America Roundup: Dollar Undoes Losses, Wall Street Falls, Gold Gains, Oil Prices Fall January 21, 2022

Market overview

• US initial unemployment claims 286,000, forecast 220,000, previous 230,000

• US jobless claims 4-week average 231.00K, previous 210.75K

• Continuing US Unemployment Claims 1,635,000, 1,580,000 forecast, 1,559,000 previous

• Canada ADP Non-Farm Employment Change 19.2K, previous 231.8K

• US Jan Philadelphia Fed Manufacturing Index 23.2, 20.0 forecast, 15.4 previous

• US Jan Philly Fed CAPEX Index 26.20,20.00 previous

•Philadelphia Fed price in US paid 72.50, 66.10 previous

•US Philly Jan Fed Employment 26.1,33.9 previous

• US Existing Home Sales in December (monthly) -4.6%, previous 1.9%

• December existing home sales in the United States 6.18 M, 6.44 M forecast, 6.46 M previous

• Crude oil inventories in the United States 0.515 M, -0.938 M forecast, -4.553 M previous

Forward-looking economic data

• No data available

Future Outlook – Events, Other Releases (GMT)

• No significant event

Currency summaries

EUR/USD: The euro fell on Thursday as money markets slightly withdrew bets on rate hikes and the European Central Bank appeared divided on the inflation outlook Record inflation in the euro zone and an economy which is recovering from the COVID-19 pandemic that allows the ECB to scale back monetary stimulus that has depressed the bloc’s bond yields for years. The bets are at odds with the ECB’s economic projections and suggestions from policymakers that the bank will not raise rates this year. The euro slipped 0.06% to $1.1303, its weakest level since Jan. 10. Immediate resistance can be seen at 1.1332 (38.2% fib), a break up can trigger a rise towards 1.1371 (23.6% fib). support is seen at 1.1300 (50% fib), a break below could take the pair towards 1.1267 (61.8% fib).

GBP/USD: The pound plunged against the dollar on Thursday as investors assessed whether . Money markets are currently pricing in more than 100 basis points (bps) of interest rate hikes in 2022 and an 87% chance of a 25 bps increase in February, after data showed on Wednesday that inflation in the UK rose faster than expected to hit its highest in nearly 30 years in December. Domestic politics are not detrimental to sentiment, after Prime Minister Boris Johnson rejected calls to resign on Wednesday. The pound was down 0.09% against the greenback at $1.3586. Immediate resistance can be seen at 1.3608 (5DMA), a break up can trigger a rise towards 1.3638 (38.2% fib). On the downside, immediate support is seen at 1.3577 (50% fib), a break below could take the pair towards 1.3539. (21DMA).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Thursday as equity markets recouped some of this week’s losses and investors weighed the prospects of a US interest rate hike. Bank of Canada next week. US crude prices fell 0.2% to $86.75 a barrel on indications of a rise in US equities and as investors took profits after a recent rally in prices. Canadian retail sales data, due Friday, may offer more clues to the strength of the domestic economy. The Canadian dollar was trading up 0.3% at 1.2479 against the greenback, after trading in a range of 1.2476 to 1.2516. Immediate resistance can be seen at 1.2535 (38.2% fib), a break up can trigger a rise towards 1.2599 (23.6% fib) On the downside, immediate support is seen at 1.2487 ( 50% fib), a break below could take the pair towards 1.2433 (61.8% fib).

USD/JPY: The dollar fell against the Japanese yen on Thursday as fears of Fed tightening spooked investors. Fear that the Federal Reserve will take aggressive action to raise rates this year is weighing on the market. Investors are eagerly awaiting the US central bank’s policy meeting next week for further details on how it will tackle inflation. On the data front, the number of Americans filing new claims for unemployment benefits hit a three-month high last week, likely as a winter surge of COVID-19 infections disrupted activity. trade, which could weigh on employment growth in January. A strong resistance can be seen at 114.25 (38.2% fib), a break up can trigger a rise towards 114.85 (23.6% fib). On the downside, immediate support is seen at 113.75 (50%fib), a break below could take the pair down to 113.24 (61.8%fib).

Summary of actions

European equities closed broadly higher on Thursday as investors engaged in some cross-border buying, shrugging off concerns over inflation and concerns over impending interest rate hikes.

Britain’s benchmark FTSE 100 closed down 0.06%, Germany’s Dax ended up 0.65%, France’s CAC ended the day up 0.30%.

Wall Street’s major indexes ended sharply lower on Thursday and a rally in U.S. stocks evaporated late in the session as investors questioned whether stocks were a bargain after a sell-off early in the year that saw the Nasdaq fall into correction territory.

The Dow Jones closed 0.89%, the S&P 500 closed 1.10%, the Nasdaq stabilized 1.30%.

Summary of treasury bills

U.S. Treasury yields were flat on Thursday, after falling to their highest level in two years on Wednesday, following a rapid sell-off sparked by anticipation of a more hawkish Federal Reserve that sparked fresh buying interest .

Yields on the 10-year benchmark notes were last at 1.825%, after hitting 1.902% in overnight trading on Wednesday, which was the highest since January 2020.

Summary of raw materials

Gold hit two-month highs on Thursday, buoyed by concerns over inflation and Russian-Ukrainian tensions

Spot gold rose 0.1% to $1,841.45 an ounce at 1:43 p.m. ET (6:43 p.m. GMT), its highest level since Nov. 22. US gold futures settled at $1,842.60.

Oil fell slightly on Thursday, posting small losses after several days of strength that pushed benchmarks to seven-year highs on concerns over tight supply.

Brent crude futures fell 6 cents to $88.38 a barrel. U.S. West Texas Intermediate (WTI) crude futures for February delivery fell 6 cents to $86.90

Steve R. Hansen