IFX Market Report: Tuesday 14th December 2021

Markets traded rather flat on Monday as investors brace themselves ahead of global central bank meetings this week. The US Dollar lost momentum in the afternoon as US Treasury yields fell “as investors readied for the Federal Reserve December policy meeting”. The yield on the benchmark 10-year Treasury note dipped 5 basis points to 1.438%” and the yield on the 30-year Treasury bond “gave up 6.4 basis points to 1.82%”. Also not helping the Greenback was improved market sentiment. Sentiment was lifted “by news from Pfizer and BioNTech that a study found three doses of their vaccine provide a high level of protection against the variant”.

GBPUSD opened the week at 1.3224 and experienced little activity on the day. Cable closed Monday just above where it opened at 1.3232.

GBPEUR in contrast made a minor loss on Monday’s session. The pair opened the day at 1.1729 and closed at 1.1713.

EURUSD was able to advance close to 1.13 on Monday as the Euro capitalized on a weaker US Dollar. The pair started the day at 1.1274 and closed at 1.1297. Despite EURUSD being able to gain some upside yesterday, it’s possible the Euro could come under significant pressure this week as central bank policy takes centre stage. ECB policymakers thus far “have been pushing back on market bets for tighter policy and talked down the need for any action to counter inflation”. The ECB’s dovish stance on inflation is likely to damage the Shared Currency further moving forward.

At 07:00 the UK released September’s Employment Change and October’s Unemployment Rate. Forecasted at 228K, Employment Change came in at 149K. Unemployment Rate printed a final figure of 4.2%. At 10:00, Industrial Production YoY for the Eurozone is expected at 3.2% with a previous of 5.2%.

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