Risk off tone as Fed meeting approaches

What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower. - William O’Neil

 

 

HEADLINES

 

 

• U.S. dollar advances as Fed seen concluding asset buys sooner than expected
• Bank of Canada keeps 2% inflation target, adds labor market factors to mix
• Oil eases on worries Omicron could reduce demand
• Gold futures settle at a 3-week high as Fed meeting comes in focus
• Wall Street falls on Omicron worries ahead of Fed meeting
• EUR/USD is under downward pressure, 1.10 in the crosshairs – Scotiabank

 

 

 

FOREX

 

 

U.S. dollar advances as Fed seen concluding asset buys sooner than expected

 

The dollar rose on Monday ahead of a slew of central bank meetings this week led by the Federal Reserve, with investors expecting the U.S. central bank to announce it will wrap up its bond purchases sooner than expected, as they look for clues on timing of interest rate increases next year.

Aside from the Fed, the European Central Bank, Bank of Japan, Bank of England, Swiss National Bank, and Norges Bank, among others, all have policy decisions in the next few days.

 

Bank of Canada keeps 2% inflation target, adds labor market factors to mix

 

The Bank of Canada on Monday unveiled an agreement with the federal government to keep its inflation target unchanged at 2%, adding that it would now take labor market factors into account as well, which could keep interest rates low for longer in times of crisis.

 

 

COMMODITIES

 

 

Oil eases on worries Omicron could reduce demand

 

Oil futures eased on Monday on worries that rising coronavirus cases around the world could reduce crude demand as new doubts emerged about the effectiveness of vaccines against the Omicron variant. The Omicron variant, reported in more than 60 countries, poses a "very high" global risk, with some evidence that it evades vaccine protection, according to the World Health Organization.

 

Gold futures settle at a 3-week high as Fed meeting comes in focus

 

Gold prices climbed Monday to their highest settlement in three weeks, but stuck to a tight trading range ahead of the U.S. Federal Reserve’s gathering this week, which could solidify bullish or bearish momentum for the precious metals complex.

 

 

 

STOCKS

 

 

 

Wall Street falls on Omicron worries ahead of Fed meeting

 

U.S. stocks fell on Monday on worries about the Omicron coronavirus variant ahead of a Federal Reserve meeting later this week, while investors watched Apple close in on $3 trillion in market capitalization. Travel-related stocks fell as the fast-spreading Omicron variant now accounted for around 40% of COVID-19 infections in London and at least one death in the United Kingdom.

 

 

ANALYSIS

 

 

EUR/USD is under downward pressure, 1.10 in the crosshairs – Scotiabank

 

“Over the weekend, Germany’s Foreign Minister Baerbock noted that the Nord Stream 2 pipeline (through the Baltic Sea) cannot be certified as it does not meet requirements of European energy law. Today, Belarus’ Lukashenko warned that his country may halt gas transit through it to Europe if the G-7 deploys new sanctions on Russia over its military threat in Ukraine (the other key path for Russian gas transports to Europe).”

 

 

CHART

 

 

Aussie dollar / Japanese yen – 4-Hour Candlesticks

Source: GKFX Prime Metatrader 4

AUD/JPY has rallied off the September 20 low and is now testing the underside of a downtrend line. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCE

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/eur-usd-is-under-downward-pressure-110-in-the-crosshairs-scotiabank-202112131427
https://www.reuters.com/markets/europe/futures-edge-higher-apple-leads-fed-meeting-awaited-2021-12-13/
https://www.reuters.com/markets/commodities/oil-rises-optimism-omicron-impact-will-be-limited-fuel-demand-2021-12-13/
https://www.investing.com/news/economy/dollar-steady-as-traders-wait-for-central-banks-pound-inches-lower-on-covid-fears-2708879
https://www.fxempire.com/news/article/canada-expected-to-renew-policy-framework-amid-concerns-about-rising-inflation-838402
https://www.msn.com/en-us/money/markets/gold-futures-settle-at-a-3-week-high-as-fed-meeting-comes-in-focus/ar-AARLsNN