Weekly Market Outlook: NFP, OPEC & GDP take centre stage

While the new Omicron Covid variant will dominate the market theme for this week, there are a variety of key economic news announcements also scheduled.

The Canadian dollar (CAD) will be in the spotlight with GDP data released on Tuesday and employment figures on Friday. The CAD was one of the best-performing currencies before last week’s sell-off in commodity currencies and the collapse in oil prices.

Most of the market will be focused on key US announcements this week which includes ISM Manufacturing PMI data on Wednesday and Non-Farm Payroll figures on Friday. The US dollar has been a top performer in recent weeks as a hike in interest rates are being priced in sooner rather than late

Global indices suffered their biggest one-day drops this year as fears surrounding the new Omicron Covid variant saw investors run to the exits. This means safe havens are likely to be in focus this week as well.

You can learn more about some of the global themes affecting the markets in this selection of new education articles.

• What is the DAX40 Index and Why Trade It?
• What is the Dow Jones Index – DJI 30 Investing Strategies
• Trader’s Room Tutorial

Weekly Forex Calendar

Source: Forex Calendar from the MetaTrader 5 trading platform provided by Admirals.  

Trader’s Radar – US Non-Farm Payroll (NFP)

On Friday 3 December at 1.30 pm GMT, the Bureau of Labor Statistics releases its latest report on the unemployment rate, average hourly earnings and non-farm employment change. Data regarding employment is usually a big deal for a currency as it determines the health of the economy.

The US jobs report has been mixed this year, even though other data is showing signs of strong economic growth. However, last month’s huge NFP beat led to an increase in expectations that the Fed will increase interest rates sooner as the jobs market starts to heal.

This led to a surge in the US dollar, with commodity currencies bearing the brunt of the US dollar strength and general risk-off sentiment from the Omicron Covid variant.

Source: Admirals MetaTrader 5, USDX, Monthly – Data range: from 1 Jul 2013 to 27 Nov 2021, performed on 27 Nov 2021 at 7:00 pm GMT. Please note: Past performance is not a reliable indicator of future results.  

The US dollar index has been held in a long-term trading range since 2014. Earlier in the year, the price bounced from the lower support level and has been rising ever since. It has also broken through key resistance lines and is trading at the same level before the pandemic started.

While the move higher in the US dollar is arguably stretched, the long-term uptrend is intact. While the euro and British pound have also been moving lower against the US dollar, the commodity currencies will be ones to watch if the US dollar strength continues (AUD, CAD, NZD, ZAR).

Corporate Trading Updates and Stock Indices

Global stock market indices were hammered last week after a relatively easy ride higher over the past few months. Fears surrounding the spread of the Omicron Covid variant rocked all risk assets around the world.

A correction in global stock indices has been long overdue. This may just be the pullback that longer-term investors may be looking for. The timing is interesting as well due to the typical year-end seasonal rally in equities.

Source: Admirals MetaTrader 5, SP500, Daily – Data range: from 23 Feb 2021 to 27 Nov 2021, performed on 27 Nov 2021 at 6:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. Past five-year performance of the S&P 500: 2020 = +16.17%, 2019 = +29.09%, 2018 = -5.96%, 2017 = +19.08%, 2016 = +8.80 

In last week’s weekly market outlook we highlighted the failure of buyers breaking above the 4710.00 price level and that a move lower could see the price heading towards the 50-day moving average (red line).

Now that this has played out, the 100-day exponential moving average (green line) looks interesting and could be a target level of short-sellers or an entry zone for dip buyers on the longer-term timeframes.

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