Last week, news that China declared crypto-related transactions and activities a crime caused meltdowns in most digital assets in the market. However, over the weekend, most crypto assets recovered losses. At the time of writing, Bitcoin was trading around $44,000.
Euro and the US Dollar
The dollar recorded losses last week. The Bank of England announced that it will start raising interest rates in November and caused – according to Bloomberg – investors to find more confidence in the British authority than in the Federal Reserve (Fed).
Fed Chairman Jerome Powell announced that tapering would come ‘soon’ and pointed to November as a possible start for cuts. However, according to Bloomberg, investors are more concerned about the crisis brewing in China than the Fed’s comments. This could weaken the dollar.
On the other hand, the euro, the US dollar’s main counterpart, held steady awaiting the results of the German elections. One of the European Union’s largest economies, Germany, held parliamentary elections yesterday. The retirement of its former leader, Angela Merkel, after 16 years in power, seems – according to voting polls – to leave a parliament with a narrow social democratic (SPD) majority.
Crude Oil and Metals. Brent reaches highs since 2018
In the commodities market, crude oil is on the rise amid rumors of lack of supplies and an energy crisis. West Texas Intermediate (WTI) rose above $75 per barrel, and its counterpart, Brent Crude touched highs not seen since October 2018. Rumors of a supply crisis in the UK appear to have boosted North Sea Crude Oil prices. The EIA United States Crude Oil Stocks Change is schedule to be published on Wednesday, this week. Investors are likely to have this commodity on their watch list.
Gold rose by 0.1% and silver by 0.3%. In contrast, palladium, which rose by 0.3%, headed for its third consecutive weekly decline. Platinum also fell by 1.1%.
Things to Focus on for The Week
A few events taking place this week will probably land on traders’ watch lists as they carry the potential to affect asset prices. The outcome of the German elections and European Central Bank President, Christine Lagarde’s speech on Tuesday could affect the price of the euro.
The Japanese yen may be affected by the election of a new leader for the Japanese parliament. The Tankan Large Manufacturing Index and Tankan Large Non-Manufacturing Index are scheduled to be released on Friday.
This Week’s Economic Highlights:
Monday
- United States Core Durable Goods Orders m/m
- United States Durable Goods Orders m/m
- Nationwide the United Kingdom House Price Index (HPI) y/y and m/m
- Federal Open Market Committee (FOMC) Member Williams Speech
Tuesday
- Bank of Japan (BoJ) Monetary Policy Meeting Minutes
- Australia Retail Sales m/m
- GfK Germany Consumer Climate
- The Conference Board United States Consumer Confidence Index
- Hong Kong Trade Balance
- Sweden Goods Trade Balance
Wednesday
- United States Pending Home Sales m/m
- The EIA United States Crude Oil Stocks Change
- Germany 10-Year Bond Auction
- Spain Harmonised Index of Consumer Prices (HICP) y/y / Spain Consumer Price Index (CPI) m/m
Thursday
- Japan Retail Sales m/m / Bank of Japan (BoJ) Governor Kuroda Speech
- China Manufacturing Purchasing Managers Index (PMI)
- China Non-Manufacturing Purchasing Managers Index (PMI)
- China Composite Purchasing Managers Index (PMI)
- United Kingdom Gross Domestic Product (GDP) y/y
- United States Gross Domestic Product (GDP) q/q
Friday
- Bank of Japan (BoJ) Tankan Large Manufacturing Index (TMI)
- Bank of Japan (BoJ) Tankan Large Non-Manufacturing Index
- Canada Gross Domestic Product (GDP) m/m
- ISM United States Manufacturing Purchasing Managers Index (PMI)