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Weekly Economic Highlights and Market Analysis

Weekly Economic Highlights and Market Analysis: This week brings critical economic events expected to impact global market movements,
especially significant currencies and commodities.
As the release of crucial financial data from the United States and the Eurozone approaches,
investors eagerly await these announcements to guide their investment decisions.
In this article, we review the critical news expected to be traded during the week and analyze the performance of the significant financial assets.

 

Content

Weekly Economic Highlights

Gold

Oil

EURUSD

GBPUSD
EURCAD

 

 

Weekly Economic Highlights

Tuesday, September 3, 2024

Manufacturing PMI (August)-USD

Wednesday, September 4, 2024

JOLTs Job Openings (July)-USD

Thursday, September 5, 2024

ADP Non-Farm Employment Change (August)-USD
Services PMI (August)-USD

Friday, September 6, 2024

GDP (YoY) (Q2)-EUR

Average Hourly Earnings (MoM) (August)–USD

Non-Farm Employment Report (August)-USD

Unemployment Rate (August)-USD

 

 

 

 

Gold

Gold closed around the 2502 level last week after trading within a sideways range between 2404 and 2530,
awaiting the anticipated rate cut by the U.S. Federal Reserve in September.

Gold is expected to resume its upward trend if it remains above the psychological support level of 2500.
However, if this level is broken and the price closes below it, further declines could extend towards the 2460 level.

 

Oil

Oil prices saw a sharp decline towards the end of last week due to expectations that China’s growth in 2024 might fall short of expectations.
This would weaken China’s demand for oil, which is currently grappling with a severe economic crisis.
Additionally, demand from the U.S. has also weakened following the latest inventory report.
Oil is trading around 73.59, and it is expected to continue its decline towards the support level of around 71.40.
A break below this level could lead to further declines towards 68.

 

 

 

 

EURUSD

The EURUSD pair saw some downward correction towards the end of last week after the U.S. dollar strengthened on positive news.
However, the dollar remains under significant pressure as it awaits U.S. employment data this week.
Technically, the pair is trading around 1.1045 near a critical support level,
which may push it higher towards 1.1138.
Conversely, if the 1.1029 level is breached and the price closes below it,
the downtrend could extend toward the demand zone around 1.0950.

 

GBPUSD

The GBPUSD trades around 1.3122 after a false breakout above 1.3145, followed by a pullback below this level.
This movement supports the continuation of the pair’s decline from current levels.
It targets the ascending trendline on the four-hour chart around 1.2900,
where it may find support and resume its upward trajectory.

 

EURCAD

The EURCAD pair is trading around 1.4907 after a substantial decline
due to the euro’s weakness following a drop in inflation figures in the Eurozone,
which has increased the likelihood of an interest rate cut by the European Central Bank soon.
The pair is trading near a significant support level of around 1.4895,
and if bearish momentum weakens at the start of the week, the pair may rebound toward 1.5107.
However, a break below 1.4894 could lead to further declines towards 1.4727.

 

 

This Week’s Economic Highlights and Market Analysis

Broad Decline in Cryptocurrencies and Bitcoin Below $60,000

Broad Decline in Cryptocurrencies and Bitcoin Below $60,000: The price of Bitcoin fell below the $60,000 level amid
a broad decline in the cryptocurrency market,
which included a sharp drop in Ether, the second-largest cryptocurrency.

 

Content

Oil

Cryptocurrencies

Apple

 

 

 

 

Oil Prices Rise Again on the Back of U.S. Inventory Declines

Oil prices rose in Asia after dropping more than 2% on Tuesday,
as a sector report indicated a further decline in U.S. crude inventories.
Brent crude climbed to around $80 per barrel, while West Texas Intermediate rose above $75 per barrel.
The American Petroleum Institute, funded by the industry,
predicted nationwide inventories would drop by 3.4 million barrels last week,
marking the eighth decline in nine weeks if confirmed by official data later today.
Crude oil prices have taken a significant hit in recent sessions,
with the latest drop following a surge in futures to nearly the 200-day moving average.

 

Broad Decline in Cryptocurrencies and Bitcoin Below $60,000

Bitcoin’s price fell below the $60,000 level amid a broad decline in the cryptocurrency market,
which included a sharp drop in Ether, the second-largest cryptocurrency.
The largest crypto asset lost more than 6%, marking its most significant drop since the August 5 decline,
before recovering some losses to trade at $59,400.
At the same time, Ethereum lost over 7% before paring back some of the drop to trade at around $2,463.
Major cryptocurrencies gave up the gains made last week after
Federal Reserve Chair Jerome Powell indicated that the U.S. central bank is on track to lower interest rates,
which had reached their highest level in over two decades.

 

 

 

 

Apple Announces Major Job Cuts in a Rare Move

On Wednesday, U.S. technology giant Apple Inc. announced significant job cuts in its digital services sector,
laying off nearly 100 employees in a move that diverges from Apple’s usual approach, as layoffs are relatively rare.
The cuts primarily affected teams responsible for Apple Books and Apple News,
although other service groups were also impacted.
This decision aligns with Apple’s plan to reduce its focus on the Apple Books service,
which serves its broader strategy, as the company views it as a less critical component of its service portfolio.

 

Broad Decline in Cryptocurrencies and Bitcoin Below $60,000

Weekly Market Insights

Weekly Market Insights: This week brings significant economic events and market movements that could shape the trading landscape.
From crucial inflation data in Europe and Canada to critical housing
and manufacturing reports in the U.S., investors will have plenty to watch.
Additionally, market trends in gold, EUR/USD, GBP/USD, and oil
present challenges and opportunities as we navigate through the week.
Here’s a concise overview of what to expect.

 

Content

Economic Agenda

Gold
Oil

EURUSD

GBPUSD

 

 

 

Economic Agenda

Tuesday, August 13

15:30 USD: Producer Price Index (MoM)

15:30 USD: Producer Price Index (YoY)

Wednesday, August 15
05:00 NZD: Reserve Bank of New Zealand Interest Rate Decision
09:00 GBP: Consumer Price Index (YoY) (July)

15:30 USA: Consumer Price Index (YoY) (July)

15:30 USA: Consumer Price Index (MoM) (July)

Thursday, August 14

09:00 GBP: Gross Domestic Product (QoQ) (Q2)

15:30 USD: Initial Jobless Claims

 

Gold

Gold closed last week’s trading around the 2,430 level after seeing a slight decline to the 2,380 level
but quickly rebounded as market fears subsided and expectations grew that
the Federal Reserve would cut rates by 50 basis points in September, which strongly supports gold.
From a technical perspective, gold was able to close above the role-reversal level at around 2,417,
which supports the continuation of the upward trend,
targeting levels of 2,444 and then the historical peak at around 2,481 in the medium term.
However, if it breaks the 2,417 level again and closes below it, gold may target the 2,380 level again.

 

Oil

West Texas Intermediate crude futures rose to $77 per barrel, showing clear momentum.
After touching the 72.50 support level,
the price rebound is still considered a correction and will face a critical resistance level of around 78.25.
If prices break above it, a return to upward trading is expected.
However, if prices retreat and break below the 72.50 support level,
a continued decline towards the main support level of 68.00 is anticipated.

 

 

 

EURUSD

The EUR/USD trades around the 1.0914 level after a false breakout of the resistance level around 1.0948,
followed by a return to trading below it.
This supports continuing the downward movement in the coming period,
targeting levels of 1.0781.
However, if inflation figures released this week are below 3%,
the dollar may weaken, leading to a breakout above the 1.0948 level and potentially targeting the 1.1100 level.

 

GBPUSD

The pound has stabilized near 1.27 against the US dollar after touching the psychological support level of 1.2700.
The prices have been in an upward trend since April,
and if prices remain above the support level, a rise to 1.2945 and then 1.3044 is expected.
However, if the support level is broken, a decline to the support levels of 1.2700 and then 1.2615 is likely.

 

Weekly Market Insights

Oil Rises Amid Political Uncertainty in the U.S. and the Middle East

Oil Rises Amid Political Uncertainty in the U.S. and the Middle East

Oil prices climbed on Monday amid political uncertainty in the United States and the Middle East,
offsetting some of the pressures from a stronger dollar and weak demand in China.

 

Topic

Details

Last Week

 

 

 

 

Details

Brent crude futures rose 15 cents, or 0.2%, to $85.18 a barrel by 0425 GMT, after closing 37 cents lower on Friday.
U.S. West Texas Intermediate (WTI) crude was at $82.41 a barrel, up 20 cents, or 0.2%.

Oil prices shrugged off the impact of a stronger dollar, which rose following a failed assassination attempt on U.S. presidential candidate Donald Trump.
“I don’t think you can ignore the uncertainty stemming from the assassination attempt that
occurred at the beginning of the week, which will cast a shadow over a deeply divided country ahead of the elections,”
said Tony Sycamore, a market analyst at IG.

In the Middle East, talks aimed at ending the war in Gaza between Israel and the Palestinian Hamas movement stalled on Saturday after three days, although a Hamas official said on Sunday that the group had not withdrawn from the discussions. Meanwhile, an attack that Israel said targeted the commander of Hamas’ military wing killed 90 people on Saturday.

The ongoing geopolitical risks have driven oil prices higher amid uncertainty about the volatile situation in the Middle East. Additionally, oil markets remain broadly supported by supply cuts from OPEC+, with Iraq’s oil ministry stating it will compensate for any surplus production starting in early 2024.

 

 

 

 

 

Last Week

Brent crude fell more than 1.7% after four weeks of gains, while U.S. WTI crude futures dropped 1.1%,
as weak oil demand in China, the world’s largest crude importer,
clashed with strong summer consumption in the United States.
China’s crude oil imports fell 2.3% in the first half of this year to 11.05 million barrels per day amid disappointing fuel demand and independent refineries cutting production due to weak profit margins.

Data showed that China’s economy slowed in the second quarter as prolonged real estate downturns and job insecurity affected domestic demand, maintaining expectations that Beijing would need to implement more stimulus measures.

Energy services firm Baker Hughes reported on Friday that the number of active oil rigs in the United States, an early indicator of future production, fell by one to 478 last week, the lowest level since December 2021.

 

 

 

Oil Rises Amid Political Uncertainty in the U.S. and the Middle East

 

U.S. Energy Information

U.S. Energy Information Administration Reveals Its Global Oil Demand Forecasts

The U.S. Energy Information Administration (EIA) released its monthly short-term energy outlook report yesterday, Tuesday. Below are the key points from the report:

 

 

 

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Global Oil Demand

The global oil demand for 2024 is expected to increase by about 1.10 million barrels per day year-on-year. The EIA has raised its global oil demand forecast for 2025 by 300,000 barrels per day, with the annual increase now expected to reach 1.80 million barrels per day.

 

 

U.S. Oil Production

The administration expects U.S. oil production to rise by 10,000 barrels per day in 2024 and predicts that production will now grow by 320,000 barrels per day year-on-year to 13.25 million barrels per day. The EIA has increased its U.S. oil production forecast for 2025 by 60,000 barrels per day and now expects production to grow by 520,000 barrels per day year-on-year to 13.77 million barrels per day.

 

 

U.S. Oil Demand

The EIA has raised its U.S. oil demand forecast for 2024 by 100,000 barrels per day and now expects demand to grow by 200,000 barrels per day year-on-year to 20.4 million barrels per day. The U.S. oil demand forecast for 2025 remains unchanged at 20.6 million barrels per day, with a growth of 200,000 barrels per day compared to 2024.

 

 

 

 

 

 

Global Oil Production

The EIA has lowered its global oil production forecast for 2024 by 200,000 barrels per day,
expecting production to grow by 600,000 barrels per day year-on-year to 102.4 million barrels per day.
The administration has reduced its global oil production forecast for 2025 by 100,000 barrels per day,
with production now expected to grow by 2.2 million barrels per day year-on-year to 104.6 million barrels per day.

 

 

Crude Oil Price Forecasts

The EIA has raised its forecast for the price of West Texas Intermediate (WTI) crude oil in 2024 to $82.03 per barrel (previously $79.70 per barrel). For 2025, the WTI price is expected to rise to $83.88 per barrel (previously $80.88 per barrel). The administration has also raised its forecast for Brent crude oil prices in 2024 to $86.37 per barrel (previously $84.15 per barrel) and expects Brent prices to rise to $88.38 per barrel in 2025 (previously $85.38 per barrel).

 

 

 

U.S. Energy Information Administration Reveals Its Global Oil Demand Forecasts

 

Oil Prices Decline as Hurricane “Peril” Risks Subside

Oil Prices Decline as Hurricane “Peril” Risks Subside

Oil prices fell as the impact of Hurricane “Peril” on causing significant disruptions to oil infrastructure in Texas waned.

 

Topic

Oil

Yen

Dollar

 

 

 

 

 

 

Oil

The price of West Texas Intermediate crude dropped by over 1%,
trading at $81.85 per barrel after four consecutive weeks of gains.
Concerns that Hurricane “Peril” would disrupt oil operations in the Gulf of Mexico and Texas
had pushed futures up last week,
but narrowing product price margins indicate the storm was less disruptive to infrastructure than expected.

 

 

 

 

 

 

 

Yen

The Japanese yen fell before the Federal Reserve Chairman’s testimony.

The yen continued to move in the negative territory for the second consecutive day against the US dollar,
nearing its lowest level in 38 years, under the scrutiny of Japanese authorities.
Later today, the market awaits the first part of the semi-annual testimony by Federal Reserve Chairman Jerome Powell before the US Congress, expected to include new comments on the inflation battle in the US and the future of American interest rates.

 

 

 

 

Dollar

The dollar steadied ahead of Powell’s testimony.

The dollar index held around 105 as investors avoided making big bets ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress.
Markets also prepared for key US inflation data this week, which could shed light on the interest rate path.
However, the index remained close to its lowest level in over three weeks after losing nearly 1% last week as weak US economic data bolstered expectations that the Federal Reserve would need to cut interest rates soon.

 

 

 

Oil Prices Decline as Hurricane “Peril” Risks Subside

 

Oil prices decline ignoring the Iranian attack on Israel

Oil prices decline ignoring the Iranian attack on Israel.

Oil prices ignored the unprecedented Iranian attack on Israel,
declining amid expectations that the conflict would be contained.

 

Topic

detail

Hormuz is the real danger

 

 

 

 

 

detail

Brent crude rose only 0.7% at the start of trading to $91.05 a barrel, before falling to around $90.
Iran launched more than 300 rockets and drones over the weekend,
marking the first time it has struck Israel from its territory, although most were intercepted.

 

The attack, which had been anticipated for days, was in retaliation for a strike in Syria that resulted in the death of senior Iranian military officers.

 

Oil has been one of the strongest performing commodities this year,
as the “OPEC+” alliance maintains tight control over supply to deplete stocks and support prices
The latest attack escalates tensions in a region that produces about a third of the world’s crude oil.

 

The Iranian mission to the United Nations said the issue “can be considered over,”
which currently reduces the risk of a large-scale conflict.

 

 

 

 

 

 

Hormuz is the real danger

Focus has also been on shipping risks after Iran seized the “MSC Aries” vessel near the major waterway in the Strait of Hormuz shortly before its strikes against Israel.
The beneficial owner of the vessel is part of the “Zodiac Group,” according to data gathered by Bloomberg.
This move raises concerns about the safety of ships in the region, adding to previous logistical disturbances.

The most alarming scenario is the closure of the Strait of Hormuz.
While it is unlikely that Iran will close the strait, the risks are increasing.

 

Oil markets have seen significant increases in recent months,
leading to higher energy costs and posing a headache for central bank governors as they seek to curb inflation.
Before Tehran’s strike over the weekend, crude oil analysts were already discussing the possibility of prices reaching $100 a barrel again.

 

Last week, OPEC said oil will need to be closely monitored in the coming months to ensure a
“healthy and sustainable balance in the market,” according to a monthly report.
There are signs of rising demand.
American refineries are gearing up to boost fuel production for the summer driving season,
while the latest macroeconomic data from China suggests that the economy may be about to turn a corner.

 

 

Oil prices decline, ignoring the Iranian attack on Israel

 

Oil prices rise on end-of-week geopolitical concerns

Oil prices rise on end-of-week geopolitical concerns

Oil prices rose at the end of last week, with Brent crude posting its biggest weekly gain since October,
driven by geopolitical concerns in the Red Sea that have disrupted crude supplies.

 

Topic

Details

Analysis

 

 

 

 

 

Details

Attacks by the Iran-backed Houthi group have forced more ships to divert widely to avoid the vital waterway,
leading to delays in oil shipments.

So far this week, only about 30 tankers, including crude and fuel tankers,
have entered the Bab al-Mandeb Strait at the southern tip of the Red Sea,
down more than 40% from the daily average over the past three weeks
as the Houthis target commercial ships in support of Hamas in its war with Israel.

News that Russia will cut its January export cuts also helped support oil prices,
as it reduced some of the negative impact of Red Sea concerns.

 

Still, oil prices are still on track to record their first annual decline since 2020, as rising production from the United States and elsewhere is at odds with efforts by the OPEC+ alliance to support the market by cutting production. Demand prospects also look fragile, with the International Energy Agency forecasting that growth will slow sharply next year.

 

 

 

 

 

Analysis

The rise in oil prices at the end of last week suggests that geopolitical concerns are still playing a significant role in supporting prices, as these concerns are a major factor in the recent market volatility.

However, there are still significant risks to oil prices,
as rising production from the United States and elsewhere is expected to continue to pressure prices.
Demand prospects are also still fragile, as global economic growth is expected to slow next year.

 

 

 

Oil prices rise on end-of-week geopolitical concerns

 

 

Oil prices fall as US production surges

Oil prices fall as US production surges

Oil prices fell Thursday, after three days of gains,
as concerns over rising US production and ongoing threats from Yemen’s Houthi rebels to attack ships in the Red Sea weighed on the market.

 

Topic

Details

Factors that led to the decline in oil prices

Outlook for oil prices

 

 

 

 

 

Details

Brent crude futures, the international benchmark, fell 2.8% to $78.58 a barrel,
while US West Texas Intermediate crude fell 3.2% to $74.08 a barrel.

 

Government data released Wednesday showed that US crude production hit a record 13.3 million barrels per day last week, far exceeding analyst expectations.

 

Meanwhile, the Houthi rebels, who are backed by Iran, warned that they would retaliate if the United States carried out military strikes against their bases.

 

The escalation of Houthi attacks on ships in the Red Sea has led shipping companies to divert vessels away from the major energy shipping route.

 

Crude is still on track to record its first annual decline since 2020, as investors remain unconvinced that the OPEC+ alliance will be able to reduce supply in the market in the coming quarter, despite the alliance’s decision to extend production cuts.

“It’s a market that’s full of a lot of tensions, and in particular, tensions around supply,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank.

 

“There’s the Red Sea, but there’s also record US production and signs that OPEC is losing its grip on the tight supply management,” he added.

 

While the United States is considering military action against the Houthis, Washington is preferring a diplomatic solution and is working with its Western and Arab allies to bolster a naval protection force.

About 12% of global trade passes through the Red Sea, and more than 100 container ships are currently taking a longer route around Africa due to fears of attacks.

 

On the other hand

the United States has cemented its position as the world’s largest oil producer. Production rose by 200,000 barrels per day last week to the highest level in data dating back to 1983, according to the Energy Information Administration. Domestic crude oil inventories also rose for the first time in three weeks.

 

 

 

 

 

 

 

 

Factors that led to the decline in oil prices

  • Rising US production: US oil production hit a record high last week, leading to an increase in supply in the market.
  • Houthi threats: The Iran-backed armed group threatened to attack ships in the Red Sea, leading to increased concerns about supply.
  • Weakness in OPEC+: Investors remain unconvinced that OPEC+ will be able to reduce supply in the market in the coming quarter, despite the alliance’s decision to extend production cuts.

 

 

Outlook for oil prices

Oil prices are expected to remain volatile in the near term, as they swing between factors that support demand,
such as economic growth, and factors that support supply, such as rising US production.

 

 

 

Oil prices fall as US production surges

Oil prices rise on Yemeni drone attacks

Oil prices rise on Yemeni drone attacks, US-Russia supply dynamics

Oil prices rose on Monday, December 18, 2023,
with Brent crude exceeding $77 per barrel and West Texas Intermediate approaching $72 per barrel.

The increase comes after a group of major shipping companies suspended their vessels from crossing the Red Sea,
raising concerns about disruptions to supplies through this vital artery for global oil trade.

 

Topic

Security threats in the Red Sea

Increased US oil supplies

Increased Russian gas exports to China

Conclusion

 

 

 

 

 

 

Security threats in the Red Sea

A group of major shipping companies suspended their vessels from crossing the Red Sea,
including MSC Mediterranean Shipping (MSC) and CMA CGM.

This came after the United States shot down 14 drones launched from areas controlled by the Houthi group in Yemen, which is backed by Iran.

The Houthis control the main ports in Yemen, including the port of Hodeidah,
one of the most important ports in the Red Sea.

 

 

Increased US oil supplies

Goldman Sachs said it expects Brent crude prices to range between $70 and $90 per barrel in 2024,
driven by increased US production.

Data from the US Energy Information Administration showed that
crude oil inventories in the United States fell by 4.5 million barrels last week,
the largest weekly decline since April 2022.

 

 

 

 

 

 

Increased Russian gas exports to China

Russian gas company Gazprom announced on Sunday that gas shipments to China set a new daily record,
compared to the previous day.

Gazprom did not disclose the volume of gas exported to China,
but it said last week that it is working to increase supplies to Beijing through the Power of Siberia pipeline.

 

 

Conclusion

Oil prices remain volatile, as concerns about supply disruptions compete with increased US production.

 

 

Oil prices rise on Yemeni drone attacks