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FITCH LOWERS TURKEY'S SOVEREIGN RATING OUTLOOK



Fitch Ratings downgraded the outlook on Turkey's sovereign ratings to Negative from Stable, citing various risks to macroeconomic and financial stability and potential external financing pressures.

The rating agency said the central bank's premature monetary policy easing cycle and the prospect of further rate cuts or additional economic stimulus ahead of the 2023 presidential election have led to a deterioration in domestic confidence, reflected in a sharp depreciation of the Turkish lira and rising inflation.

These developments create risks to macroeconomic and financial stability and could potentially re-ignite external financing pressures, Fitch noted.

Further, the agency viewed that the proximity of the 2023 electoral cycle will have an impact on policy direction and expectations of economic actors.

The sovereign ratings were affirmed at 'BB-'. The credit ratings reflect weak monetary policy credibility, high inflation, low external liquidity in the context of high financing requirements and geopolitical risks.

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AUSTRALIA DATA ON TAP FOR MONDAY



Australia will on Monday see November figures for job ads and inflation, highlighting a light day for Asia-Pacific economic activity.

In October, the job advertisement survey from ANZ was up 6.2 percent on month, while the inflation gauge from TD Securities was up 0.2 percent on month.

Also, the markets in Thailand are closed on Monday in observance of the late King Bhumibol's birthday; they'll re-open on Tuesday.

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EUR/USD: Euro believed in itself and pushed the US dollar aside



The European currency was under strong pressure at the beginning of this week, fluctuating on the verge of a serious collapse. However, it found balance and tried to rise, pulling the EUR/USD pair to a new level.

In view of a relatively volatile US dollar, the euro steadily fell, occasionally rising to an acceptable level. Experts did not give it a chance, because the ECB's "dovish" strategy was acting against it. It can be recalled that the European regulator adheres to the position of non-interference in the current monetary policy, refusing to curtail incentives and raise rates. It seems that the ECB is following the path of the Fed, which until recently insisted on the "temporary" nature of inflation. Now, its European colleague is doing this.

The US currency retains its basic strength against the European one. It is supported by market expectations about the tightening of the Fed's monetary policy and the prospect of a rate hike in May next year. According to preliminary calculations, three rate increases are expected in 2022, starting from the last month of spring. This decision is facilitated by the revival of inflation expectations in the United States, which recovered after falling to the highs of November 2021.

Analysts explain the current strengthening of the indicator by the "hawkish" attitude of the Fed, whose representatives ignored weak data on the US labor market (nonfarm payrolls). The focus is on the upcoming report on US inflation, which may cover the negative impact of Nonfarm data. According to preliminary estimates, US consumer prices in November increased to 6.7% year-on-year.

At the moment, there is a situation in the market that is not too favorable for the US currency. Experts have recorded an increase in risk sentiment and a departure from the "safe haven" currencies, primarily from the USD. On Wednesday morning, the EUR/USD pair was trading at the level of 1.1294. The euro managed to make an upturn and catch up a little. A day earlier, the Euro currency was trading in the range of 1.1263-1.1266.

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AUD/USD: Australian dollar is on upswing



The Australian dollar is growing on increased risk appetite, pushing new highs. However, it could be a short-term rise, analysts warn.

AUD started the week on an uptrend and extended it on Tuesday, making the biggest gains in six weeks. AUD/USD added 0.6% on Tuesday and reached 0.7091. The rally was triggered by the meeting of the Reserve Bank of Australia, which left the key interest rate at the record low level of 0.10%. On Wednesday, the Australian currency reached the weekly high on increased risk appetite. AUD/USD slightly rebounded but remained on the upswing, hovering near 0.7135.

The Australian dollar rose on positive news regarding the new Omicron strain of COVID-19, which could be less severe than previously anticipated. According to Philip Lowe, governor of the Reserve Bank of Australia, the emergence of Omicron is "a new source of uncertainty", but it won't obstruct the economic recovery.

A preliminary outlook suggests that Australian economy would reach pre-pandemic levels in the first half of 2022. By downplaying Omicron risks, the regulator hinted at an earlier interest rate hike. Earlier, the RBA warned it would not raise the rate until 2023. The markets have already priced in a possible rate hike, as market players expect a change in monetary policy by July 2022.

Improving business sentiment in Asia and rising iron ore prices also gave support to the Aussie. AUD was also boosted by improved outlook of the Reserve Bank of Australia on economic recovery. According to Philip Lowe, household consumption and the labor market are expected to recover by the end of 2021, along with a further rise of salaries and increased investments. The high level of vaccination in Australia and the resulting collective immunity is the likely reason to Omicron's low impact on the Australian economy. As a result, the country could avoid new lockdowns and put its economy back on track.

Decreasing unemployment is another positive factor for Australia - in November, the amount of job vacancies exceeded the pre-pandemic level by 44%. An outlook by ANZ sees unemployment fall to 4% by the end of 2022, while wages growth would rise to 3%. Thanks to relaxed quarantine measures boosting the Australian economy, the amount of job vacancies soared by 7.4% in November, as companies actively increased their spending.

AUD has also found support in rising inflation expectations. The RBA expects inflation to reach 2.5% in 2023. Currently, the base inflation rate is near the lower end of the inflation target range of 2-3%. Given the current situation, the regulator is open to revising its bond buying program, as well as potentially cancelling it in February 2022. The end of QE stimulus and positive economic trends push the Australian dollar up.

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Inflation, Fed and ECB meeting: Degree of nervousness is growing, steep voyage to dollar and euro is guaranteed



We dreamed about the growth of the euro and that's enough. The harsh reality suggests that any bounce in the EUR/USD pair will be short-lived and insignificant. Bulls are left to put on a good face with a bad game.

In the markets, it is not difficult to notice a general cooling to risk. The optimistic mood that prevailed at the beginning of the week began to decline and, to some extent, even gave way to skepticism. Investors assess the situation with the new strain more soberly and try not to react to all messages in a row. Three doses of Pfizer's vaccine should protect against Omicron, but this is just initial laboratory testing and time will tell how it actually works under the new circumstances.

Convincing positive statements have not yet been reported; instead, a new variant of the virus has been detected in almost 60 countries around the world, and WHO is confident that the number will continue to grow. Such a background can quickly return stock markets to a bearish correction mode. Potentially high inflation data in the US, which will be published on Friday, also speaks in favor of this scenario. Annual inflation is expected to accelerate to 6.8% in November, the highest since 1982.

Markets are preparing to evaluate this report and will gradually switch to meetings of the world's central banks (US, England, EU and Japan) next week. Another jump in US inflation will increase the chances of a more aggressive Fed tightening. At the end of the week, profit-taking will be justified, including on the eve of the FOMC meeting.

In this context, it will be most interesting to observe the EUR/USD pair. Given the Fed's hawkish rhetoric and the ECB's reluctance to respond to accelerating inflation, the downside risks for the euro are quite high. The stronger the contrast between the central bank, the deeper the quotes of the pair may sink.

This week, the euro tried to rebound from the lows, which somewhat encouraged bulls and even misled. Nevertheless, relying on the available information, the single currency has no chance of a victorious rise against the dollar.

Some market players stubbornly continue to admit the possibility of a change in the ECB's rhetoric. The leader of the financial flock - the Fed - has changed its attitude to inflation, now it is Europe's turn. At least this happens, if not always, then often. The ECB is basically copying the moves of the Fed. How will it be this time? The pandemic has changed everyone and everyone who knows what will happen next ...

Regarding the recent rise in EUR/USD above 1.1300, the euro could benefit from the sharp jump in the EUR/GBP rate. This dynamic was fueled by reports of new COVID-19 restrictions being introduced in the UK.

On Thursday, the euro sank again, in the American session the dollar increased after the publication of the weekly data on the US labor market. The number of initial applications for unemployment benefits fell by 43,000 compared with the revised figure of the previous week, to 184,000. The value was the lowest since September 1969.

The situation looks like the euro is likely to continue to decline to the 1.1200 area. The dynamics that we have seen this week can only be called volatility in the range of 1.1200-1.1350. Until the Fed and ECB meetings next week, the market just decided to wait out in a range.



If you look at the technical picture, then it is more likely not sideways, but a converging triangle-pennant. In other words, the market deals with the continuation of the trend, that is, with the decline.

If the level of 1.1200 is broken at the end of the week, the EUR/USD pair will go to new lows to 1.1100 and below. In any case, until the quote breaks through the 1.1400 mark, it will be at least wrong to expect an upward trend.

Scotiabank and Nomura are still waiting for the euro to reach 1.1000. Analysts believe that the downside risk will diminish only if the 1.1434 level is broken.

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The dollar is plagued with doubts: Will there be a pre-New Year rally?



Judging by the latest data, the peak of inflation has not been passed, the rise in prices continues to eat into the economy. As predicted, U.S. annual inflation accelerated to a 40-year high, or 6.8%, in November. In theory, this should force the Central Bank to increase its efforts to combat it. It is believed that the new numbers will not have much of an impact on the Fed's

December monetary policy meeting. Despite the fact that Federal Reserve Chair Jerome Powell spoke about the occurrence of unpleasant surprises, if he does not accelerate the process of abandoning bond purchases, next week there may be a confrontation between the doves and the hawks of the Fed.

The former will look for signs of a short-term weakening in the growth of prices for goods sold. Gasoline prices, for example, have been declining for a month. The latter focuses on the penetration of inflation in such areas as rent. The CPI will also be taken into account with its important component – inflation expectations.

In the meantime, the markets are laying down a high probability that the Fed will double the pace of curtailing incentives with the expectation of completing QE in March or April. Thus, the first-rate increase may occur in May. There is a 63% probability for such a scenario development. One increase by the end of 2022 is estimated at 98%, two – at 89.5, and three - at 67%.

Yes, Powell has switched to the side of the hawks, investors' expectations look too optimistic somehow. What if inflation starts to slow down? After the crisis of 2008, inflation began to recover quite quickly, while economic growth remained unstable.

Perhaps America is already approaching an inflationary peak, given the growth of the dollar index by 8% in six months and a decrease in the intensity of logistical problems. Of course, there is no question of returning to the target of 2%. A temporary stop somewhere in the region of 4% would be quite a suitable option.

Otherwise, the Fed will have to move away from the zero interest rate policy. However, it is not a fact that the regulator will start acting from the series right now. The most reasonable thing, as economists like to say, is to leave the door open for a faster tightening of monetary policy.

Dollar forecast

As for the dollar, analysts predict that its direction will remain bullish in the coming days. There is no other way here yet: The Fed should accelerate the curtailment of QE, while other regulators, including the ECB and the Bank of Japan, take a much less hawkish position.

The fact that the U.S. currency index broke through and held above 94.65 indicates its long-term bullish positioning. The technical picture will remain on its side, even if it shows weakness at some point.



Growth towards the upper limit of the 6-year range looks quite viable. The main target remains the level of 100.00, especially considering that the greenback failed to stay above it several times.

The outlook for the dollar will look very attractive, at least until other Central Banks are revived. Next week, the meetings of the Bank of England and the ECB are scheduled. They will not raise rates - it is not even discussed, but they will hint at the possibility of taking action in response to inflation. Even these words will be enough to lift their national currencies from their knees. The question is, will they do it?

It is important to understand that the dollar will not grow forever either. Given the expected tax hike and tighter monetary policy, the greenback could soon form a top.

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European equities closed lower



Britain's FTSE 100 shed 0.8%, Germany's DAX shed 0.01%, France's CAC 40 shed 0.7%, Spain's IBEX 35 shed 0.5% and Italy's FTSE MIB shed 0.6%. Air France-KLM shares lost 3.4%. The airline said it had paid the French authorities € 500 million in debt repayment totaling € 4 billion. In addition,

Air France-KLM agreed with the country's authorities to change the debt repayment schedule: if earlier it had to pay off the debt in full in May 2023, now it will be able to pay it off until May 2025.

Germany's Daimler Truck Holding AG, a truck maker, rose 10.7% in its second trading session after divesting from Daimler. JPMorgan analysts have set the target price for the company's shares at 48 euros per share, while Bank of America has set a different price, 40 euros. At the same time, Daimler AG's value fell 0.3% yesterday.

The capitalization of the German software developer SAP AG increased by 2.6% after analysts at UBS improved the recommendation on the stock of the company from neutral to buy.

Australian biopharmaceutical company CSL has confirmed that it is in talks to buy the Swiss drug manufacturer Vifor Pharma. Vifor Pharma shares jumped 18.5%.

Credit Suisse Group AG on Monday announced a structural reorganization and appointed new chief executives for its core divisions. The structure of the bank from next year will consist of 4 main business divisions and 4 regional divisions. Credit Suisse lost 1.8%.

Shares in British mining company Rio Tinto fell 0.1%. The company will write off $ 2.3 billion in debt from the Mongolian government to finally move forward with the expansion of the Oyu Tolgoi gold-copper project.

The market is awaiting meetings of the world's largest central banks scheduled for this week.

The Federal Reserve System (FRS) is holding a two-day meeting on December 14-15, the European Central Bank (ECB) and the Bank of England will release their decisions on December 16, the Bank of Japan will hold a meeting on December 17.

The ECB is expected to discuss at the upcoming meeting the future prospects for its asset repurchase programs, while the Fed may decide to step up the pace of its quantitative easing (QE) program, which it launched in November.

The Bank of England is likely to keep monetary policy parameters unchanged, as the latest GDP data proved disappointing, and in addition, the country's authorities are introducing new restrictions to contain the spread of COVID-19.

The UK National Statistical Office (ONS) on Friday reported a slowdown in the country's GDP growth in October to 4.6% on an annualized basis from 5.3% a month earlier.

The statistics released on Monday showed an acceleration in the growth of wholesale prices in Germany in November to a record 16.6% in annual terms. As noted by the Federal Statistical Office of Germany (Destatis), the growth of wholesale prices accelerated compared to 15.2% in October against the background of higher prices for raw materials and intermediate goods.

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Eurozone production rises - economic recovery pushes numbers up

According to the report, eurozone industrial production increased in October - the forecasts of economists came true. At the same time, the largest increase in comparison with the previous month was shown by the sector of production of consumer goods and durable goods, and the volume of production of short-term goods is even leading year-on-year.

Manufacturing in the eurozone is growing - the economic recovery pushes the numbers up



The statistical office Eurostat reported that industrial production in 19 countries using the euro increased by 1.1% in October compared to the previous month. This is 3.3% more compared to the same period last year. Median estimates of economists predicted growth of 1.2% per month and 3.2% per year.

Eurostat reported that compared with September, the volume of industrial production of goods produced with the attraction of investments increased by 3.0% after falls in August and September. On an annualized basis, the production of such goods increased by 5.2%, which shows the volume of flows that hit the financial and production segments.

The output of durable goods also rose sharply, increasing by 1.7% for the month and 2.3% for the year, while the production of consumer goods for short-term use was 6.9% higher than a year earlier, continuing the general trend of strong growth in the previous months.

Of course, the economic recovery will not last forever. Some economists even believe that a sharp rise in demand, combined with supply disruptions and further quarantine measures, may over-stimulate inflation. Nevertheless, against the background of restrictions in energy resources, the recovery of the eurozone economy looks optimistic.

This is likely to push the euro up, especially against the background of sad news from the United States about the growth of consumer prices. March Euro Stoxx 50 futures have grown well after the release of the data.

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US shares higher at close of trade; Dow Jones up 1.08%



At the close in New York, the Dow Jones gained 1.08%, the S&P 500 climbed 1.63% and the NASDAQ Composite rose 2.15%.

In the leaders of growth among the components of the Dow Jones at the end of today's trading were shares of Cisco Systems Inc, which rose in price by 2.16 points (3.74%), to close at 59.93. UnitedHealth Group Incorporated rose 3.11% or 14.92 points to end at 494.38. Apple Inc rose 2.85% or 4.97 points to end at 179.30.

The biggest losers were Nike Inc, which fell 0.91% or 1.50 points to end the session at 163.90. JPMorgan Chase & Co is up 0.75% or 1.19 points to end at 157.94, while Chevron Corp is down 0.57% or 0.66 points to 115. , 56.

Eli Lilly and Company, which gained 10.39% to 275.28, and Advanced Micro Devices Inc, gained 8.04% to close at 146.50, were the top performers among the S&P 500 index components at the end of today's trading. and NVIDIA Corporation, which rose 7.49% to end the session at 304.59.

The biggest decline was led by Nucor Corp, which fell 8.61% to close at 108.22. Medtronic PLC shed 6.04% to end the session at 104.94. Newmont Goldcorp Corp was down 3.45% to 54.23.

The leaders of growth among the components of the NASDAQ Composite index at the end of today's trading were the shares of Theseus Pharmaceuticals Inc, which rose 34.12% to 12.58, CMC Materials Inc, which gained 33.93%, to close at 195.50, and also Biofrontera Inc, which rose 26.36% to end at 6.95.

The biggest losers were ATAI Life Sciences BV, which fell 31.94% to close at 6.82. Pulmatrix Inc shed 31.58% to trade at 0.4851. China Xiangtai Food Co Ltd was down 28.17% to 1.8100.

On the New York Stock Exchange, the number of securities that gained in price (2,151) exceeded the number of securities that closed in the red (1109), while the quotations of 149 shares remained practically unchanged. On the NASDAQ stock exchange, 2,462 companies rose in price, 1,332 declined, and 218 remained at the level of the previous close.

Eli Lilly and Company rose to an all-time high, climbing 10.39%, 25.90 points, to close at 275.28. Medtronic PLC shares fell to a 52-week low, down 6.04%, 6.75 points to 104.94. Cisco Systems Inc rose to the all-time high, climbing 3.74%, 2.16 points to trade at 59.93. UnitedHealth Group Incorporated rose to an all-time high, gaining 3.11%, 14.92 points to trade at 494.38. ATAI Life Sciences BV shares fell to historic lows, shedding 31.94%, 3.20 points to end at 6.82. Pulmatrix Inc shares fell to historic lows, down 31.58%, 0.2239 points to trade at 0.4851.

The CBOE Volatility Index, which measures the value of S&P 500 options trading, was down 11.88% to trade at 19.29.

Gold Futures for February delivery was up 0.29% or 5.10 to $ 1,777.40 a troy ounce. In other commodities, WTI crude for January delivery rose 1.05%, or 0.74, to $ 71.47 a barrel. Futures contracts for Brent oil for February delivery fell 0.01% or 0.01 to trade at $ 74.31 a barrel.

Meanwhile, on the Forex market, the EUR / USD pair was up 0.09% to hit 1.1295, while the USD / JPY was up 0.00% to hit 114.03.

The US Dollar Index Futures was down 0.25% at 96.293.



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Fed's "hawkish" rhetoric last week supported the US dollar. Now, where will the complicated path of inflation take this currency?



The US currency is in the hands of inflation but is trying to consolidate in an upward trend, and it did not succeed. The desire of this currency to benefit from a difficult situation provides it with leadership among other currencies.

According to analysts, inflation has a complicated path, so it is difficult to predict where it will lead the US dollar. Meanwhile, the Fed's hawkish tactics, which the regulator showed last week, helped it. As a result, the US currency got stronger and continues to move in an upward spiral.

The US dollar rose after the Fed's meeting, against the background of statements by the regulator about the high probability of an early curtailment of incentives and an increase in interest rates in March 2022. On Monday morning, it was around the highest level recorded since July 2020. The EUR/USD pair was trading at the level of 1.1253, while the euro slightly lost its position, which it successfully gained last Friday.



However, the off-the-scale inflation that is recorded not only in the United States but also in a number of other countries has worsened the situation in the financial markets. The "hawkish" turn in the Fed's strategy led to a mass flight of investors into safe-haven currencies, primarily the US dollar. In view of this, there was a strong rally in US Treasury bonds. Many analysts believe that the narrowing of the Fed's balance sheet and multiple rate hikes will lead to a sharp reduction in the share of borrowed funds. This may negatively affect the state of the real economy and the inflation rate, as well as further decisions of the regulator regarding rates. According to analysts at Saxo Bank, "the luxury that the Fed does not have now is the ability to ignore inflation, which will decrease under any easing scenario if asset markets do not collapse amid a sharp reduction in risk appetites."

Currently, the global bond market is seriously concerned about the fate of the US economy. Even if inflation slows down, that is, under a favorable scenario, it is too early to rejoice: the damage to the American economy has already been done, and prices are still quite high, despite the measures taken by the Fed. It can be recalled that in the late 1970s - early 1980s of the twentieth century, Former Fed Chairman P. Volcker increased the base rate of federal funds more than twice (from 9% to 20%) in the course of solving extremely high inflation, which reached 13%. As a result, the United States economy was in a severe crisis in 1982, but by the end of that year, inflation had fallen to 5%. At the same time, the base rate on federal funds has returned to 9%. However, the American authorities now are trying to prevent such a development. They seek to prevent possible negative consequences of accelerated inflation: mass unemployment, a significant drop in living standards, and stagnation of the national economy.

Regarding the future fate of the US dollar, experts agree on its weakening as a means of payment, which is used between countries outside the United States. However, as the main world currency, USD remains the undisputed leader. Most reserve currencies are less in demand than greenbacks. According to experts, non-dollar assets are still inferior to dollar assets, although the world's central banks diversify their currency portfolios in a timely manner, reducing the share of USD investments and increasing stocks of the euro, yuan, British pound, etc.

Currently, the US currency is rarely used in settlements in the countries of Southeast Asia: the yuan is used here, and the euro is used in Europe. At the same time, the US share in global GDP does not exceed 23%-24%, which negatively affects the dynamics of the US dollar. According to forecasts, it will decline to 20% by the end of this decade, and this will significantly weaken its position.

However, the temporary weakness of the US dollar does not mean that other currencies are strong enough to take the lead. Experts are sure that its weakness will not lead to its disappearance. In the third decade of the XXI century, it will retain its dominant position against the background of the lack of serious potential for other currencies. None of them can compete with the US dollar, not even the euro.

Analysts said that sustainable economic development will become a catalyst for the growth of the global stock market in 2022. At the same time, managers of a number of large companies consider the "hawkish rush" of central banks to be the biggest risk for most stocks. The US dollar will end this year at its highest recorded in the last 6 years. According to experts, the key factors behind the strengthening of the US currency are the upcoming rate hike and the reduction in the Fed's balance sheet. In 2022, some currency strategists are forecasting four interest rate hikes instead of three. In this situation, experts recommend buying the US dollar and selling other currencies.

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Forex Analysis & Reviews: Forecast for EUR/USD on December 21, 2021



The US dollar, which experienced victory recently, is forced to retreat under the pressure of the Fed's hawkish actions and investors' avoidance of risk. However, this currency does not intend to give up and plans to recover its current losses.

Investors' refusal to buy risky assets amid renewed fears about the spread of the Omicron coronavirus strain facilitated the pullback of the US currency. On Monday evening, some panic gripped the markets, so the US and European stock indices went into the negative zone. In this situation, risk aversion puts pressure on the yield of US Treasuries and limits the growth of the US dollar.

On the other hand, the price of the euro has increased correctively against the American one, and is now heading into an upward spiral. On Tuesday morning, the EUR/USD pair was trading at the level of 1.1280, trying to further rise. At the same time, the US dollar fell below current highs, losing its previous gains after hitting plans to implement an infrastructure plan initiated by US President Joe Biden.



The news about the possible refusal of the US Senate to accept a large package of infrastructure spending (Build Back Better) shocked investors. Previously, its approval was taken for granted, but some representatives of the Democratic Party unexpectedly announced their readiness to vote against it. The reason lies in the significant burden on the American economy, which may not be able to withstand such costs.

Earlier, representatives of the largest bank Goldman Sachs excluded fiscal stimulus for the US economy from their baseline scenario and downgraded its growth forecast to 2% in the first quarter of 2022 (from the previous 3%), and to 3% in the second quarter (from the previously announced 3.5%) and up to 2.75% in the third quarter (from the previous 3%). Bank representatives also doubt that the first increase in the Fed's federal funds rate will occur in March 2022.

The current situation keeps the market participants thrilled. Many traders and investors believe that the failure to approve the infrastructure spending package will force the Fed to postpone the rate increase. As a result, their increase, planned for the first half of next year, as well as the easing of the stimulus package, may be postponed for a long time.

Regarding the prospects of the European currency, analysts do not have much hope. According to Marshall Gittler, head of investment research at BDSwiss, the euro in the EUR/USD pair will continue to weaken, despite the short-term current growth. Its further decline is possible if the ECB maintains its soft monetary policy. It can be recalled that last Thursday, the European regulator expectedly kept the interest rate on loans at zero, and the rate on deposits at -0.5%.

The ECB Governing Council believes that key rates will remain at current levels until inflation reaches the 2% target. At the same time, Pablo Hernandez de Cos, a representative of the Governing Council of the ECB and the Central Bank of Spain, announced yesterday an "unlikely" rate hike in 2022.

Experts assess the risks of a deterioration in the European economy as small, despite the worsening situation with the spread of new mutations of the coronavirus. ECB President Christine Lagarde said that the tense situation with COVID-19 could negatively affect economic growth in the long term. According to her assessment, economic activity in the region slowed down in the fourth quarter of 2021, but at the beginning of next year, a moderate economic recovery will continue.

The absence of a traditional New Year rally added pessimism to the market. The reasons for this are the pressure on the US stock market amid problems related to the support program, and the uncertainty about the implementation of the Fed's decisions on raising rates and curtailing incentives Analysts emphasize that the tightening of monetary policy of the US regulator is currently under threat. This adds problems to the US dollar, whose dynamics are weak. Nevertheless, it has the strength for further recovery, which is not far off.

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US shares higher at close of trade; Dow Jones up 1.60%



At the close in New York, the Dow Jones climbed 1.60%, the S&P 500 gained 1.78% and the NASDAQ Composite rose 2.40%.

In the leaders of growth among the components of the Dow Jones at the end of today's trading were shares of Nike Inc, which rose in price by 9.65 points (6.15%), to close at 166.63. Boeing Co rose 5.86% or 11.04 points to end at 199.52. American Express Company added 3.22% or 5.02 points to close at 160.91.

The biggest losers were Merck & Company Inc, which fell 1.14% or 0.87 points to end the session at 75.54. Verizon Communications Inc rose 0.58% or 0.31 points to end at 52.78, while Johnson & Johnson was down 0.32% or 0.54 points to 167. , 21.

The growth leaders among the S&P 500 index components at the end of today's trading were Citrix Systems Inc, which gained 13.63% to 95.05, Micron Technology Inc, which gained 10.54% to close at 90.68, and also Expedia Inc, which was up 9.14% to end at 177.27. The biggest losers were General Mills Inc, which fell 4.03% to close at 65.06. The Kroger Company shed 3.60% to end the session at 43.87. Pfizer Inc was down 3.39% to 58.95.

The leaders of growth among the components of the NASDAQ Composite index at the end of today's trading were shares of Reliance Global Group Inc, which rose in price by 78.69% to the level of 5.450, Biofrontera Inc, which gained 44.75%, to close at 11.03, as well as shares IsoPlexis Corp rose 40.82% to end at 6.90.

On the New York Stock Exchange, the number of shares that went up (2,671) exceeded the number of those that closed in the red (604), while the quotes of 88 shares remained practically unchanged. On the NASDAQ stock exchange, 2889 companies rose in price, 880 declined, and 215 remained at the level of the previous close.

Aldeyra The shares fell to a 52-week low, shedding 50.91%, 3.63 points to trade at 3.50. Biofrontera Inc rose to an all-time high, gaining 44.75%, 3.41 points, to trade at 11.03. DBV Technologies shares fell to historic lows, down 48.52%, 1.310 points, and ended trading at 1.390. CytomX Therapeutics Inc fell to a 52-week low, down 40.00%, 2.580 points to trade at 3.870.

The CBOE Volatility Index, which measures the value of S&P 500 options trading, was down 8.13% to trade at 21.01.

Gold Futures for February delivery was down 0.28% or 5.05 to $ 1,789.55 a troy ounce. Elsewhere, WTI crude for February delivery rose 3.92%, or 2.69, to $ 71.30 a barrel. Futures contract for Brent oil for February delivery was flat 0.00%, or 0.00, to trade at $ 74.03 a barrel.

Meanwhile, on the Forex market, the EUR / USD pair was up 0.02% to hit 1.1286, while the USD / JPY was up 0.01% to hit 114.10.

The US Dollar Index Futures was down 0.10% at 96.445.

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US shares higher at close of trade; Dow Jones up 0.74%



At the close in New York, the Dow Jones gained 0.74%, the S&P 500 climbed 1.02% and the NASDAQ Composite rose 1.18%.

In the leaders of growth among the components of the Dow Jones at the end of today's trading were shares of Caterpillar Inc, which rose in price by 3.84 points (1.94%), to close at 202.15. Microsoft Corporation added 1.81% or 5.91 points to end trading at 333.20. Apple Inc rose 1.53% or 2.65 points to close at 175.64.

The biggest losers were Nike Inc, which fell 0.71% or 1.19 points to end the session at 165.44. The Travelers Companies Inc was up 0.53% or 0.83 points to end at 154.69 and 3M Company was down 0.16% or 0.28 points to 172. , 64.

The leaders of growth among the components of the S&P 500 index at the end of today's trading were shares of Tesla Inc, which rose in price by 7.49% to the level of 1.008.87, Paychex Inc, which gained 5.52%, to close at 133.41, as well as shares CF Industries Holdings Inc, which rose 4.58% to end at 71.73.

The biggest losers were CarMax Inc, which fell 6.66% to close at 127.87. Moderna Inc shed 6.26% to trade at 251.36. Cintas Corporation was down 1.81% to 428.89.

BiondVax Pharmaceuticals Ltd ADR, which gained 97.30% to 2.920, and Society Pass Inc gained 53.43% to close at 16.31, and also Acasti Pharma Inc rose 52.25% to end 1.6900.

The biggest losers were Allakos Inc, which fell 89.87% to close at 8.55. AgileThought Inc shed 30.40% to end the session at 6.410. CalAmp Corp was down 25.78% to 7.34.

On the New York Stock Exchange, the number of securities that rose in price (2,382) exceeded the number of securities that closed in the red (861), while the quotations of 138 shares remained practically unchanged. On the NASDAQ stock exchange, 2294 companies rose in price, 1524 declined, and 220 remained at the level of the previous close.

Paychex Inc rose to an all-time high, gaining 5.52%, 6.98 points to trade at 133.41. CF Industries Holdings Inc rose to an all-time high, gaining 4.58%, 3.14 points to trade at 71.73. Allakos Inc shares fell to historic lows, falling 89.87%, 75.84 points to trade at 8.55. AgileThought Inc fell to historic lows, down 30.40%, 2,800 points to end at 6.410. CalAmp Corp fell to a 52-week low, down 25.78%, 2.55 points to trade at 7.34.

The CBOE Volatility Index, which measures the value of S&P 500 options trading, was down 11.33% to trade at 18.63.

Gold Futures for February delivery was up 0.89% or 15.95 to $ 1.804.65 a troy ounce. Elsewhere in commodities, WTI crude for February delivery rose 2.64%, or 1.88, to $ 73.00 a barrel. Futures contracts for Brent oil for March delivery fell 0.03%, or 0.02, to trade at $ 75.58 a barrel.

Meanwhile, on the Forex market, the EUR / USD pair was flat 0.00% to hit 1.1324, while USD / JPY fell 0.01% to hit 114.10.

The US Dollar Index Futures was down 0.42% at 96.085.

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US shares higher at close of trade; Dow Jones up 0.74%



At the close in New York, the Dow Jones gained 0.74%, the S&P 500 climbed 1.02% and the NASDAQ Composite rose 1.18%.

In the leaders of growth among the components of the Dow Jones at the end of today's trading were shares of Caterpillar Inc, which rose in price by 3.84 points (1.94%), to close at 202.15. Microsoft Corporation added 1.81% or 5.91 points to end trading at 333.20. Apple Inc rose 1.53% or 2.65 points to close at 175.64.

The biggest losers were Nike Inc, which fell 0.71% or 1.19 points to end the session at 165.44. The Travelers Companies Inc was up 0.53% or 0.83 points to end at 154.69 and 3M Company was down 0.16% or 0.28 points to 172. , 64.

The leaders of growth among the components of the S&P 500 index at the end of today's trading were shares of Tesla Inc, which rose in price by 7.49% to the level of 1.008.87, Paychex Inc, which gained 5.52%, to close at 133.41, as well as shares CF Industries Holdings Inc, which rose 4.58% to end at 71.73.

The biggest losers were CarMax Inc, which fell 6.66% to close at 127.87. Moderna Inc shed 6.26% to trade at 251.36. Cintas Corporation was down 1.81% to 428.89.

BiondVax Pharmaceuticals Ltd ADR, which gained 97.30% to 2.920, and Society Pass Inc gained 53.43% to close at 16.31, and also Acasti Pharma Inc rose 52.25% to end 1.6900.

The biggest losers were Allakos Inc, which fell 89.87% to close at 8.55. AgileThought Inc shed 30.40% to end the session at 6.410. CalAmp Corp was down 25.78% to 7.34.

On the New York Stock Exchange, the number of securities that rose in price (2,382) exceeded the number of securities that closed in the red (861), while the quotations of 138 shares remained practically unchanged. On the NASDAQ stock exchange, 2294 companies rose in price, 1524 declined, and 220 remained at the level of the previous close.

Paychex Inc rose to an all-time high, gaining 5.52%, 6.98 points to trade at 133.41. CF Industries Holdings Inc rose to an all-time high, gaining 4.58%, 3.14 points to trade at 71.73. Allakos Inc shares fell to historic lows, falling 89.87%, 75.84 points to trade at 8.55. AgileThought Inc fell to historic lows, down 30.40%, 2,800 points to end at 6.410. CalAmp Corp fell to a 52-week low, down 25.78%, 2.55 points to trade at 7.34.

The CBOE Volatility Index, which measures the value of S&P 500 options trading, was down 11.33% to trade at 18.63.

Gold Futures for February delivery was up 0.89% or 15.95 to $ 1.804.65 a troy ounce. Elsewhere in commodities, WTI crude for February delivery rose 2.64%, or 1.88, to $ 73.00 a barrel. Futures contracts for Brent oil for March delivery fell 0.03%, or 0.02, to trade at $ 75.58 a barrel.

Meanwhile, on the Forex market, the EUR / USD pair was flat 0.00% to hit 1.1324, while USD / JPY fell 0.01% to hit 114.10.

The US Dollar Index Futures was down 0.42% at 96.085.

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Forex Analysis & Reviews: US shares higher at close of trade; Dow Jones up 0.55%



At the close in New York, the Dow Jones gained 0.55%, the S&P 500 rose 0.62% and the NASDAQ Composite rose 0.85%.

In the leaders of growth among the components of the Dow Jones at the end of today's trading were shares of Caterpillar Inc, which increased in price by 4.05 points (2.00%), to close at around 206.20. Dow Inc added 1.68% or 0.91 points to end trade at 55.14. Honeywell International Inc rose 1.67% or 3.38 points to close at 205.22.

The biggest losers were Visa Inc Class A, which fell 0.61% or 1.34 points to end the session at 216.62. Merck & Company Inc is up 0.56% or 0.43 points to end at 75.73 and Walmart Inc is 0.22% or 0.31 points down to 139. , 49.

The leaders of growth among the components of the S&P 500 at the end of today's trading were Tesla Inc, which rose 5.76% to 1.067.00, ViacomCBS Inc, which gained 4.80% to close at 30.58, and shares Micron Technology Inc rose 4.52% to end the session at 94.42.

The biggest losers were Coterra Energy Inc, which fell 1.82% to close at 19.39. Hologic Inc shed 1.42% to end the session at 76.12. Pfizer Inc was down 1.41% to 58.71.

The growth leaders among the components of the NASDAQ Composite index at the end of today's trading were shares of 22nd Century Group Inc, which rose 38.64% to the level of 3.050, Oncology Institute Inc, which gained 38.46%, to close at 10.44, and Pasithea Therapeutics Corp rose 36.73% to trade at 2.01 at the close.

The biggest losers were InnovAge Holding Corp, which fell 35.64% to close at 5.31. Jupiter Wellness Inc shed 24.89% to trade at 0.954. American Virtual Cloud Technologies Inc was down 24.00% to 1,900.

On the New York Stock Exchange, the number of securities that went up (2,289) exceeded the number of securities that closed in the red (971), while the quotations of 126 shares remained virtually unchanged. On the NASDAQ stock exchange 2679 companies rose in price, 1163 declined, and 181 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.60% to 17.96, hitting a fresh monthly low.

Gold Futures for February delivery was up 0.42% or 7.65 to $ 1.809.85 a troy ounce. Elsewhere, WTI crude for February delivery rose 1.32%, or 0.96, to $ 73.72 a barrel. Futures contracts for Brent oil for March delivery rose 0.01%, or 0.01, to trade at $ 76.61 a barrel.

Meanwhile, on the Forex market, EUR / USD was up 0.03% to hit 1.1331, while USD / JPY was up 0.04% to hit 114.41.

The US Dollar Index Futures was down 0.02% at 96.035.

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Czech crown shows highs

The Czech koruna paired with the euro strengthened in holiday trading on Friday to its highest level since February 2020, adding weight after the central bank raised interest rates for the third time in a row this week.

Czech crown shows highs



Recall that the local exchange is not working on the eve of Christmas.

The koruna is trading 0.4% higher at 25.00 against the euro at 14:36 GMT. The currency briefly broke through the psychological support level of 25 euros for the first time since the coronavirus pandemic hit the markets in early 2020.

The koruna was the most profitable currency in Central Europe in 2021 with an increase of 4.9%, which once again confirms the thesis about the benefits of the early introduction of rate hikes by the Central Bank.

The exchange rate rose 0.9% after the Czech National Bank surprised the markets on Wednesday by raising the rate by 100 basis points more than expected and said it was ready to strengthen its influence even more to contain the growth of inflation.

The bank's main discount rate now stands at 3.75%, the highest level since February 2008. This is 300 basis points higher than the rate just three months ago.

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European stock markets in Europe ended trading with growth



Markets continue to be heavily influenced by the worldwide spread of the new COVID-19 strain omicron. Investors are closely monitoring the incidence rate in European countries and are worried that new surges could lead to a slowdown in economic activity.

The composite index of the largest enterprises in the region Stoxx Europe 600 climbed 0.6% to 485.49 points. Nevertheless, the value of the index is still below the high of 489.95 points reached on November 17.

France's CAC 40 Index added 0.8%, Germany's DAX Index added 0.5%, while Spain's IBEX and Italy's FTSE MIB gained 0.7% and 0.8%, respectively.

The leaders of growth among the components of Stoxx 600 on Monday came the shares of the Norwegian NEL ASA, working with renewable energy sources (+ 5.6%), the Swiss biopharmaceutical Idorsia Ltd. (+ 4.4%), as well as the Swedish online casino operator Evolution Gaming Group AB (+ 5%).

The stock quotes of the Swiss Roche Holding AG (+ 1.1%) also rose on the news that the US authorities approved the emergency use of the company's home tests for COVID-19, showing the result within 20 minutes.

CNH Industrial N.V., an international industrial group that announced the separation of its truck division Iveco Group, gained 2.7%. Iveco shares will begin trading on the Milan Stock Exchange on January 3.

In addition, shares of the main European technology companies completed trading in positive territory: ASML Holding (+ 1%), SAP (+ 0.7%), Nordic Semiconductor ASA (+ 3.5%) and Infineon Technologies (+ 2.4%) ...

The leaders of the fall in the Stoxx 600 were shares of the Swiss online pharmacy chain Zur Rose Group AG (-2.9%), the Danish energy Oersted A / S (-2.4%) and the operator of the food delivery service HelloFresh SE (-2.1 %).

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US stocks mixed at close of trade; Dow Jones up 0.26%



At the close in New York, the Dow Jones rose 0.26% to a 1-month high, the S&P 500 lost 0.10% and the NASDAQ Composite fell 0.56%.
The leaders of growth among the components of the Dow Jones at the end of today's trading were the shares of Walt Disney Company, which rose 2.40 points (1.57%), to close at 155.20. Boeing Co added 1.46 points or 1.46% to end trades at 206.13. Walmart Inc rose 1.44% or 2.02 points to end at 142.78.
The biggest losers were Salesforce.com Inc, which fell 1.10% or 2.85 points to end the session at 255.45. Nike Inc is up 0.69% or 1.16 points to end at 166.42, while Apple Inc is down 0.58% or 1.04 points to 179.29. ... The top gainers among the components of the S&P 500 at the end of today's trading were Campbell Soup Company, which rose 2.80% to 43.36, Ball Corporation, which gained 2.59% to close at 94.30, and American Airlines Group shares rose 2.04% to end the session at 18.54.
The biggest losers were DexCom Inc, which fell 7.09% to close at 529.50. Etsy Inc shed 3.46% to end the session at 221.73. Penn National Gaming Inc was down 2.89% to 49.34. The leaders of growth among the components of the NASDAQ Composite index at the end of today's trading were shares of Insignia Systems Inc, which rose 64.82% to 19.020, ShiftPixy Inc, which gained 43.09% to close at 1.120, and Pop Culture Group Co Ltd, which were up 35.88% to end the session at 2.31.
The biggest losers were Biofrontera Inc, which fell 29.50% to close at 8.10. Powerbridge Technologies Co Ltd shed 25.45% to end the session at 0.6933. Sensus Healthcare Inc was down 22.67% to 6.310.
On the New York Stock Exchange, the number of securities that fell (1,725) exceeded the number of those that closed in positive territory (1,531), while the quotations of 136 shares remained practically unchanged. On the NASDAQ stock exchange 2,494 companies fell in price, 1,330 increased, and 182 remained at the level of the previous close.
The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.79% to 17.54, hitting a fresh monthly low.
Gold Futures for February delivery was down 0.12% or 2.20 to $ 1.806.60 a troy ounce. Elsewhere in commodities, WTI crude for February delivery rose 0.60%, or 0.45, to $ 76.02 a barrel. Futures contracts for Brent oil for March delivery rose 0.08%, or 0.06, to trade at $ 78.84 a barrel.
Meanwhile, on the Forex market, EUR / USD was up 0.04% to hit 1.1313, while USD / JPY was up 0.00% to hit 114.82.
The US Dollar Index Futures was up 0.08% at 96.165.

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2021 was the best year for the US dollar



Experts agree that this year has been the best for the US dollar, which has not experienced such victory over the past seven years. This currency enters the upcoming 2022 with a reserve of optimism, which it will retain for a long time.

The US currency completed the current year with growth against most of the key currencies. The dollar index, which reflects the USD exchange rate against a basket of six leading currencies, increased 6.8% over the year. Such a sharp growth was shown only by the Canadian dollar due to the increase in oil prices by 50% over the year. According to Saxo Bank analysts, the sustained recovery of the US and Canadian economies will lead to an early rate hike from both central banks. Saxo Bank also believes that the consequence of the Fed's aggressive policy will be the tightening of conditions in the financial markets. If this scenario occurs, the US dollar will outperform other currencies as a safe haven asset.

Experts said that this year was the best for the US currency for the last seven years. The US dollar has shown high efficiency, often holding the leading positions. The surge in inflation, which has not been observed in the United States over the past 40 years, has become the driver of this growth.

At the same time, the US dollar was supported by record investments in it by large hedge funds. This contributed to the rapid growth of the US currency. Moreover, experts consider the doubling of the pace of curtailing the Federal Reserve's asset repurchase program to be the catalyst for the recovery of this currency. The high interest rates and the course for further tightening of the monetary policy provide invaluable support to the US currency.

Amid growing concerns about inflation, the regulator may raise the key rate four times instead of the planned three in 2022. According to experts, a 1% rate hike will start to significantly affect economic activity. Experts expect the first Fed rate increase in March, with a 54% probability. By the end of 2022, the probability of two rate hikes is 90%, and a threefold increase is 66%.

Analysts are sure that the inertia towards the strengthening of the US dollar will remain at the beginning of the new year. At the same time, the European currency will remain in the range of 1.1000-1.1500. The reasons for this are the Fed's curtailment of stimulus and the ECB's "dovish" strategy in relation to monetary policy. On Friday morning, the EUR/USD pair was trading at the level of 1.1324, slightly losing its position. However, experts expect the euro's long-term downward trend to reverse by mid-2022.



ING's currency strategists are more confident in the growth of the US dollar more than the euro. The bank believes that the tightening of monetary policy by the Fed will cause the US dollar to rise. However, this sharp appreciation is constrained by the fact that the markets have put two to three rate hikes in their value. At the same time, analysts remind us that a fourfold rise is not excluded. Morgan Stanley currency strategists believe that in the second half of 2022, the US currency will partially plunge. However, most experts adhere to positive forecasts regarding the US currency.

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Who will take the lead between the US dollar and Chinese yuan?



The eternal rivals, the American and Chinese currencies, reasserted themselves at the beginning of the new year. Analysts said that they have rejoined the race to take control of the global financial market.

Experts believe that the yuan has quite high chances in relation to the US dollar. Many analysts view the Chinese currency as a successor of the American one, which can take the place of the global reserve means of payment. This gives confidence to the yuan and adds nervousness to the US dollar, although no one doubts the strength of the latter. It can be recalled that the US currency showed the best result in six years at the end of 2021, although it slightly lost its position at the close of the final trading day of the past year.

In the long term, experts admit that the US dollar's decline will be moderate, but not very loud. The value of the US dollar is declining against the background of the gradual recovery of the global economy after the curtailment of lockdowns caused by COVID-19. Other reasons for the potential decline will be increased political tensions between the United States and Europe, as well as the aggressive policy of the US towards China and Mexico. Experts also highlighted that the increased pressure from Washington on the above-mentioned trading partners with the use of anti-dumping measures and sanctions contributes to the devaluation of the USD.

Currently, the Chinese currency, which operates "quietly," will wait for its finest hour. By choosing the moment when the US dollar will weaken the most, the yuan will take advantage of the situation and press it out on the global financial market. Similar attempts were made last year, but they were unsuccessful. But at the end of 2021, the yuan was among the leaders among the currencies of emerging markets.

According to analysts, the US dollar's "protective function" in the world financial market over the past decade is gradually weakening. Its loss of the "safe haven" asset status will continue due to the transition of a number of countries to settlements in national currencies in international trade. The Fed's upcoming action to tighten monetary policy also adds pressure. Experts believe that this increases the risks of the devaluation of the US currency.

As for the Euro currency, this year can also bring disappointment amid the Fed's rate hike. The past year seemed extremely unfortunate for the euro, so the markets are worried that this might happen again as the ECB continues to adhere to soft monetary policy. According to the President of the regulator Christine Lagarde, tightening monetary policy is now unreasonable, since it interferes with economic recovery. The European regulator does not plan to raise interest rates this 2022.

The euro is currently inferior to the US dollar again, and the EUR/USD pair is capable of returning to the range of 1.0850-1.0900 and staying there for a long time. However, experts expect the pair to recover in the coming month, although they are not hoping for steady growth. On Monday morning, the EUR USD pair was trading at the level of 1.1338, attempting to keep its recovered positions.



There may be no winners or losers in the global financial market this year. The US currency has impressive potential to maintain its strength, but the Chinese one is strong due to its wait-and-see strategy. At the same time, experts summarize that both currencies claiming leadership are capable of peacefully coexisting in the global financial space.

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