Market Commentary – January 18, 2022

Kevin Jock

18th January 2022

The U.S. markets are closed on Monday for Martin Luther King Jr. day as traders are estimating the implications of declining rates of unemployment and record rates of inflation, with some questioning whether U.S. Fed officials will tighten monetary policy faster than planned.

Across the Atlantic, European stocks rose on Monday as traders weighed recent data showing persistently high rates of U.S. inflation and looked ahead to corporate earnings picking up this week. The regional STOXX 50 index closed up 0.7%, while the FTSE 100, CAC 40 and Dax was up 0.91%, 0.82% and 0.32% respectively.

Australian shares rose in choppy trading on Tuesday, helped by tech stocks and miners with the ASX 200 index remained nearly flat in the morning trading session. Shares of Macau’s top casino operators rose as much as 15% of their market value on Monday, as Macau’s government announced on Friday that the number of new casino operators allowed to function limited to six with an operating period of up to 10 years.

Oil prices jumped to a seven-year high on Monday, threatening to drive global inflation up further as supply remained constrained. Brent crude has ascended 10% in the first two weeks of the year to as much as $86.7 a barrel, exceeding last October’s high. Price of gold remained nearly flat in yesterday’s trading session to finally settle at $1,819.01. While the Japanese Yen continue to weaken against the greenback, currently trading at the level of 114.840.

image_2022_01_18T04_52_09_349Z

Figure 1 (Source: IS Prime) CC.BTC.USD Daily : Comparatively less enthusiastic start to Bitcoin when compared to 2021, remaining subdue thus far in 2022, ranging between 40,000 – 45,000.

Headliner to Review

  • The Chinese GDP increased by 1.6% q/q (4% y/y) in the last quarter of 2021 and the growth outlook stabilized but at a lower level than before. Both COVID-19 and challenges in the real estate sector will continue to dampen growth.

Headliner to Watch

  • The UK CPI figure is due to announce on Wednesday, expected to be 5.2% compared to the previous month of 5.1%. Its inflation has already risen to a decade high and soaring utility bills look set to drive it still higher in coming months.
  • The Canadian CPI figure is also due to release, forecasted to decline marginally by 0.1%.

Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice.

Authors:
Antony Tan
Kerry Man