Posted at 13 July 2023 / Categories Market Roundups
Market Roundup
•U.S. annual inflation rises at lower-than-expected pace
•Rate futures price in one rate cut this year
•US Jun CPI, n.s.a (MoM) 0.32%, 0.25% previous
•US Jun Core CPI Index 308.31, 309.03 forecast,307.82 previous
•US Jun Core CPI (MoM) 0.2%,0.3% forecast,0.4% previous
•US Jun CPI (MoM ) 0.2%,0.3% forecast, 0.1% previous
•US Jun CPI Index, n.s.a. 305.11,305.22 forecast,304.13 previous
• US Jun Core CPI (YoY) 4.8%,5.0% forecast,5.3% previous
•US Jun CPI (YoY) 3.0%,3.1% forecast,4.0% previous
•Canada BoC Interest Rate Decision 5.00%, 5.00% forecast,4.75% previous
• US Jun Cleveland CPI (MoM) 0.4% ,0.4% forecast,0.4% previous
• US Crude Oil Inventories 5.946M, 0.483M forecast,-1.508M previous
Looking Ahead Economic Data(GMT)
•01:00 Australia MI Inflation Expectations 5.1% forecast,5.2% previous
•03:00 China Jun Trade Balance (USD) 93.90B forecast, 65.81B previous
•03:00 China Jun Imports (YoY) -6.1% forecast, -4.5% previous
•03:00 China Jun Exports (YoY) 0.5% forecast, -7.5% previous
Looking Ahead Events And Other Releases(GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro rose on Wednesday as the dollar dwindled after a U.S. inflation reading indicated just one more interest rate hike by the Federal Reserve this year. U.S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside. In the 12 months through June, the CPI advanced 3.0%, compared with Reuters estimates of 3.1%. Markets are pricing in a 92% chance of a 25-basis-point Fed hike this month, the CME FedWatch tool showed, but remain doubtful about further hikes after that. Immediate resistance can be seen at 1.1148 (23.6%fib), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1081(38.2%fib), a break below could take the pair towards 1.1031 ( 50%fib).
GBP/USD: Sterling touched a fresh 15-month high on Wednesday as dollar fell after new U.S. inflation data showed a slowdown in the seemingly relentless rise of consumer prices.The Consumer Price Index (CPI) gained just 0.2% last month, the Labor Department said on Wednesday, lifted by rises in gasoline prices as well as rents, which offset a decrease in prices of used motor vehicles. CPI advanced 3.0% in the 12 months through June, down from 4.0% in May and the smallest year-on-year increase since March 2021. Immediate resistance can be seen at 1.3000 (23.6%fib), an upside break can trigger rise towards 1.3030 (Higher BB).On the downside, immediate support is seen at 1.2912(June 12th low), a break below could take the pair towards 1.2834(38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday after Bank of Canada hikes rates by a quarter of a percentage point. The Bank of Canada on Wednesday hiked its key overnight rate by a quarter of a percentage point to a 22-year high of 5.0%, and said it could raise rates further because of the risk of inflation stalling above its 2% target.The move to increase borrowing costs by 25 basis points for the second time in as many months was expected by analysts and markets. The Canadian dollar strengthened to a two-week high at 1.3144 per U.S. dollar, or 76.08 U.S. cents, before pulling back to 1.3180, up 0.4% on the day .Immediate resistance can be seen at 1.3244 (20DMA), an upside break can trigger rise towards 1.3253 (38.2% fib).On the downside, immediate support is seen at 1.31474(23.6% fib), a break below could take the pair towards 1.3099 (Lower BB).
USD/JPY: The dollar declined sharply against the yen on Wednesday after data showed the rise in U.S. consumer prices moderated in June, suggesting the Federal Reserve may have to raise interest rates only one more time this year. Data showed core U.S. consumer prices rose just 0.2% in June, compared with forecasts for a gain of 0.3%. The monthly rise in core prices was the smallest since August 2021. On an annual basis, U.S. core CPI advanced 4.8%, lower than market expectations for a 5% increase. That was also the smallest annual increase in more than two years. The dollar fell by as much as 0.76% against yen to a one-month low of 139.32. It was last down 0.6% at 139.55.Strong resistance can be seen at 139.62(38.2%fib) an upside break can trigger rise towards 140.00(Psychological level).On the downside, immediate support is seen 137.98(50%fib), a break below could take the pair towards 136.34(61.8%fib)
Equities Recap
European shares jumped on Wednesday as further evidence of easing consumer inflation in the United States boosted hopes that the Federal Reserve could end its market-punishing interest rate hikes soon, with technology and miners leading gains.
UK's benchmark FTSE 100 closed up by 1.83 percent, Germany's Dax ended up by 1.47 percent, France’s CAC finished the day up by 1.57 percent.
U.S. stocks ended solidly higher on Wednesday, led by a gain of more than 1% in the Nasdaq after a report showed inflation subsided further with consumer prices registering their smallest annual increase in more than two years.
Dow Jones was trading up by 0.25 percent, S&P 500 was trading up by 0.74 percent, Nasdaq was trading up by 1.15 percent.
Treasuries Recap
U.S. Treasury yields dropped on Wednesday after data showed consumer price increases came in below economists' forecasts in June, raising expectations that the Federal Reserve is nearing the end of its interest rate-hiking cycle.
Benchmark 10-year note yields dropped to 3.861% from around 3.945% before the data. They are down from an eight-month high of 4.094% hit on Friday.
Commodities Recap
Gold prices jumped more than 1% on Wednesday after signs of cooling inflation in the United States boosted hopes that the Federal Reserve could hit the brakes on its interest rate hike cycle sooner than previously thought.
Spot gold was up 1.3% at $1,957.32 per ounce by 02:21 p.m. ET (1821 GMT), while U.S. gold futures settled 1.3% higher at $1,961.70.
Oil prices settled higher on Wednesday, with benchmark Brent futures breaching $80 a barrel for the first time since May, after U.S. inflation data spurred hopes the Federal Reserve may have fewer interest rate hikes in store for the world's biggest economy.
Brent futures settled up 71 cents, or 0.9%, to $80.11 a barrel. U.S. West Texas Intermediate (WTI) crude settled up 92 cents, or 1.2%, to $75.75 a barrel.