Posted at 11 January 2024 / Categories Market Roundups
Market Roundup
•Brent futures settle 1% lower, WTI futures fall 1.2%
•U.S. crude, fuel stocks rose last week -EIA
•Euro zone facing possible recession, ECB VP says
•U.S. will consult partners if Houthi attacks continue in Red Sea
•US Nov Wholesale Trade Sales (MoM) 0.0%, -1.3% previous
•US Nov Wholesale Inventories (MoM) -0.2%,-0.2% forecast,-0.4% previous
•US Crude Oil Inventories 1.338M,-0.675M forecast, -5.503M previous
•US Atlanta Fed GDPNow (Q4) 2.2%,2.2% forecast,2.2% previous
Looking Ahead Economic Data(GMT)
•00:30 Australia Nov Imports (MoM) -2.0% previous
•00:30 Australia Nov Exports (MoM) 0.4% previous
•00:30 Australia Nov Trade Balance 7.500B forecast,7.129B previous
•05:00 Japan Nov Coincident Indicator (MoM) 0.2% previous
•05:00 Japan Nov Leading Index (MoM) -0.4% previous
•05:00 Japan Leading Index 107.9 forecast,108.9 previous
Looking Ahead Events And Other Releases(GMT)
•No data ahead
EUR/USD: The euro edged higher against dollar on Wednesday as investors awaited U.S. inflation data later this week. Investors' focus remains squarely on the December consumer and producer inflation reports due on Thursday and Friday, respectively, as they could help determine the Fed's policy path.Market participants have scaled back expectations for at least a 25 basis point cut in March, and currently see a 63% chance, down from around 86% in the last week of 2023, as per the CME FedWatch Tool. The euro gained 0.36% to $1.0970 against dollar. Immediate resistance can be seen at 1.0981(Jan 7th high), an upside break can trigger rise towards 1.1000(Psychological level).On the downside, immediate support is seen at 1.0928(38.2%fib), a break below could take the pair towards 1.0853(50%fib).
GBP/USD: Sterling held steady on Wednesday ahead of a speech by Bank of England (BoE) Governor Andrew Bailey to British MPs, with markets looking for signals on the direction of monetary policy. BoE Governor Bailey and other prominent central bank officials are scheduled to answer questions from the Treasury Committee at 1415 GMT regarding the Financial Stability Report released on December 6th. Bailey's testimony precedes an important update on UK gross domestic product (GDP) set for Friday. Projections anticipate a 0.1% contraction in the economy for the three months leading up to November. Sterling edged 0.14% higher against the dollar at $1.2728. Immediate resistance can be seen at 1.2754(23.6%fib), an upside break can trigger rise towards 1.2778(Higher BB).On the downside, immediate support is seen at 1.2580 (38.2%fib), a break below could take the pair towards 1.2493(50%fib).
USD/CAD: The Canadian dollar slightly gained against the U.S. dollar on Wednesday but remained close to its mid-December low as falling oil prices, and investors were awaiting U.S. inflation data for insights into the Federal Reserve's policy outlook. The price of oil , one of Canada's major exports, settled 1.2% lower at $71.37 a barrel after a surprise jump in U.S. crude stockpiles raised worries about demand in the largest oil market. The loonie was trading 0.1% higher at 1.3375 to the greenback, or 74.77 U.S. cents, after moving in a range of 1.3366 to 1.3395.On Tuesday, the currency touched its weakest intraday level since Dec. 15 at 1.3414 as investors took stock of recent weakening in the domestic economy. Immediate resistance can be seen at 1.3387 (38.2% fib), an upside break can trigger rise towards 1.3422 (23.6% fib).On the downside, immediate support is seen at 1.3387(50% fib), a break below could take the pair towards 1.3334 (61.8% fib).
USD/JPY: The dollar strengthened against the yen on Wednesday as traders geared for a key U.S. inflation print later this week. The focal point for markets this week is the release of the U.S. Consumer Price Index (CPI) inflation data. According to economists surveyed , the year-on-year inflation is expected to reach 3.2% in December, slightly up from 3.1% in the previous period. However, they anticipate that core inflation likely dropped to 3.8%, its lowest level since mid-2021, down from 4%. The greenback rose 0.84% to 145.68 yen. Strong resistance can be seen at 146.24(23.6%fib),an upside break can trigger rise towards 146.56 ( Higher BB).On the downside, immediate support is seen 145.05(50%fib)a break below could take the pair towards 144.07(61.8%fib).
Equities Recap
European markets fell on Wednesday, with miners and tourism sectors leading the way, as optimism about early interest rate reduction faded, while investors focused on a critical US inflation report.
UK's benchmark FTSE 100 closed down by 0.42 percent, Germany's Dax ended up by 0.01 percent, France’s CAC finished the day down by 0.01 percent.
U.S. stocks finished higher on Wednesday as megacaps surged, but gains were restrained ahead of inflation data and key bank results later this week.
Dow Jones closed up by 0.45 %percent, S&P 500 closed up by 0.57% percent, Nasdaq settled up by 0.7 % percent.
Treasuries Recap
U.S. Treasury yields drifted lower on Wednesday as investors positioned for a consumer price index (CPI) report for December that would show a slowing trend, which should move the Federal Reserve closer to the end of its tightening cycle.
The benchmark 10-year yield was slightly down at 4.011% . U.S. 30-year bond yields were flat 4.186% .
On the shorter-end of the curve, the two-year yield slipped 1.9 basis points to 4.353% .
Commodities Recap
Oil prices plummeted about a dollar per barrel on Wednesday after a surprising increase in US crude stocks stoked concerns about demand in the largest oil market.
U.S. West Texas Intermediate crude futures fell 87 cents, or 1.2%, to $71.37 a barrel. Global benchmark Brent crude oil futures settled 79 cents, or 1%, to $76.80 a barrel.
Gold prices eased on Wednesday ahead of U.S. inflation data that could shape the Federal Reserve's outlook on interest rate cuts this year, although a softer dollar kept a floor under prices.
Spot gold was down 0.4% at $2,021.39 per ounce by 2:25 p.m. ET (1925 GMT). U.S. gold futures settled 0.3% lower at $2027.8.