The final trading week on the markets will wrap up this rather disappointing year. In 2022, the main drivers of market volatility were central banks and their response to inflation, and there are many indications that the situation will not change next year. Economic calendar for next week is rather empty but end-year changes in positioning may play a crucial role. US500, USDJPY and NATGAS are the instruments to follow in the coming week.
US500
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Create account Try a demo Download mobile app Download mobile appEnd of the year period, just like end of the quarter periods, are marked with big positioning changes among investment funds. Managers often engage in the so-called "window dressing" - an action of buying well-known shares with the intent of highlighting them among funds' top10 holding list. Underperforming stocks also tend to be sold at the year's end as investors seek to optimize their taxes. This is a key thing stock investors should take into consideration while trading in the final week of the year.
USDJPY
USDJPY has been one of the most interesting currency pairs to trade in 2022. Japanese yen dropped almost over 30.0% against US dollar with USDJPY exchange rate jumping to the highest level since 1998 in October. However market sentiment shifted swiftly in November, following BoJ intervention and recent unexpected yield curve control adjustment. Christmas is not as celebrated in Asia as it is in Europe or the United States and Japanese markets will be open on each day of the next week, what may help keep JPY on the move.
NATGAS
Fresh weather forecasts for the end of December point out that a massive arctic storm could potentially disrupt exports of LNG from the US Gulf Coast, thus exacerbating the global energy crisis. As such an above-average natural gas consumption, due to increased heating needs could exert upward pressure on NATGAS. US natural gas prices fell sharply last week to the lowest level since March 2022, however potential supply problems coupled with higher heating needs could provide some respite for the market bulls.
