The United States closes its year with unemployment of 4.2% from 6.7% in January 2021. The final production of the services sector closes this 2021 with 69.1% increasing from 57.2%. Both data gave a weekly close with a strong dollar only at the USDCAD cross. The rest of the fx crosses were kept out of the dollar as a safe haven and diversified in different currencies. Investors are bracing for an aggressive turn from the Federal Reserve as expectations grow that the central bank is concentrating on fighting inflation.
In recent days, signs that the Federal Reserve will move faster than expected in the face of rising consumer prices have hit stocks in growth and technology companies, which have also been hit by broader volatility. the market derived from concerns about the expansion of the omicrón variant.
Jerome Powell is today the protagonist of the volatility, in principle he said that the central bank will probably discuss at its next meeting the acceleration of the reversal of its government bond purchase program of 120,000 million dollars a month. Powell also said that the word “transitory” was no longer appropriate to describe the current high rate of inflation. Stronger-than-expected elements in Friday’s US jobs report reinforced the view of a more aggressive Fed and weighed on growth stocks. Powell’s openness to accelerating the Fed’s phasing-out program is likely to bring more volatility in the coming months as investors position themselves on the possibility of a rate hike.
The European currency market was mixed during last week’s announcements. We must remain open to possible market zone changes for the remainder of December 2021. EURUSD managed to hold above 1.13 for Friday’s close, while GPBUSD was just one step short of 1.3250 and we could see sell next week. USDCAD will remain stable for the first few days and we estimate dollar take-offs to be converted to the Canadian dollar in the middle of the week. Wednesday’s Canadian interest rate will be the precursor to this change. USDCAD shows a sell preference below highs between 1.2850 and 1.2830. USDJPY for your part surprised with its close below 113.0, passing the barrier of 112.50 we would return to the sellers until 112.0. AUDUSD failed to stay buyer in the week, below 0.70 the sell pressure will have 0.68 as its final destination.
Gold and silver commodities met market expectations and remained bought at the end of the day on Friday. Silver managed to hold above 22.50, although without this price at the opening of Monday we will have silver for sell until 22.30 and 22.20. In gold, buyers remained above 1780.0. Gold buyers could also take their gains at Monday’s open. Below 1780.0 we enter sell until 1770.0 and 1765.0. The behavior of commodities is considered mixed with respect to international turbulence. Omicron is not in the crosshairs of the market for commodity havens. Powell’s opinion and monetary policy did bring take profit in gold and silver, so we are facing a possible strategic change in both metals.
At the same time, investors have been raising the stakes on so-called value stocks, expecting them to perform better in a tight monetary policy environment. Such stocks emerged in early 2021 when the US economy reopened, but faltered later as investors leaned toward tech stocks. Fed funds rate futures, which track expectations for short-term interest rates, on Friday night reflected a roughly 50% chance that the Fed will raise rates from their current near-zero level for May. , as CME’s Fed Watch tool showed. That compared to around 31% in early November.