America’s Roundup: Dollar drops to near four-month low,Wall Street ends mixed, Gold rises, Oil settles little changed after China eases COVID curbs-December 2nd,2022

Posted at 02 December 2022 / Categories Market Roundups

Market Roundup

•US Nov Challenger Job Cuts 76.835K,  33.843K previous

•US Challenger Job Cuts (YoY) 416.5%,33.8% previous

•US Personal Oct Income (MoM)  0.7%,0.4% forecast, 0.4%previous

•US Oct Real Oct Personal Consumption (MoM) 0.5% ,0.3% previous

•US Oct Personal Spending (MoM) 0.8%,0.8% forecast, 0.6% previous

•US Oct PCE Price index (YoY) 6.0%,6.2% forecast, 6.2% previous

•US Oct Core PCE Price Index (MoM) 0.2%,0.3% forecast, 0.5% previous

•Canada Labor Productivity (QoQ) (Q3) 0.6%, 0.3% forecast, 0.2% previous

•US Oct Core PCE Price Index (YoY) 5.0%,5.0% forecast, 5.1% previous

•US Jobless Claims 4-Week Avg.  228.75K, 226.75K previous

•US Continuing Jobless Claims 1,608K,1,573K forecast, 1,551K previous

•US Initial Jobless Claims 225K,235K forecast, 240K previous

•US Nov Manufacturing PMI 47.7,47.6 forecast, 47.6 previous

•US Nov ISM Manufacturing New Orders Index 47.2,     49.2previous

•US ISM Nov Manufacturing PMI 49.0,49.8 forecast,50.2 previous

•US ISM NovManufacturing Employment 48.4, 50.0 previous

•US ISM Nov Manufacturing Prices 43.0, 47.5forecast, 46.6 previous

•US Oct Construction Spending (MoM)  -0.3%,-0.3% forecast, 0.2%previous

Looking Ahead - Economic Data (GMT

•00:30 Australia Invest Housing Finance (MoM) -6.0% previous

•00:30 Australia Retail Sales (MoM) -0.2% forecast,-0.2% previous

•00:30 Australia Home Loans (MoM) -4.5%forecast, -9.3%previous

Looking Ahead - Events, Other Releases (GMT)

•02:40 RBA Governor Lowe Speaks     

•02:40 EU ECB President Lagarde Speaks     

•04:30   New Zealand  RBNZ Gov Orr Speaks 

Currency Summaries

EUR/USD: The euro strengthened  on Thursday as the dollar sank after Federal Reserve Chair Jerome Powell struck a more dovish tone than the market expected, implying slower rate hikes as soon as December.. While roughly in line with previous comments, Powell's words were a relief for investors who had feared more hawkishness. Still, Powell warned that the fight against inflation was far from over and that key questions remained unanswered, including how high rates will ultimately need to rise, and for how long. Immediate resistance can be seen at 1.0465(23.6%fib), an upside break can trigger rise towards 1.0557(Higher BB).On the downside, immediate support is seen at 1.0356(9DMA), a break below could take the pair towards  1.0301(38.2%fib).

GBP/USD: Sterling rose to a near 16-week high against a broadly-soft dollar on Thursday, with currency traders looking past gloomy British manufacturing data for now. The pound has recovered ground from lows hit in September in the aftermath of then-Prime Minister Liz Truss’ mini-budget.Despite the uptick in recent months, the pound remains 10.3% lower on the year and traders are still focused on Britain’s gloomy economic outlook. Data on Thursday meanwhile showed British manufacturing activity falling for a fourth month in a row in November as businesses faced the weakest overseas demand in 2-1/2 years, leading to job cuts and reduced confidence about the year ahead. Immediate resistance can be seen at 1.2286( 23.6%fib), an upside break can trigger rise towards 1.2311 (Higher BB).On the downside, immediate support is seen at 1.2023(9DMA), a break below could take the pair towards 1.1974(38.2%fib).

 USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Thursday as investors reduced bets on another oversized interest rate hike by the Bank of Canada next week and despite the greenback losing ground against some major peers. Chances that the BoC would hike by 50 basis points rather than 25 basis points at a policy decision next Wednesday have fallen to roughly 10% from 30% since Powell’s comments, money market data showed. The loonie was trading 0.2% lower at 1.3430 to the greenback , giving back some of its gains from the previous day when Federal Reserve Chair Jerome Powell said that U.S. rate hikes could slow in December. Immediate resistance can be seen at 1.3463 (50% fib), an upside break can trigger rise towards 1.3483 (21DMA).On the downside, immediate support is seen at 1.3404 (38.2% fib), a break below could take the pair towards 1.2333(23.6% fib).

USD/JPY: The dollar declined sharply against Japanese yen on Thursday after U.S. Federal Reserve Chair Jerome Powell’s speech reinforced expectations of smaller interest rate hikes ahead. Powell said on Wednesday it was time to slow the pace of coming interest rate hikes while also signalling a protracted economic adjustment to a world where borrowing costs will remain high, inflation comes down slowly, and the U.S. remains chronically short of workers. Market participants now expect a 91% chance of a 50 basis points rate hike in the U.S. central bank’s upcoming December meeting.. Strong resistance can be seen at 135.56(5DMA), an upside break can trigger rise towards 135.81(38.2%fib).On the downside, immediate support is seen at 135.05 (23.6% fib), a break below could take the pair towards 134.73(Lower BB).

Equities Recap

European stocks closed higher on Thursday with several key indices hitting multi-month highs, as investors cheered Fed Chair Jerome Powell's comments that interest rate hikes will be smaller from as early as December.

UK's benchmark FTSE 100 closed down by 0.19 percent, Germany's Dax ended up by 0.67 percent, France’s CAC finished the day up by 0.23 percent.

Wall Street ended mixed on Thursday as a selloff in Salesforce weighed on the Dow, while traders digested U.S. data that suggested the Federal Reserve's interest rate hikes are working.

Dow Jones closed down by 0.56 percent, S&P 500 ended down by 0.09 percent, Nasdaq finished the day up by 0.13 percent.

Treasuries Recap

Moderating inflation in October pushed U.S. Treasury yields down further on Thursday after a strong rally the day before when Federal Reserve Chairman Jerome Powell said the U.S. central bank could slow its pace of interest rate hikes in two weeks.

Yields backed off early declines after poor manufacturing data but later slid lower. The benchmark 10-year Treasury   slid to 10-week lows and the two-year note  , which often indicates interest rate expectations, fell to early October lows.

Commodities Recap

Gold prices rose 2% on Thursday to climb above the key $1,800 per ounce pivot, as the dollar weakened on the prospect of slower rate hikes from the Federal Reserve and signs of cooling U.S. inflation.

Spot gold climbed 1.8% to $1,800.69 per ounce by 1:55 p.m. ET (1855 GMT), reaching $1,803.94 earlier in the session to its highest since August 10.U.S. gold futures settled up 3.1% at $1,815.2.

Oil prices settled largely narrowly mixed on Thursday, retreating from an early rally built on dollar weakness and hopes for improved fuel demand in China after COVID-19 curbs were eased in two major Chinese cities.

Brent Crude futures settled 9 cents lower at $86.88 a barrel. U.S. West Texas Intermediate crude futures settled at $81.22 a barrel, up 67 cents or 0.8%.

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