How Energy Crisis Affects German PMI August 23, 2022, 10:30 GMT+3 Germany will publish Flash Manufacturing PMI data on Tuesday, August 23, at 10:30 MT time (GMT+3)…
Starting winter with optimism
The market sentiment is risk-on today due to the vaccine optimism and encouraging data from China.
Moderna announced yesterday that its vaccine is 94% effective at preventing Covid-19 and 100% effective at preventing severe cases of the disease. So, now there are two vaccines: Moderna and Pfizer, which are waiting for FDA authorization. Besides, both China’s Manufacturing and Services PMI reports beat all expectations. As a result, the rebound of economic activity in the world’s second-largest economy encouraged investors.
All that positive news drove the S&P 500 to the upside. The stock index approached the all-time high of 3 665. The final push and it could be there, but it met a selling pressure just above 3 650. If it manages to break 3 665 finally, the way up to the next round number of 3 700 will be clear. On the flip side, the move below the low of November 30 at 3 615 will push the S&P 500 to the support of 3 600.
Chicago PMI report in combination with the US home sales came out worse than the forecasts. It added pressure on the greenback. By the way, the USD is trading at the lowest level since April 2018.
EUR/USD touched the key resistance of 1.2000 yesterday but failed to break it. Now it’s heading towards it again, but it may meet the barrier at 1.1975. In the opposite scenario, the move below yesterday’s low of 1.1925 will push the pair to the 50-period moving average of 1.1900.
Gold is edging higher, but it may meet the resistance of Friday’s high at $1 790. If it manages to break this level, it may jump to the key psychological mark of $1 800. In the opposite scenario, the move below $1 765 will drive the yellow metal to $1 750.
Finally, let’s talk about oil. It dropped as yesterday OPEC+ members failed to agree on further output cuts. Today they will meet again for the second day. If the WTI oil dipped below the recent highs of $44.70, the way down to the 50-period moving average of $44.00 will be open. On the flip side, the move above the resistance of $46.00 will push the price to the next round number of $47.00.
Follow US ISM Manufacturing PMI and the speech of Fed’s Powell at 17.00 MT time.
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.