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Eurozone

November current account balance in the Eurozone €23.6 billion compared. €18.1 billion before.

 Eurostat statistics as of 19 January 2022.  

Prior €18.1 billion

Surpluses for services (€23 billion) and commodities (€16 billion) were recorded, according to the figures. These were somewhat offset by a secondary income deficit (€15 billion), while primary income was balanced.

Oil market

Despite the omicron wave, oil demand increased by 1.1 million barrels per day in Q4 2021 to 99 million barrels per day.

However, supply will soon outpace demand as some producers plan to pump at or beyond all-time highs A steady increase in supply might result in a major surplus in Q1 2022 and beyond.

The United States, Canada, and Brazil are expected to pump at all-time highs this year. Russia and Saudi Arabia may also set new output records.

One can understand where they’re coming from since it’s part of the ongoing oil market discussion, which was stated at the end of last year.

But, for the time being, it does not appear like output is exploding, which has been a significant boost to pricing previously. There are very compelling grounds for a tighter market, especially if US supply fails to live up to expectations.

Forex Pairs

• Here are some forex pairings that may surprise you by plummeting dramatically in a short period of time.
• GBP/JPY; There is no question that the Japanese Yen is a safe haven asset. As a result, the currency surged amid the omicron spread as investors sought to place their cash in the most stable currencies, namely the Yen and Swiss Franc. As a consequence, the currency gained about 2000 points versus the GBP in the previous week, but we are currently seeing negative statistics both technically and fundamentally.
• In terms of fundamentals, Japan has an inflation rate of roughly 0.5 percent. It is significantly higher than a year ago (Japan is one of the countries with deflation, which means that the Yen tends to become more expensive with time).
• Nonetheless, 0.5 percent in Japan is difficult to compare to almost 7 percent in the United States or 5% in the European Union. As a result, the Bank of Japan is expected to maintain its dovish stance. When you combine this with hawkish comments from other nations’ central banks, you get the picture. Fundamentally, in the absence of rate rises, the yen appears weaker against other currencies.
• In GBP/JPY, we see an incomplete inversed head and shoulders pattern. It is a pattern of reversal. As a result, we anticipate that the GBP will appreciate against the Yen and reach 157.7 in the short future.

 Dip buyers

Dip buyers start to stand their ground

US futures trim losses to end the day even. S&P 500 futures -0.1 percent, Nasdaq futures are unchanged. Dow futures are down 0.1%.

Just when we thought equities were dead, dip buyers showed up in force. Nasdaq futures were testing its 200-day moving average but have now moved away from it, indicating that the cash market still has some work to do.

There does not appear to be any significant news to account for the increase, especially while bond rates remain around all-time highs.

We’ll see if this can hold closer to US trade, otherwise it’ll be a bit of a setback for stocks if it doesn’t. In any event, I expect this will lead to a bit more two-way action on Wall Street in the future, but only time will tell.