friday level of $67.00 to be watched if the OPEC meetings diverge from expectations later in the week and if more negative Omicron variant news emerges.

Also lifting Oil prices today is a JP Morgan note entitled “OPEC+ ‘Show me the Barrels’ touting possible $150/barrel price spikes by 2023, due to under investment during the last 18 months. More details can be found here:

https://www.forexlive.com/technical-analysis/!/oil-retraces-50-of-the-omicron-rout-20211129

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Weekly Market Outlook 29-11-21

In this Weekly Market Outlook 29-11-21, our analyst looks into the trading week ahead, possible market moving data releases across the globe and the technical analysis to accompany it!

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Cryptocurrencies brace for winter, virtual Adidas and a bitcoin city

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Erdogan’s Audit Board to Probe FX Purchases After Lira Rout

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Too Early to Bet on Rebound

On Monday, risk assets rebounded as reports over the weekend suggest that the bout of Covid hysteria on Friday could be an overreaction. Air travel halts have apparently eased off over the weekend, while the WHO and South African researchers alleviated concerns with a statement that there are no evidences yet that the new Covid strain is more dangerous than dominating delta strain. In this regard, the flow of negative news for the market, mainly related to new shocks in air transportation, is likely to slow down this week.Nevertheless, it is too early to say that correction is over - the lack of reliable data on the new strain should keep risk appetite largely subdued this week. According to the WHO, it will take from several days to several weeks to understand whether a new variant of the virus is more aggressive and resistant to vaccines.With regard to contagiousness, there is a reason for concern. South Africa saw a jump in reported cases of Covid in November before the news about the new strain hit the wires, which may be indirect evidence that the virus is more easily transmitted from person to person:New updates on Covid, important for the markets, will appear today - Britain will gather ministers of the Ministry of Health of the G7 countries to discuss options for response, in the evening Biden will deliver a message. It should help to understand the readiness of the governments to take painful preventive decisions.A barometer of expectations for a tightening of the Fed's policy - long-term rates, halved declines on Monday thanks to the relief rally. The yield on 10-year Treasury bonds rose 7 basis points to 1.54%, and the yield on 2-year bonds also gained about the same amount. European markets rose cautiously – gains do not exceed 1%, and it’s difficult to expect more. The optimism of buyers in the oil market is now mainly based on rumors that OPEC will postpone the planned hike in production by 400K barrels in January, but if we see more reports more countries opted to close borders, a larger drop cannot be avoided.Noteworthy reports this week are Germany's CPI in November (slated for release today), ADP and NFP US November report. In addition, the first two days of the week are full of speeches from Fed representatives (Powell, Williams). Markets are unlikely to be able to react in cold blood to the comments which may touch on the topic of the new strain, as this will call into question the Fed's intentions to accelerate the phasing out of stimulus measures (QE). In general, one way or another, trading in the market this week should be reduced to reactions to news associated with Covid and should be characterized by more or less homogeneous risk-off/risk-on.There is a risk of further decline in EURUSD, since Europe’s bullish rate expectations are under pressure due to recent trend to reinstate lockdowns, besides, it is geographically closer to South Africa and, if the new virus is indeed infectious, a new wave may hit it earlier than the United States. Considering the dollar index (DXY), the pullback after strong growth sets the stage for a further rally towards 97.70, where the next key resistance may reside:

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Analysis - Swiss franc rises to six year high as central bank stands back

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Coronavirus has had less of an impact on UK property than you might think

The UK property market looked to have been turned upside-down as people abandoned city flats to work from more spacious homes in the country, while offices and shops remained shut. But as it turned out, the change was less dramatic. Max King explains.

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Index-linked bonds could prove a costly inflation hedge

Index-linked bonds are designed to keep pace with inflation, but at these prices you are locking in a loss

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Three safe bets on the growing online gambling sector

Professional investor Aaron Fischer, creator of the Fischer Sports Betting and iGaming ETF, picks three of his favourite online gambling stocks.

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Gold Weekly Review

The weakening of the global stock market last week, the sharp decline in global bond yields, the hot ball of inflation and fears of a new virus variant continue to color the fluctuations in metal commodity prices. The new virus variant and increasing cases in Europe could lead to new lockdowns and travel restrictions that will further weaken global economic activity and demand for industrial metals.

Last week’s spot gold price closed lower at $1,788.10 after the previous week’s high of $1,877.15. The metal has fallen about 6% to $1,788.10 in 2021. Inflation, however, has gone the other way with the US consumer price index (CPI) showing prices jumped 6.2% in October from a year earlier, marking the fastest rise in consumer prices in the last 30 years. The price of gold has recently been affected mainly by two fields, i.e. the inflation rate and the prospect of a rate hike, thus making it less bright in 2021.

The price of this asset formed 3 days of directionless trading last week in conjunction with the Thanksgiving holiday, so it is important to pay attention to the actual price direction of any price changes on Monday. If the risk-off mood continues and lacks liquidity and transaction volume, it may lead to the $1,750.00 level.

XAUUSD, D1

The signal that supports the rise in asset prices will be a test of the trend line on the RSI or a rebound from the lower border of the triangle pattern around the support at $1,750.00-$1,758.58. If this scenario fails, the asset price could fall further, while a break of the $1,750.00 price level could extend the correction to the support level of $1,721.59 and the year’s low of $1,676.77. On the upside, asset prices should sit back above the $1,834.00 resistance to confirm value growth. However, the price of $1,800.00 will temporarily become a dynamic resistance, where we can see the 200-day exponential moving average stretch at this price level.

XAUUSD,H4

XAUUSD,H4 – Temporary intraday bias looks neutral below the round number $1,800.00 level but selling pressure cannot be ignored, especially since the price is below the 200-period SMA. If finally there is a break of the ascending trendline (white line) and minor support $1,778.46 it could trigger some selling pressure for a lower price direction at $1,758.58 and $1,750.00. As long as the support at $1,750.00 or the lower trendline (yellow line) of the triangle pattern holds, it is likely that we will see some price fluctuations continue this  week. On the upside, there will be a test of the $1,800.00 round number and $1,815.46 minor resistance before being able to retest the $1,834.00 resistance level and the recent peak.

Overall, asset prices tend to be more in the direction of confirmed consolidation of the transaction data in the form of a slim monthly body candle.

Click here to access our Economic Calendar

Ady Phangestu

Market Analyst – HF Educational office – Indonesia

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Dollar Rebounds; Traders Reassess Omicron Risks

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Market Update – November 29 – Omicron dominates sentiment

• USD (USDIndex 96.30) recovers from Fridays slump (95.98),  Stocks lost over –2.2% in thin half-day trading, Oil FUTS lost –13%, Gold slumped and Yields tanked (10-yr 1.482%) on a safe haven (JPY & CHF bid)  risk off day. (and a strange carry trade bid for EUR). Weekend news, as Countries block flights and tighten restricts, but first Omicron cases in SA appear mild and hospitalizations have not spiked,  has seen a bounce in sentiment and Asian markets. Pfizer suggested it would take 100 days to adapt new vaccine, if required.
• US Yields 10yr trades up 5.1 bp at 1.52%, after Friday’s slump.
• Equities – tanked in thin and short day on Friday USA500 -106.84 (-2.27%) at 45941 – USA500.F trades higher at 4639.
• USOil – collapsed to $67.08 – now up nearly $4 at $71.00. OPEC+ have delayed this weeks meeting by 2 days & likely to delay planned January production increases. 
• Gold spiked under $1780, has bounced to $1795 but struggles to recoup $1800 
• FX markets – EURUSD now 1.1270, after a +125pip rally on Friday, USDJPY now 113.36, from 115.50 to 113.00 on Friday & Cable back to 1.3325. 

Overnight – JPY Retail Sales recover but miss expectations  (0.9% vs 1.2% & -0.5% last time).

European Open – The December 10-year Bund future is down -27 ticks, US futures are also in the red & the US 10-year rate is up 5.1 bp at 1.52%. Stock markets remained under pressure during the Asian part of the session, but DAX and FTSE 100 futures are up 1.2% and 1.3% respectively and a 1.2% rise in the NASDAQ is leading US futures higher. A part reversal of Friday’s flows then as virus developments remain in focus. Travel restrictions are making a come back and the services sector in particular is facing fresh pain, but as Lagarde suggested over the weekend, the impact of Omicron is unlikely to throw economies back to the situation at the start of the pandemic, meaning the overall situation has not really changed. We continue to see the ECB on course to end PEPP purchases on time in March next year, although developments will add to the arguments of those who want to keep the flexibility on the distribution of asset purchases at least for future emergencies. The BoE meanwhile may be postponing the planned rate hike into next year.

Today – German regional and national CPIs, Eurozone Consumer Confidence (final), US Pending Home Sales, ECB’s de Guindos, Schnabel, Lagarde, Fed’s Williams, Powell.

Biggest FX Mover @ (07:30 GMT) CADCHF (1.00%)  The risk-off collapse on Friday 0.7400-0.7200 has recovered to 0.7280. MAs aligned higher,  MACD signal line & histogram rising but still below 0 line, RSI 53.80 & rising H1 ATR 0.0018, Daily ATR 0.0062.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Daily Market Outlook, November 29, 2021

Daily Market Outlook, November 29, 2021 Overnight Headlines Markets Unwind Part Of Friday's Selloff As Variant Fears Ease WHO Urges Caution As South Africa Calls Omicron Variant 'Mild' Biden Told It Will Take Two Weeks For Definitive Omicron Data US Black Friday Store Shopping Drops 28% From Pre-Covid Levels ECB's Lagarde: Euro Zone In Better Shape Facing New Covid Wave ECB's Panetta: ECB Doesn't Need To Intervene On Inflation For Now France Wants To Work With UK On Migration But Won't Be 'Hostage England To Introduce New Omicron Restrictions From Tuesday Japan Retail Sales Boosted By Fuel-Price Spike, Broad Trend Still Soft Australia Q3 Inventories To Drag On GDP, Company Profits Rise RBNZ Chief Economist Doesn't See Omicron Derailing Rate Increases OPEC+ Moves Technical Meetings For Time To Review Market Rout The Week Ahead Uncertainty over Omicron variant to dominate markets Investors were caught off-guard on Friday by news that a potentially more contagious variant of the COVID-19 virus, with the propensity to re-infect, had been spreading quickly in southern African countries. Factors that were previously driving market price action, such as economic data, normalization of monetary policy by major central banks and inflation concerns will now take a back seat to developments in the newly named Omicron variant. It has since been detected in different parts of the world and countries have already begun to tighten border restrictions, although the World Health Organisation says it could take weeks to understand the level of severity of the variant. Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen are due to speak this week and the market will pay close attention to their take on the latest phase of the coronavirus pandemic. U.S. jobs lead busy calendar but COVID in focus There is a packed global economic data calendar this week, led by U.S. non-farm payrolls. Normally the U.S. jobs report and other top-tier data would help shape market direction, but concerns over the Omicron variant and government reactions will probably push the numbers into the background. November non-farm payrolls on Friday are expected to show a healthy 550,000 increase in jobs, according to the latest Reuters poll, while unemployment is seen easing to 4.5% from 4.6% in October. The closely watched average hourly earnings component is expected to rise 0.4% month-on-month, the same as October. Other key U.S. data includes ISM manufacturing and non-manufacturing, consumer confidence, factory orders, ADP employment, Chicago PMI and CaseShiller home prices. Europe's calendar includes euro zone sentiment indices, final November PMIs and consumer confidence, flash HICP inflation data, October retail sales and unemployment. German inflation and unemployment are also due. The UK has final PMIs and Nationwide house prices. China's November PMIs are due this week, with the official manufacturing PMI expected to improve to 49.6 from 49.2 in October, while the Caixin version is expected to ease to 50.5 from 50.6. Japan released October retail sales on Monday; industrial production, employment, business capex and November PMIs are due during the week. Australian data will be led by Q3 GDP, with building approvals and current account also on tap. New Zealand has business sentiment and terms of trade, while Q3 GDP, November PMI and jobs data are due in Canada.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )- USDJPY - 115.70 543m. 113.40/50 711m. 113.20/30 785m. 111.40/50 460m.- EURUSD - 1.1570 410m. 1.1490/1.1500 780m. 1.1460/70 1.06bn (839m C). 1.1440/50 667m. 1.1350 537m. 1.1300 1.70bn (954m P). 1.1250/70 1.51bn (1.02bn P). 1.1190 469m. 1.1150/60 529m.- GBPUSD - 1.3750 662m.- AUDUSD - 0.7100 799m.- USDCAD - 1.2600 1.23bn (840m P).- EURGBP - 0.8600 431m.- USDCHF - 0.9270 1.07bn (1.01bn C).- USDTRY - 11.50 540m.- USDCNH - 6.39 645m. 6.36 460m.Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above Weakens in Asia as Friday's risk selloff reverses EUR/USD opened 1.1310 after rising 1% Friday when Omicron news shook markets After rising to 1.1335 the EUR/USD tracked lower as risk assets moved higher E-minis rose around 1.0% while the AXJ equity index only eased 0.15% Report from S. Africa Omicron symptoms may be less severe underpinned risk US Treasury yields moved higher with 10-year yield rising 6 BPs to 1.54% EUR/USD moved below 10-day MA at 1.1280 and is at session low at 1.1277 Bids are tipped at 1.1225/30 with support at Friday's 1.1205 low Resistance is at the 38.2 of the 1.1692/1.1186 move at 1.1379 Trading likely to remain choppy as Omicron uncertainty overhangs marketGBPUSD Bias: Bearish below 1.36 Bullish above. GBP remains in stasis in Asia, awaiting London open GBP pairs did little in Asia, cable in tight 1.3325-42 range, quiet GBP/JPY choppy at time with other JPY pairs but also in range GBP/JPY 151.08-91, market thin, actual flows few and far between Month and fiscal year end for hedge funds putting crimp on trading GBP/USD between 55/100-HMAs at 1.3326/46, in 1.3319-43 hourly Ichi cloud GBP/JPY holding mostly under 151.60 hourly Ichi kijun, 150.67 low FridayUSDJPY Bias: Bullish above 112.50 Bearish below USD/JPY slumps into Europe open with market again risk off Market risk-off in Asia PM trade, Nikkei off early, rebounds, off again At @28,283, Nikkei closes off 1.6% on day, E-Minis still +0.8% @4631 Month-end and hedge fund fiscal year-end flows may be affecting trade Markets on thin-side anyway following long US Thanksgiving weekend for many USD/JPY from 113.88 EBS Tokyo fix high to 113.09 so far, 113.05 low Friday US yields haven't moved much - gap up then mostly steady, Tsy 10s @1.522% Option expiries still supportive, total $1.7 bln 113.00-50AUDUSD Bias: Bearish below 0.75 Bullish above Moves higher as Asian markets calm after Friday's rout AUD/USD opened 0.7118 after falling 1.0% Friday on fresh COVID fears Early AUD/JPY buying sent AUD/USD up to 0.7149 before 0.7150 sellers capped It fell back to 0.7115 before rising again on rally in some risk assets Reports Omicron strain symptoms less severe resulted in relief rally E-minis rose 1.0% while oil bounced nearly 5% and Lon copper rose 1.45% AUD/USD settled around 0.7140/45 heading into the afternoon

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-november-29-2021"
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S&P500 Approaching an Important Level: What’s Next?

Good day,Brent oil broke the 77.82 supporting level, targeting the 70-level next. Oil should approach the broken downtrend, but it might head North and test the broken trendline first.Euro got back in the downtrend, closing Friday with a long white candle. It seems that asset’s price might undergo a correction and jump at the beginning of next week, targeting the level of 1.1500.American stock index S&P 500 is approaching the level of 4550 which is where this asset could get a very strong support and jump. Should the index manage to break this level and undergo correction, it might drop. So, the price movements around the supporting level of 4550.00 are worth watching.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/sp500-approaching-an-important-level-whats-next"
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BTCUSD, H4 | Bearish Continuation

Type: Bearish ReversalKey Levels:Resistance: 59497.18Pivot: 57728.9Support: 53640.24Preferred Case:Price is reacting in between the descending channel, signifying overall bearish momentum. We can expect price to drop from pivot level in line with 78.6% Fibonacci retracement and 127.2% Fibonacci projection towards 1st Support in line with 78.6% Fibonacci projection and overall graphical support.Alternative Scenario:Alternatively, price could push upwards to the 1st Resistance in line with 161.8% Fibonacci projection.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/btcusd-h4-or-bearish-continuation-29thnov"
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USDJPY, H4 | Potential for Bounce!

Type: Bullish BounceKey Levels:Resistance: 114.286Pivot: 113.685Support: 113.048Preferred Case:Prices have recently experienced and extreme dip and are currently testing our Pivot at 113.685 which is a graphical overlap and in line with 23.6% Fibonacci retracement. We see potential for upside towards our 1st resistance at 114.286 in line with 61.8% Fibonacci extension and 50% Fibonacci retracementAlternative Scenario:Alternatively, prices might dip towards our 1st support at 113.048 which is an area of Fibonacci confluences.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdjpy-h4-or-potential-for-bounce-29thnov"
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XRPUSD, H4 | Bearish Momentum!

Type: Bearish ReversalKey Levels:Resistance: 1.03Pivot: 0.98Support: 0.88Preferred Case:Prices are on bearish momentum and consolidating in a parallel channel. We see potential for a dip from our Pivot at 23.6%, 50% and 127.2% Fibonacci extension towards our 1st support at 0.88 in line with 61.8% Fibonacci extension.Alternative Scenario:Alternatively, prices might climb higher towards our 1st resistance at 1.03 in line with 78.6% Fibonacci retracement.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/xrpusd-h4-or-bearish-momentum"
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AUDCHF, H4 | Short-term Bullish

Type: Bullish BounceKey Levels:Resistance: 0.66942Pivot: 0.66001Support: 0.65606Preferred Case:Price is reacting in between the ascending trendline support on the daily and descending trendline resistance on the H4, potentially forming a triangle pattern. We can expect price to make a bounce from the pivot level in line with 23.6% Fibonacci retracement towards 1st Resistance in line with graphical overlap, 50% Fibonacci retracement and 100% Fibonacci projection.Alternative Scenario:Alternatively, price could push further down to 1st support in line with ascending trendline support on the daily.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/audchf-h4-or-short-term-bullish"
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Dollar Up, Recovers from Omicron Shock but Volatility Remains

from Forex News https://www.investing.com/news/forex-news/dollar-up-recovers-from-omicron-shock-but-volatility-remains-2692267
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Currencies recover from Omicron chaos but analysts warn more volatility ahead

from Forex News https://www.investing.com/news/forex-news/currencies-recover-from-omicron-chaos-but-analysts-warn-more-volatility-ahead-2692226
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Key economic events and reports of the week ahead

The new strain of covid found in South Africa could disrupt plans by governments and central banks to rebuild economies. Financial markets are starting to price in possible new social and travel restrictions in asset prices and it is unlikely that there will be certainty about possible threats of the new strain in the next week. Consequently, sellers will continue to control the market situation and defensive assets will likely continue to rise next week.Fed Chairman Jeremy Powell will speak next Monday and Tuesday. Markets will closely monitor whether the head of the Fed speaks about the risks of a pandemic. If so, it should heighten investor attention to news related to the new strain.On Tuesday and Wednesday, attention should be paid to the PMI data for China in the manufacturing and services sectors. The state of affairs in Asia's largest economy will determine optimism about how long the expansion of the world economy, which is based on the rise of the Chinese economy, can last.On Wednesday and Friday, data on the US labor market will appear - the report of the ADP and Non-Farm Payrolls. Good rates of employment growth are likely to ensure an acceleration in the pace of reducing purchases of assets by the Fed, which was mentioned in the minutes of the Fed meeting in November. In this case, the dollar may open its second wind and its growth will continue. Among the large Central Banks, only the Fed is actively curtailing stimulus, which leads to a widening of the difference in interest rates between the United States and other countries.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/key-economic-events-and-reports-of-the-week-ahead-29-11-2021"
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Why Britain’s supermarket chains should take over Europe

Britain’s supermarkets should not sit back and wait for a takeover bid, says Matthew Lynn. They should launch their own for the continent’s chains.

from Moneyweek RSS Feed https://moneyweek.com/investments/stocks-and-shares/retail-stocks/604144/uk-supermarket-chains-takeover-bids-in-europe
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Analysis-In Japan, a weaker yen may not be the blessing it once was

from Forex News https://www.investing.com/news/economy/analysisin-japan-a-weaker-yen-may-not-be-the-blessing-it-once-was-2690534
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Investor start to flee equity funds

Equity funds saw an outflow of investor funds for the week ending November 24. This is the second weekly outflow in this year, according to BofA's weekly report released on Thursday, which may potentially indicate a shift in investor preferences of risk.In 2021, investors have poured more than $1 trillion in equities. This amount is bigger than in the last 19 years combined, BofA analysts say, citing EPFR data.The outflow of funds last week was triggered by the rise in bond yields and strengthening of US Dollar. Also signs of emerging risks related to new Covid strain could be a trigger of sales.Investors pulled out more about $3.9 billion from emerging market bond and equity funds – this is the biggest outflow since May 2020.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investor-start-to-flee-equity-funds"
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The charts that matter: the US dollar keeps on strengthening

The US dollar saw further rises this week as gold and cryptocurrencies sold off. Here’s how that has affected the charts that matter most to the global economy.

from Moneyweek RSS Feed https://moneyweek.com/economy/604169/the-charts-that-matter-the-us-dollar-keeps-on-strengthening
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Rafal Brzoska: the “Locker King” seeking to conquer Britain

Polish entrepreneur Rafal Brzoska’s company almost drowned in debt before being rescued and refocusing on its big idea – automated postal boxes. He is relishing a scrap with Amazon to corner the market.

from Moneyweek RSS Feed https://moneyweek.com/economy/people/604158/rafal-brzoska-the-locker-king-seeking-to-conquer-britain
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Two outstandingly cheap UK stocks in an age of mad valuations

In these times of nutty company valuations, there is still plenty of opportunity around, says Merryn Somerset Webb. Take these two stocks, for example.

from Moneyweek RSS Feed https://moneyweek.com/investments/stockmarkets/uk-stockmarkets/604168/two-outstandingly-cheap-uk-stocks-in-an-age-of-mad
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Dollar's Dazzling Run to Come Unstuck Next Year as Growth Outside U.S. Rebounds

from Forex News https://www.investing.com/news/forex-news/dollars-dazzling-run-to-come-unstuck-next-year-as-growth-outside-us-rebounds-2689835
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Events to look out for next week

A new, “more mutated” and possibly more infectious covid variant out of South Africa weighed heavily on equities and boosted the demand for bonds on Friday, removing the feel good factor from strong US data earlier and the assumption the FED was tilting further into the hawkish camp with a possible faster taper and multiple rate hikes in 2022. A very cautious tone will likely prevail next week. Data will be topped by NFP on Friday and an expected continued tight jobs market.

Monday – 29 November 2021

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• German Preliminary CPI (EUR, all-day from GMT 07:00) – The German federal states will be releasing inflation data throughout the day and with a record leap for Import prices on Friday. last month the m/m there was 0.5% increase, 0.7% expected.
• Pending Home Sales (USD, GMT 15:00) –  New Home Sales cooled last Thursday recording a still strong 845K but well below the 801K expected. The pending homes sales number can be volatile as home buyers can drop from registrations without consequence. last month pending home sales fell -2.3%, -2.5% expected.

• Speeches – BOJ Gov Kuroda & Fed Chair Powell (JPY & USD, GMT 06:00 & 20:05) –  

Tuesday – 30 November 2021

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• Manufacturing & Non-Manufacturing PMIs (CNY, GMT 01:00) – Manufacturing PMI’s have been in contraction mode since September will a tick over 50 be seen today? Conversely, Non-Manufacturing PMIs have been in expansion for the last two months showing more resilience.
• CPI Flash Estimate y/y  (EUR, GMT 10:00) – Annualized EZ Inflation was running at 4.1% last month and with energy costs spiking this month the reading is expected to top 4.5%.
• Gross Domestic Product m/m (CAD, GMT 13:30) – a rise to 0.7% from 0.4% last month is expected and the annualized figure is expected to leap from a contraction of -1.1% to 2.5%.
• Fed Chair Powell Testifies (USD, GMT 15:00) Due to testify on the CARES Act before the Senate Banking Committee, in Washington DC.

Wednesday – 01 December 2021

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• Gross Domestic Product – Q3 (AUD, GMT 00:30) – The Australian economy was severely restricted during Q3 as lockdowns in Melbourne & wider Victoria persisted, and GDP sank to lows of 0.7% in September from 3.3% in December 2020. A further fall to 0.5% is expected.
• ADP Non-Farm Employment Change (USD, GMT 13:15) – Private payrolls have been very volatile i the last few months, 571K new jobs were registered last month and this month it is expected to have declined to 460K, however, there have been some big misses and beats for this key data point as the US economy moves forward.
• ISM Manufacturing PMI (USD, GMT 15:00) – This key data point from the ISM has been expanding steadily and a further rise is expected to 61.00 this month from 60.8 last time.
• Fed Chair Powell Testifies (USD, GMT 15:00) Second day of testimony on the CARES Act before the Senate Banking Committee, in Washington DC.

Thursday – 02 December 2021

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• OPEC-JMMC Meetings (ALL, GMT All Day)– Following the US led, coordinated release of millions of barrels of strategic reserves by 6 countries, this months OPEC meeting may have added spice. However it is likely that the cartel keep production at current levels resisting pressure from the White House and elsewhere to pump more crude.
• Weekly Claims (USD, GMT 13:30) Following last weeks 52-year low reading at only 199K this weeks number is eagerly awaited. Seasonality factors apart, the evidence of the tight US jobs market continues, a more economic cycle average is 250-60K.  

Friday – 03 December 2021

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• Non-Farm Employment Change (USD, GMT 13:30) – Expectations are for a 440k November nonfarm payroll increase, after gains of 531k in October, 312k in September, and 483k in August. The Unemployment rate is expected to hold steady at 4.6%, Annualized Earnings to increase again to 5.0% from 4.9% and the all important participation rate to struggle to move over 61.6%.
• Employment Change (CAD, GMT 13:30) Canada generated 31.2k news jobs last month, a miss of expectations of 42.0k and a huge decline from the 157.1k from October. The Unemployment rate is expected to hold at pandemic lows at 6.7%.
• ISM Non-Manufacturing PMI (USD, GMT 15:00) – This key data point from the ISM has been volatile recently and a decline this month is expected to, a still very healthy 65.7 from 66.7 last month.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /290074/
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