A wave of risk aversion surprised traders last week, pushing down benchmarks and sentiment-sensitive currencies. Investors weighed Covid concerns and the risks of Chinese contagion against a faltering global economic recovery. Growth-sensitive tech stocks led to losses on Wall Street, as the Nasdaq 100 index fell 0.69% on the week.
Evergrande, a Chinese real estate titan, is under severe stress, threatening all of China’s real estate and financial markets. The Chinese company has less than $ 300 billion in debt, making it the most indebted real estate company in the world. Credit markets are shaken by contagion risks, with major banks halting loan issuance to real estate developers in China. Chinese retail sales in August fell short of expectations, adding to the headwinds of sentiment.
The safe haven US dollar posted entries throughout the week as traders digest fragile global risk factors, with the US dollar DXY index gaining 0.64%. Risk-sensitive currencies weakened, notably the Australian dollar and the New Zealand dollar. Yields on Treasuries climbed amid impressions of strong national data. US retail sales and consumer confidence measures increased from July, showing some relative strength in the economy. Gold fell for a second week against the stronger greenback, along with fears of further Fed tightening.
This week brings a heavy economic record, with several far-reaching central bank decisions. The Bank of Japan (BoJ), Federal Reserve and Bank of England (BOE) will release their interest rate decisions. The BoJ could revise its economic outlook downwards while maintaining negative rates. Later in the week, some expect the Federal Reserve to detail plans to reduce the balance sheet. Finally, the BOE should leave in place its Covid recovery plan in a context of economic slowdown.
WEEKLY PERFORMANCE OF THE US DOLLAR AGAINST CURRENCY AND GOLD
Euro forecast: EUR / USD price could drop ahead of German election
While central bankers ‘meetings in the United States, Japan and the United Kingdom will be at the forefront, to the left and at the center of traders’ concerns this coming week, it would be wise not to ignore the German federal elections in next Sunday.
Australian Dollar Outlook: Commodities weigh on AUD / USD. Eyes on the FOMC and the RBA minutes
The Australian dollar remains hostage to fluctuations in the commodity market as low interest rates fail to attract buyers. Will yields rise to reverse AUD / USD?
FOMC Snapshot – S&P 500 and DAX 30 Forecasts for the Week Ahead
All eyes on the Fed on Wednesday as investors weigh in on the chances of a cut announcement
GBP / USD forecast: Chinese risks, decisions of the Fed and the BoE, reversal of the pound?
Along with growing uncertainty in China over Evergrande default risks, two central bank decisions will dominate the market theme next week.
Weekly US Dollar Fundamental Forecast: Discussions to Intensify at September Fed Meeting
The US dollar (via the DXY index) is trending higher as markets expect more talk about the tap at the Fed’s September meeting.
Gold Price Outlook Depends on Fed Rate Decision and Forecast
The Federal Reserve’s rate decision is likely to influence the near-term outlook for the price of gold as the central bank appears to be on track to reduce monetary support.
Japanese Yen Forecasts: Yen Crosses Eyes Of BoJ And CPI As Haven Flows Boost Yen Strength
The Japanese yen is eyeing the next Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment.
CAD weekly tech forecast (mixed): Choppy price action or reel ahead of Fed meeting?
USD / CAD traded volatile, looking for a catalyst the Fed could provide next week
Dow Jones, Nasdaq 100, S&P 500 forecasts for next week
Stocks appear to be in a corrective phase but could be challenged; levels and lines to watch in the days to come.
Gold Price Prediction: Gold Plunges Towards Key Support – FOMC XAU / USD Levels
Gold fell for a second week, with prices testing a critical support pivot over 9% from August lows, with the rally now probing a major resistance hurdle after NFPs. Levels that count on the weekly XAU / USD chart.
GBP / USD technical forecast: the pound risks a downside breakout
The consolidation of the GBP / USD pair could end soon if the price breaks out of a symmetrical triangle in play since July. At present, a downward breakout is likely as a result of the appearance of a death cross.
US Dollar technical forecast: USD hits September high, FOMC on bridge
The US dollar entered a bid late last week to set a new high in September. The FOMC is fast approaching, will the bulls be able to reach a new high?
Australian dollar may weaken, bearish trends resume: AUD / USD, AUD / JPY, AUD / NZD, AUD / CAD
The Australian dollar remains vulnerable to most of its major counterparts, with AUD / USD and AUD / JPY resuming losses. Has AUD / NZD hit rock bottom? AUD / CAD may consolidate.