Posted at 20 January 2022 / Categories Market Roundups
Market Roundup
•US Dec Building Permits 1.873M,1.701M forecast ,1.717M previous
•US Dec Building Permits (MoM) 9.1%,3.9% previous
•US Dec Housing Starts (MoM) 1.4% , 11.8% previous
•US Dec Housing Starts 1.702M,1.679M forecast, 1.679M previous
•Canada Dec Core CPI (MoM) 0.0%,0.6% previous
•Canada Dec Core CPI (YoY) 4.0%,3.5%, 3.6%previous
•Canada Dec CPI (MoM) -0.1%,-0.1% forecast,0.2% previous
•Canada Nov Wholesale Sales (MoM) 3.5%, 2.7% forecast, 1.4% previous
Looking Ahead Economic Data
• 03:00 New Zealand Dec Business NZ PMI 50.6 previous
• 03:00 New Zealand Nov Permanent/Long-Term Migration 814 previous
•05:00 Japan Dec National Core CPI (YoY) 0.6% forecast, 0.5% previous
Looking Ahead - Events, Other Releases (GMT)
•05:20 Japan Monetary Policy Meeting Minutes
Currency Summaries
EUR/USD: The euro edged higher against dollar on Wednesday as euro was supported by a pullback in Treasury yields from fresh two-year highs and 10-year Bund yields rising above zero for the first time since May 2019. German 10-year yields have shot above 0% for the first time in nearly three years, potentially marking a return to more normal borrowing conditions in Europe. Negative bond yields in Germany, the euro zone's benchmark issuer, are a result of aggressive bond-buying by the European Central Bank, deployed to lift inflation which had undershot its target for years. So Wednesday's rise in Bund yields to as high as 0.025% is significant. The euro was up 0.2% at $1.1348. Immediate resistance can be seen at 1.1347 (38.2%fib), an upside break can trigger rise towards 1.1385 (23.6%fib).On the downside, immediate support is seen at 1.1318 (50%fib), a break below could take the pair towards 1.1286 (61.8% fib).
GBP/USD: Sterling strengthened against dollar on Wednesday after higher-than-expected British inflation data added to pressure on the Bank of England to raise interest rates next month. Inflation in Britain rose faster than expected to a near 30-year high in December, intensifying a squeeze on living standards and putting pressure on the Bank of England to raise interest rates again. The annual rate of consumer price inflation increased to 5.4% from November's 5.1%, the highest since March 1992. Financial markets now price in a more than 90% chance that the BoE will raise its main interest rate to 0.5% on Feb. 3. Immediate resistance can be seen at 1.3634(38.2%fib), an upside break can trigger rise towards 1.3709(23.6%fib).On the downside, immediate support is seen at 1.3573 (50%fib), a break below could take the pair towards 1.3539 (21DMA).
USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Wednesday as oil prices rose and domestic data showing a 30-year high for inflation supported the case for a Bank of Canada interest rate hike at a policy decision next week. Canada's annual inflation rate climbed to 4.8% in December,led by higher prices for food, vehicles and shelter, while the average of the Bank of Canada's three core measures increased to 2.9% from 2.7% .The Canadian dollar was trading 0.2% higher at 1.2488 to the greenback, or 80.08 U.S. cents, after touching its strongest intraday level since last Thursday at 1.2451 .Immediate resistance can be seen at 1.2535 (38.2%fib), an upside break can trigger rise towards 1.2599(23.6%fib).On the downside, immediate support is seen at 1.2483 (50%fib), a break below could take the pair towards 1.2437 (61.8%fib).
USD/JPY: The dollar declined against the Japanese yen on Wednesday as U.S. Treasury yields retreated after hitting roughly two-year peaks . U.S. 10-year Treasury yields touched a new two-year high of 1.902% on Wednesday, but was last down 4 basis points at 1.8271%. On the data front U.S. homebuilding unexpectedly increased in December amid unseasonably mild weather.While, housing starts rose 1.4% to a seasonally adjusted annual rate of 1.702 million units last month. The dollar was last trading at 0.09 percent lower versus the yen at 114.48. Strong resistance can be seen at 114.70 (38.2% fib), an upside break can trigger rise towards 115.03 (14DMA).On the downside, immediate support is seen at 114.19 (50%fib), a break below could take the pair towards 113.80 (61.8%fib).
Equities Recap
European stocks recovered on Wednesday, as luxury stocks surged after upbeat trading updates from Richmond and Burberry.
UK's benchmark FTSE 100 closed up by 0.35 percent, Germany's Dax ended up by 0.24 percent, France’s CAC finished the day up by 0.55percent.
Wall Street's main indexes ended sharply lower on Wednesday, with the tech-heavy Nasdaq confirming it was in a correction, after a diverse set of corporate earnings and as investors continued to worry about higher U.S. Treasury yields and the Federal Reserve tightening monetary policy.
Dow Jones closed down by 0.96% percent, S&P 500 closed down by 0.97 % percent, Nasdaq settled down by 1.15% percent.
Commodities Recap
Gold rose more than 1% on Wednesday as a retreat in the dollar and geopolitical tensions surrounding Ukraine burnished safe-haven bullion's appeal, sparking a rally in precious metals.
Spot gold climbed 1.5% to $1,840.91 per ounce by 13:43 ET (1843 GMT), while U.S. gold futures settled up 1.7% at $1,843.20.
Oil prices settled higher on Wednesday after a fire on a pipeline from Iraq to Turkey briefly stopped flows, increasing concerns about an already tight short-term supply outlook.
Brent crude futures settled up 93 cents, or 1.1%, at $88.44 a barrel. The global benchmark earlier touched $89.13, its highest level since Oct. 13, 2014.
U.S. West Texas Intermediate (WTI) crude futures settled up $1.53 at $86.96 a barrel, its highest level since Oct. 9, 2014.