Take care! This Factor Will Become 'Pus' In The Market This Week


 The opening of the market in the fourth week of November was still slow in the Asian session, continuing the flat pace of trading at the end of last week.

The pattern of slow movement of the market is likely to continue until the end of the week ahead of the celebration of 'Thanksgiving Day' and the banks in America will be closed.

However, the situation can change and the market will be buoyant with the focus on developments in China which could drive market sentiment to risk.

A metropolis in Guangzhou has reportedly received a 5-day movement restriction order starting today. The city with a population of 19 million is now the latest location of the epicenter of the worst Covid-19 outbreak since the pandemic hit.

The city is also an economic center for China in addition to being the location of a global manufacturing hub.

The Chinese authorities must now be in a dilemma to relax restrictions after the Chinese health authorities have also warned against doing so because the economy is not ready.

Thus, this factor is likely to rekindle concerns in the market and become a driver for the strengthening of the safe-haven currency US dollar in addition to high-return currencies such as the Australian dollar and the New Zealand dollar will be depressed.

The minutes of the FOMC meeting will also be in focus this week after investors have witnessed a significant depreciation of the US dollar in the past week even though the Federal Reserve (Fed) has continued to raise interest rates by 75 basis points for the fourth time in a row.

In addition, the minutes of the European central bank (ECB) meeting will also be in the spotlight at the end of the week when investors are still digesting President Christine Lagarde's statement last Friday.

Lagarde still issued a hawkish statement by signaling that interest rate hikes must continue to ensure that the inflation rate is successfully brought down to the 2% target level.

However, other ECB policymakers have expressed concern over the move and are likely to suggest that policy tightening be slowed.

But before that, the policy meeting of the central bank of New Zealand (RBNZ) will be the focus first on Wednesday with an expected increase in interest rates by 75 basis points to 4.25% at the latest meeting.