Overall market expectations this week

 Overall market expectations this week

Overall market expectations this week.

Spread the love

Gold retreated from a bullish week on Fed Governor Waller hawkish comments on the need for faster tapering of the quantitative easing (QE) program. Subsequently markets have had an upshift in the expectation of the US interest rate path going into 2022. This expectation has also been reflected in the Treasury yields curve with a steepened front end with the belly and the long end of the curve flattened.

The front end of the curve refers to short-dated interest rates from 3 months to 2-year, the Belly (middle part of the interest rate curve) refers to mid-term dated interest rates 2-year to 5-year and the far end of the interest rate curves (long-end) refers to longer dated interest rates 5-year to 10-year.

With Gold currently trading at $1840 with a possible continuation of the retreat toward a key support level at $1830 markets will be looking for further direction in the fundamental data in the week ahead.

EURUSD has also suffered from hawkish comments from the US Fed Governor Waller with the USD bullish momentum. With the possible interest rate path in US steepening going into 2022 in comparison to the Eurozone, dovish comments from ECB President Christine Lagarde and the resurgence of Covid-19 cases pushing much of Europe into possible lockdown, the USD may continue the bullish momentum against the Euro.

Currently trading at EURUSD 1.1286, with the following US data expected in the week, PCE inflation gauge, November’s Purchasing Managers’ Index (PMI) survey data and revised Q3 GDP data. Should the combination of the data print be inflationary, Gold and the Euro might likely continue their bearish momentum as markets bet on a hawkish US monetary policy which will likely be bullish for the USD.  With EURUSD breaching a key support level at 1.1290, a close below this brings 1.1282 and subsequently a possible move toward 1.1255.

Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience or current financial situation. Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analysis. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis.

Terence Hove

Terence Hove, a Financial Markets Analyst with multi-asset brokerage firm Exness completed his BBusSci: Economics at Monash University. With over 8 year experience within financial service his expertise is well developed in financial markets analytics and trading. Exness is an industry leader that provides reliable online trading in financial markets. Exness offers professional services on the above-mentioned assets, please follow the link to learn more on the offering exness.com

Related post