Article Hero

World economies in trouble, as delta variant raises more concerns - Market Overview

1629190010.png
Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
Australian authorities extended Melbourne’s lockdown for another two weeks, while Japan prolonged the state of emergency measures until mid-September.

The effects on the economic side were reflected yesterday in China, where industrial production for July fell to 6.4% from 8.3% in June. The market had forecasted a 7.8% result.

In the United States, N.Y. Empire State manufacturing business index for August fell to 18.30 from 43.0 in July. Although the report is well-known for its volatility, this latest decrease is notable, in line with the University of Michigan report published on Friday.

From a geopolitical perspective, concerns about the situation in Afghanistan add to the feeling of uncertainty among investors.

In such a scenario of increased risk aversion, U.S. Treasury Bond yields pressed downwards, with the 10-year T-note falling to 1.24%.

Stock markets also dropped, starting with the Japanese Nikkei and continuing with the European and North American indices, especially the Tech100 index, which lost 1% during the session, falling to 14.926.

However, the index recovered almost all the lost ground during the trading session. However, it was still showing signs of vulnerability, as the Federal Reserve could announce the withdrawal of stimulus as soon as in September, according to an article from the Wall Street Journal.

In the currency market, the yen acted as a safe-haven currency, strengthening against its main competitors. The pair which experienced the most significant fall was the CAD/JPY. In addition to the strengthening of the Japanese currency, CAD/JPY was impacted by the weakness of the Canadian dollar, dragged down by oil’s weakness, which fell to the main support zone located at 66.40.

From a technical analysis perspective, CAD/JPY is closer to the 85.80 level, which is the neckline of a large head & shoulders pattern that started last March.

Sources: Bloomberg, reuters.com.

This information prepared by capex.com/za is not an offer or a solicitation for the purpose of purchase or sale of any financial products referred to herein or to enter into any legal relations, nor an advice or a recommendation with respect to such financial products.This information is prepared for general circulation. It does not regard to the specific investment objectives, financial situation, or the particular needs of any recipient.You should independently evaluate each financial product and consider the suitability of such a financial product, by taking into account your specific investment objectives, financial situation, or particular needs, and by consulting an independent financial adviser as needed, before dealing in any financial products mentioned in this document.This information may not be published, circulated, reproduced, or distributed in whole or in part to any other person without the Company’s prior written consent.
Past performance is not always indicative of likely or future performance. Any views or opinions presented are solely those of the author and do not necessarily represent those of capex.com/zaJME Financial Services (Pty) Ltd trading as CAPEX.COM/ZA acts as intermediary between the investor and Magnasale Trading Ltd, the counterparty to the contract for difference purchased by the Investor via CAPEX.COM/ZA, authorised & regulated by the Cyprus Securities and Exchange Commission with license number 264/15.  Magnasale Trading Ltd is the principal to the CFD purchased by investors.

Share this article

How did you find this article?

Awful
Ok
Great
Awesome

Read More

Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.