On Friday, the EUR/USD plunges during the New York session, trading at 1.1237, down some 0.85% at the time of writing. The market sentiment is downbeat, spurred by monetary policy decisions by two of the most important central banks, as investors assess those decisions and rebalance their portfolios.
On Wednesday, the Federal Reserve announced its monetary policy decision. The US central bank kept their interest rates unchanged at the 0 to 0.25% range while increasing the speed of the bond taper, from the $15 Billion agreed initially up to $30 Billion, beginning in mid-January of 2022.
After three of the most influential central banks delivered “hawkish” monetary policy decisions, the USD/JPY slides during the New York session trading at 113.36 at the time of writing. As witnessed by European and US equities dropping, the market sentiment is downbeat as investors assess monetary policy shift on the Fed, BoE, and ECB as the year-end looms.
Earlier in the Asian session, the Bank of Japan decided to slightly scale back the pandemic stimulus, though it kept rates unchanged at -0.10%. According to Bank of Japan Governor Kuroda, he said that inflation remains well below the 2% target of the central bank, and it may “perk up next year,” mainly caused by high energy prices.
Since losing its grip on the 1.3300 level, GBP/USD has continued to gradually ebb lower and, trading in the 1.3270, is now all the way back to its pre-BoE policy announcement levels. Recall that the bank surprised markets with a 15bps rate hike on Thursday, sending GBP surging at the time (GBP/USD hit highs in the 1.3370).
Looking back over the last few weeks, the 1.3370 area has been an important zone of support/now resistance and GBP bears appear to have taken the opportunity here to reload on shorts. If the dollar can continue to nurse a recovery in quiet, low volume pre-Christmas holiday trade next week and if the UK Omicron situation continues to deteriorate, there is no reason why GBP/USD can’t return to 1.3200 or under.
AUD/USD ended the week on the back foot as it ran into a layer of weekly resistance just ahead of 0.73 the figure. Down some 0.8% on the day, the pair finished Friday's session at 0.7223 after travelling between a range of 0.7122 and 0.7184.
The Australian dollar was unable o maximise on the mid-week blockbuster employment data and was capped around 0.7223 the high for the week. The US dollar found a last-minute bid during a risk-off US session and the US Dollar Index finished the week above the 96.00 figure for the third week in a row.
Gold advances for the third successive day, aiming towards ending the week on a higher note, trading around $1.805 during the New York session. At the time of writing, the market sentiment is downbeat, as shown by US equity indices posting losses between 0.22% and 1.18%. Meanwhile, US bond yields extend their fall, with the 10-year benchmark note falling three basis points, down to 1.392%, a tailwind for the non-yielding metal.
After the bulk of central banks hosting monetary policy decisions, the yellow metal finally broke the $1.800 barrier, as investors assess the “hawkish” pivot in the Fed, the Bank of England (BoE), and the European Central Bank (ECB). An absent macroeconomic US docket would keep XAU/USD trading within familiar levels. The “hawkish” pivot by Jerome Powell did its work as Fed speakers cross the wires.
Oil prices are under pressure on Friday amid a downturn in the market’s broader appetite for risk as traders mull this week’s hawkish turn from many G10 central banks and a continued rise in Omicron infection rates across the world. After matching early weekly highs just under $73.00 on Thursday, front-month WTI futures have since dipped all the way back to test the $71.00 level. At current levels in the low-$71.00s, WTI is set to end the week lower by about 50 cents or 0.8% and close to the centre of this week’s $69.40-$73.00ish range.
Meanwhile, the BoE actually implemented a surprise 15bps hike and the ECB laid out its QE taper plans for 2022, with the PEPP to end as planned in March. Some saw this as a vote of confidence in the durability of the global recovery, which perhaps aided crude oil markets at the time, though on Friday, focus has returned to a worsening Omicron picture.
In the latest trading session, Qualcomm closed at $176.80, marking a -0.76% move from the previous day. Investors will be hoping for strength from Qualcomm as it approaches its next earnings release. On that day, Qualcomm is projected to report earnings of $3.01 per share, which would represent year-over-year growth of 38.71%. Meanwhile, our latest consensus estimate is calling for revenue of $10.42 billion, up 26.51% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.49 per share and revenue of $39.38 billion. These totals would mark changes of +22.83% and +17.32%, respectively, from last year.
Shares of Starbucks were down by 4.5% as of 12:50 p.m. ET Friday -- and you can pin some of the blame on investment bank R.W. Baird. On Friday morning, Baird analyst David Tarantino downgraded Starbucks from outperform to neutral, and cut his price target on the shares by $10 to $116, StreetInsider.com reports.
In the company's earnings report for its fiscal fourth quarter, which ended Oct. 3, management noted that "China comparable store sales decreased 7%, driven by a 5% decline in average ticket and a 2% decline in transactions".
Earlier in the year, a rebounding Chinese economy helped Starbucks grow its in-country same-store sales by 17%, mostly from increased foot traffic. Its gains, though, were mitigated by a 2% decrease in ticket size.
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