Weekly outlook for 6-10 February 2023.
World major central bank chairman statement, expect to bring clutter next week.
The world Major central bank policy decision, economic data and EU-Russian jitters have witnessed significant movement in currencies, Crude oil and bullions prices last week.
Greenback tumbled to an over nine-month low against a basket of currencies after the Fed hiked interest rates by a relatively smaller 25 basis points (bps) and acknowledged its progress against inflation. But the central bank also expressed uncertainty over where interest rates will peak at the same time Yellow metals jumped to the nine month high. Greenback was also pressured by anticipation of interest rate hikes by the European Central Bank and the Bank of England, which bolstered the euro and the pound. Both banks are expected to hike rates by 50 bps each and signal more incoming hikes as they move to contain high inflation. But rising interest rates are also likely to further pressure global economic growth, which, coupled with perceived weakness in the dollar, benefits gold’s status as a safe haven.
However, the dollar pulled back from its nine month low and yields on the U.S. 10-year Treasury note surged on the back of the newfound strength in the labor market, which could make the Fed rethink further consolidating its rate hikes for this year.
COMEX GOLD futures jumped to a weekly high of $1975.20 an ounce, and settled at $1876.60 an ounce. It made a weekly low $1874.50 an ounce. While, MCX GOLD future made a life time high 58847 and made a weekly low 56544, before closing at 56585.00
Crude Oil witnessed its biggest weekly fall since 23 January 2023. On Friday, Crude oil dropped below its three-week lows, as after strong U.S. jobs data raised concerns about higher interest rates.
At the same time, European Union and Russian Refined deal news also weighed on sentiment.
MCX CRUDE Future drop 6.29%, biggest weekly fall since 5 December 2022. MCX CRUDE OIL made a high of 6542 and made low 6075 before closing at 6097.
Brent Crude oil futures fell more than 7% and settled at $79.73 a barrel from previous close of $ 86.05, a barrel after rising to a session high of $84.20. It hit a weekly low of $79.69, its lowest since Jan. 11. U.S. West Texas Intermediate crude (WTI) ended down $6.19, or 7.80%, at $73.18. its lowest since 5 January 2023.
Natural gas futures tumbled more than 15% for the week. Heating fuel continued its descent into a seemingly bottomless abyss despite the arrival of freezing weather in the key Northeastern U.S. region, which until this week had experienced an unusually warm winter. MCX Natural GAS settled at 201.30, after hitting a low 197.30.
Base Metals also remained negative. MCX Copper futures settled down by 1.55% at 771.40. Copper Future retreated from weekly high 789 and low 769.60. Aluminum Future settled down by 0.87% at 223.30 as compared to the previous week close of 225.25. Lead Future retreated 1.87% from weekly high 188.15 and settled at 183.95.
High impact data and events for week ending 10 February 2023
Tuesday
Next week Economic data will start with the Reserve Bank of Australia Policy meeting, due at 9:am on Tuesday. RBA expected to hike the cash rate to 3.35% from 3.10%. This will have a positive impact on the dollar and a negative impact on bullions.
At 10.30 pm – Fed Chair Powell Speaks and BOC Gov Macklem Speaks at 11:pm will expect to bring volatile momentum for the entire market.
Wednesday
At 11.am –Reserve Bank of India Rate decision will bring volatility in the domestic market. Expectation 0.25% hike to 6.50%).
At 7.45pm – FOMC Member Williams Speaks is due which will give clutter for dollar and bullion prices.
At 9: pm – Crude Oil Inventories will have a strong impact on dollar and crude oil prices.
Thursday
At 3.15pm – Bank of England Monetary Policy Report Hearings are due. This will have a significant impact on the Pound and dollar.
At 3.30pm – EU Economic Forecasts will have a volatile impact on Euro, dollar and bullion.
At 7pm- US weekly Unemployment Claims are due. Data foreseen slightly higher at 191k from the previous 183k, this will have a negative impact on the dollar.
Friday
At 7.am – China CPI y/y to be released. Data is foreseen 2.2% compared to previous reading 1.8%. A higher than previous data could have a positive impact on base metals.
At 12.30pm – UK GDP m/m to be released. Data is foreseen negative at -0.3% as compared to 0.1% previous month reading. This could have a negative impact on Pound and Metal.
At 7:pm – Canada Employment Change data to be released. Data foreseen at 15.0K as compared to previous 104.K. Data expects to have a positive impact on Base Metal. However, Unemployment Rate data indicates negative impact on metals as data foreseen slightly higher at 5.1% from previous reading 5.0%.
At 8.30pm – US Prelim UoM Consumer Sentiment will have a neutral Impact on dollar and bullions. As data foreseen it was slightly higher at 65.0 compared to previous reading 64.9.
Market sentiment will depend on what the statement will come out from the major central bank chairman. Adding to this, CRUDE OIL fluctuation also will impact dollar and bullion prices next week too.