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Even though market sentiment started 2022 on a sour note, there were clearly winners and losers on Wall Street. Dow Jones futures fell about 0.1% last week, while the tech-heavy Nasdaq 100 fell about 4.35% in the worst performance since February. Growth-linked capital clearly suffered disproportionately, as value-linked and cyclical stocks held up better.
Could this be a foretaste of the road ahead this year? The latest FOMC meeting minutes clearly highlighted more of a more hawkish Federal Reserve, with three fully integrated rate hikes by the end of this year. If inflationary pressures persist, the central bank has also opened the door for quantitative tightening or a shrinking balance sheet.
The US dollar outperformed most of its major peers as Treasury yields soared on the curve. Cautious market volatility did not bode well for sentiment-linked Australian and New Zealand dollars. High crude oil prices further helped support the Canadian energy dollar. Despite recent inflationary pressures, gold prices have not been able to find a stable base.
Speaking of inflation, the next US CPI report is due next week. Headline inflation is expected on Wednesday at 7.0% y / y in December with a core at 5.4%. These are some of the highest readings for about 30 to 40 years. A higher-than-expected result could further stimulate the Fed’s hawkish monetary policy bets.
This may increase stock market volatility as the rate of return on relatively safer Treasury yields increases. President Jerome Powell will certainly be questioned in depth during his confirmation hearing this week. Towards the end of the week, a slew of Fedspeak will cross the wires. Fourth quarter results also kick off with key banks, such as Chase and Wells Fargo.
WEEKLY PERFORMANCE OF THE US DOLLAR AGAINST CURRENCY AND GOLD Fundamental Forecast:
S&P 500 forecasts for the coming week
Soft start to 2022 for stocks as Fed hawks bring QT back into the equation.
Australian Dollar Outlook: US Dollar, Fed, RBA, Commodities. Is AUD / USD trapped?
The Australian dollar depreciated last week after the Fed’s hawkishness boosted US yields and the US dollar. Will interest rates or commodities drive the AUD / USD?
Bitcoin (BTC), Ethereum (ETH) – Collapse in multi-month support as Triumph sellers
A bad start to the year for Bitcoin and Ethereum holders, with sellers taking control and driving the price lower and lower. Strong support is approaching.
Fundamental Prediction of the Pound Sterling: The Pound Could Be Due To A Break But Remains Bullish
The British pound continues its exceptional performance and although it may be due to a pullback, the outlook remains bullish.
Euro forecast: EUR / USD rebound vulnerable to rising US inflation
The US Dollar Index (DXY) may re-establish an uptrend following the Federal Reserve’s interest rate decision as it appears to be trading within a bullish flag formation.
Testimonial from Fed Chairman Eye Powell and CPI inflation data
Gold prices fell last week as bets on the Fed’s rate hike strengthened. Bullion traders expect a busy week as Fed Chairman Powell testifies before Congress and CPI inflation data is expected to cross cables.
Gold Technical Prediction: Gold Is About To Break Fibonacci Trap
Gold prices widen the January opening range between key Fibonacci levels – the 618 battle lines are drawn. Levels that count on the weekly XAU / USD chart.
USD Technical Outlook: Dollar Reel Expands Under Bull Flag, NFP Miss
Technical chart patterns dominate weekly and daily DXY charts indicating a bullish outlook if prices break above key levels. NFP pours old water on the rising dollar.
Mexican Peso Weekly Forecast: US Inflation Data May Trigger USD / MXN Bounce
Market attention will be focused on the US inflation report next week. If the December CPI accelerates further, bond yields should gain ground, fueling a bullish response in USD / MXN.
Stock market forecast for next week: plunge towards great support
Stocks are in pullback mode after record highs, looking to slightly lower support to see if this is a minor correction or the start of a wider decline.
Canadian dollar technical forecasts: USD / CAD, CAD / JPY
USD / CAD has retreated to a key longer-term support area, but bulls in CAD may find more potential on the CAD / JPY chart, as this week’s technical forecast for the Canadian dollar shows.
Outlook for the Australian dollar remains bumpy: AUD / USD, AUD / JPY, AUD / CAD, EUR / AUD
The Australian dollar weakened last week, bracing for further losses. What is the technical road ahead for AUD / USD, AUD / JPY, AUD / CAD and EUR / AUD?
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