• Alphachain Team

Greenback Gains on Sour Risk Tone

Last week saw the greenback gain on a largely sour risk tone given the fading hopes of a US Stimulus deal before the US election which is less than 3 weeks away. Going into the week ahead, US House Speaker Pelosi eluded to her renewed optimism on hopes for a deal after signalling a 48-hour deadline on Sunday encouraging negotiators to come to an agreement before the election takes place. The week ahead will see earnings being released for the third quarter with figures set to be released from Barclays, Unilever, Tesla and Netflix in the coming days. New Zealand PM Ardern won by a landslide victory in the nation’s general election after the Labour Party won 49.1% after all votes were counted bringing a rare outright parliamentary victory.

UK officials are set to be preparing to soften PM Johnsons Brexit legislation, this move could potentially rekindle negotiations with the EU after PM Johnson outlined last week that he is happy to walk away without a deal. Talks of an Australian style agreement has intensified in recent weeks with UK cabinet Minister Michael Gove outlining that it is an outcome that the UK is becoming increasingly prepared for. Nonetheless, talks are set to continue again this week with Brexit negotiator Frost outlining his intention to meet with EU negotiator Barnier. Sterling volatility has surged as a result with EUR/GBP trading indecisively around the 0.9050 handle whilst Cable finished the week sub 1.3000 after trading above the level earlier on during last week’s session.


WTI crude

WTI crude faced a volatile week as price whipsawed between $39 – 41.25/bbl meaning that the week closed with a rather strong long-legged Doji. The week ahead kicks off with the JMMC Meetings. This meeting will be crucial for market participant’s as they will likely fixate on the news surrounding undercompliance within the month of September from some OPEC members. Market participants will also keenly focus on any pointers surrounding current output levels as OPEC+ reportedly plans to scrap its current plans to ease outputs cuts in January. Rising production in Libya is also set to take precedence within the meeting as ministers look to ensure a sustained production recovery within the nation. The meeting will likely bring some further clarity to the oil market that has been clouded by demand fears due to a resurgence in Covid-19 cases.


Bullion

A stronger dollar last week led to Bullion trading lower as the commodity closed just below the $1,900/oz level. Going into the week ahead, price still remains subdued beneath a technical trendline whilst trading between its daily 8 and 21 EMA.


Cryptocurrency

Within the cryptocurrency space, BTCUSD traded indecisively last week after price continued to stabilise above the $11,000 handle. Going into the week ahead the crypto asset sits above its daily 8 and 21 EMA. $12,000 remains the next target in sight for crypto enthusiasts. The rise in Bitcoin was matched in Ethereum as the cryptocurrency managed to hold above the $365 handle, key resistance for the asset remains around $390 going into the week ahead.

Here is a breakdown of the high impact data releases this week.

Monday

All Day OPEC-JMMC Meetings. Markets to watch: All

13:00 FED Chair Powell Speaks. Market to watch: USD Crosses

Tuesday

13:30 Monetary Policy Meeting Minutes. Markets to watch: AUD Crosses

Wednesday

13:30 CPI m/m. Markets to watch: CAD Crosses

Thursday

10:25 BOE Gov Bailey Speaks. Markets to watch: GBP Crosses

Friday

08:15 French Flash Services. Markets to watch: EUR Crosses

08:30 German Flash Manufacturing/Services PMI. Markets to watch: EUR Crosses

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