Posted at 26 October 2023 / Categories Market Roundups
Market Roundup
•US New home sales beat consensus, mortgage rates hit 23-year high
•US indexes down: Dow 0.32%, S&P 1.43%, Nasdaq 2.43%
•US Building Permits (MoM)-4.5%, -4.4% forecast, 6.8% previous
•US Building Permits1.471M,1.473M forecast, 1.541M previous
•US Sep New Home Sales (MoM) 12.3% ,-8.7% previous
•US Sep New Home Sales 759K, 680K forecast ,675K previous
•Canada BoC Interest Rate Decision 5.00%, 5.00% forecast ,5.00% previous
•US Cushing Crude Oil Inventories 0.213M ,-0.758M previous
•US Crude Oil Inventories 1.371M, 0.239M forecast ,-4.491M previous
Looking Ahead Economic Data(GMT)
•00:30 Australia Export Price Index (QoQ) (Q3) -8.5% previous
•00:30 Australia Import Price Index (QoQ) (Q3) 0.2%forecast, -0.8% previous
Looking Ahead Events And Other Release(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro dipped against dollar on Wednesday on the back of a darkening growth outlook in the Eurozone bloc. The euro zone composite PMI fell deeper into contractionary territory to its lowest in three years. Growth indicators from industrial output data to PMI and sentiment readings in recent weeks are all suggesting that the euro zone's economy is now either stagnating or even shrinking as weak external demand, consumer caution and high interest rates take their toll.Bank lending across the euro zone came to a near standstill last month, European Central Bank data showed on Wednesday, providing further evidence that the 20-nation bloc was skirting a recession. .Immediate resistance can be seen at 1.0639(38.2%fib), an upside break can trigger rise towards 1.0686 (23.6%fib).On the downside, immediate support is seen at 1.0563(11DMA), a break below could take the pair towards 1.0537(61.8%fib).
GBP/USD: The British pound extended the previous day’s losses on Wednesday after gloomy economic data affirmed the view that the Bank of England will likely hold rates steady when it announces its policy decision next week. Data on Tuesday showed a labour market that was loosening, while the flash reading of the S&P Global UK Purchasing Managers’ Index (PMI) for the services sector fell in October to 49.2, the lowest reading since January and below the 50 threshold that separates growth from contraction. The pound was down 0.3% against the dollar to $1.2102.. Immediate resistance can be seen at 1.2121(5DMA), an upside break can trigger rise towards 1.2132(38.2%fib).On the downside, immediate support is seen at 1.2095(23.6%fib), a break below could take the pair towards 1.2037 (Oct 4th low).
USD/CAD: The Canadian dollar weakened to a seven-month low against its U.S. counterpart on Wednesday as investors raised bets that the Bank of Canada’s tightening campaign is completed after the central bank’s latest move to leave interest rates on hold. The Canadian central bank held its key overnight rate at a 22-year high of 5.0%, as expected, for a second straight meeting. It said the path to avoid a recession had narrowed, while leaving the door open to more rate hikes . The loonie was trading 0.4% lower at 1.3790 to the greenback , after touching its weakest since March 15 at 1.3810.Immediate resistance can be seen at 1.3807 (Daily high), an upside break can trigger rise towards 1.3820(23.6%fib).On the downside, immediate support is seen at 1.3790(38.2%fib), a break below could take the pair towards 1.3783 (5DMA).
USD/JPY: The dollar also kept the yen pinned near the closely watched 150 threshold on Wednesday as traders were on alert for any signs of intervention by Japanese authorities. Pressure is mounting on the Bank of Japan to change its bond yield control as global interest rates rise. A hike to an existing yield cap set just three months ago is being discussed as a possibility in the run-up to next week's policy meeting. The dollar index gained 0.27%, a near 1-week high against a basket of currencies, while the dollar was steady versus the yen at 150.08 Strong resistance can be seen at 150.24(23.6%fib),an upside break can trigger rise towards 150.30(Daily high).On the downside, immediate support is seen 150.02 (5DMA)a break below could take the pair towards 149.88 (38.2%fib).
Equities Recap
European shares ended flat on Wednesday amid mixed earnings reports, as a slump in shares of French payment firm Worldline on a forecast cut was offset by a boost from Dassault Systems and Deutsche Bank's upbeat results.
UK's benchmark FTSE 100 closed up by 0.33 percent, Germany's Dax ended up by 0.08 percent, France’s CAC finished the day up by 0.31 percent.
U.S. stocks tumbled in a broad sell-off on Wednesday as Alphabet shares slid after the Google parent posted disappointing earnings and as U.S. Treasury yields rose, reviving fears that interest rates could stay higher for longer.
Dow Jones closed down by 0.32%percent, S&P 500 closed down by 1.43% percent, Nasdaq settled down by 2.43 % percent.
Treasuries Recap
U.S. Treasury yields on Wednesday climbed after an auction of five-year notes showed weak demand and following data indicating that new-home sales accelerated in September, affirming market expectations of prolonged high rates heading into 2024.
The yield on benchmark 10-year Treasury notes was up 11.5 basis points (bps) at 4.954%. It hit a 16-year high of more than 5% on Monday.
Commodities Recap
Safe-haven gold gained on Wednesday, buoyed by continued conflict in the Middle East, while investors looked forward to key U.S. economic data for further cues on the Federal Reserve’s policy path.
Spot gold was up 0.7% at $1,983.89 per ounce by 9:51 a.m. ET (1351 GMT), having declined in the previous two sessions and trading below a five-month high hit last week. U.S. gold futures rose 0.5% to $1,995.20.
Oil prices rose about 2% on Wednesday, buoyed by worries about conflict in the Middle East, but gains were capped by higher U.S. crude inventories and gloomy economic prospects in Europe.
Brent crude futures rose $2.06, or 2.34%, to settle at $90.13 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $1.65, or 1.97%, to close at $85.39 a barrel.