Posted at 27 October 2023 / Categories Market Roundups
Market Roundup
•US economic growth accelerates in third quarter
•Investors monitor developments in Israel-Hamas conflict
•US crude inventories up more than expected -EIA
•US Sep Core Durable Goods Orders (MoM) 0.5%,0.2% forecast,0.4% previous
•US Sep Jobless Claims 4-Week Avg. 207.50K,205.75K previous
•US Sep Durables Excluding Defense (MoM) 5.8%,-0.7% previous
•US Sep Goods Trade Balance -85.78B,-85.50B forecast,-84.64B previous
•Canada Aug Average Weekly Earnings (YoY) 4.15%, 4.3 previous
•US Initial Jobless Claims 210K,208K forecast,198K previous
•US Continuing Jobless Claims 1,790K,1,740K forecast,1,734K previous
•Canada Manufacturing Sales (MoM) -0.1%, 0.7% previous
•US Wholesale Inventories (MoM) 0.0%,0.1% forecast,-0.1% previous
•US Sep Goods Orders Non Defense Ex Air (MoM) 0.6%, 0.1% forecast,0.9% previous
•US Sep Durable Goods Orders (MoM) 4.7%, 1.7% forecast,0.2% previous
•US Sep GDP Price Index (QoQ) (Q3) 3.5%,2.5%forecast,1.7% previous
•US PCE Prices (Q3) 2.9%,2.5% previous
•US GDP Sales (Q3) 3.5%,4.5% forecast,2.1% previous
• US GDP (QoQ) (Q3) 4.9%,4.3% forecast,2.1% previous
Looking Ahead Economic Data(GMT)
• 00:30 Australia PPI (YoY) (Q3) 3.9% previous
• 00:30 Australia PPI (QoQ) (Q3) 0.7% forecast, 0.5% previous
•01:30 Chinese Sep Industrial profit YTD -11.7% previous
Looking Ahead Events And Other Release (GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro dipped against dollar on Thursday after the European Central Bank kept its interest rates steady as expected. The European Central Bank left interest rates unchanged as expected on Thursday, ending an unprecedented streak of 10 consecutive rate hikes, even as it insisted that rising market talk of rate cuts was premature.Lagarde argued that the euro zone economy was weak, possibly weaker than predicted last month, but that price pressures remained strong and could be aggravated further if the Middle East conflict drives energy costs up again.She also tried but failed to push back on rate cut expectations. Markets now see a high chance the ECB will start cutting interest rates in April and fully price in a move by June, followed by two other cuts before the end of the year. Immediate resistance can be seen at 1.0581(14DMA), an upside break can trigger rise towards 1.0606 (38.2%fib).On the downside, immediate support is seen at 1.0517(23.6%fib), a break below could take the pair towards 1.0500(Psychological level).
GBP/USD: Sterling held near three-week low on Thursday after a slew of economic market data this week affirmed the view that the Bank of England (BoE) will likely hold rates steady at its policy meeting 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. Although inflation unexpectedly held steady at 6.7% in September, the highest of any major advanced economy, the BoE is expected to leave rates at 5.25% on Nov. 2, according to the vast majority of economists polled. Immediate resistance can be seen at 1.2188(38.2%fib ), an upside break can trigger rise towards 1.2201(Oct 13th high).On the downside, immediate support is seen at 1.2076(23.6%fib), a break below could take the pair towards 1.2041(Oct 4th low).
USD/CAD: The Canadian dollar weakened to a seven-month low against its U.S. counterpart on Thursday as investor sentiment turned gloomier and after the Bank of Canada said it may not need to raise interest rates further. The BoC may not have to tighten further if inflation cools in line with the central bank’s expectations, Governor Tiff Macklem said in an interview with the Canadian Broadcasting Corp. The price of oil, one of Canada’s major exports, settled 2.6% lower at $83.21 a barrel . In contrast, a preliminary estimate showed Canadian factory sales falling 0.1% in September from August, adding to recent evidence of a slowdown in the domestic economy. The Canadian dollar was trading 0.1% lower at 1.3815 to the greenback. Immediate resistance can be seen at 1.4014 (5 DMA), an upside break can trigger rise towards 1.4170 (Daily high).On the downside, immediate support is seen at 1.4000 (Psychological level), a break below could take the pair towards 1.3835 (21 DMA).
USD/JPY: The dollar steadied around 150.33 level against the yen on Thursday after data showed the U.S. economy grew at its fastest pace in nearly two years in the third quarter, once again defying dire warnings of a recession that have lingered since 2022. The Japanese yen weakened to hit a fresh one-year low of 150.78 per dollar and was not far off the 32-year low of 151.94 it touched in October last year, which led to Japanese authorities intervening in the currency market.Japanese Finance Minister Shunichi Suzuki earlier warned traders against selling the yen again, saying authorities were closely watching moves. He made no direct comment about the potential for intervention.A recent surge in global interest rates is heightening pressure on the Bank of Japan to change its bond yield control next week. Strong resistance can be seen at 150.83(Daily high),an upside break can trigger rise towards 151.01(23.6%fib).On the downside, immediate support is seen 149.85 (11DMA)a break below could take the pair towards 149.57 (38.2%fib).
Equities Recap
European shares pared early losses on Thursday after the European Central Bank kept its interest rates steady as expected, while downbeat corporate updates, including from Standard Chartered weighed on the benchmark index.
UK's benchmark FTSE 100 closed down by 0.81 percent, Germany's Dax ended down by 1.08 percent, France’s CAC finished the day down by 0.37 percent.
U.S. stocks tumbled on Thursday, dragged by tech and tech-adjacent megacap shares as investors digested mixed quarterly earnings and signs of economic resiliency that could encourage the Federal Reserve to keep interest rates at a restrictive level longer than expected.
Dow Jones closed down by 0.76% percent, S&P 500 closed down by 1.18% percent, Nasdaq settled down by 1.76% percent.
Treasuries Recap
U.S. Treasury yields fell on Thursday following the release of weaker-than-expected U.S. inflation and disposable income data, supporting market sentiment that interest rates are at, or near, their peak.
The benchmark yield on 10-year Treasury notes was down 10.6 basis points at 4.847%. It breached 5% on Monday after doing so last week for the first time in 16 years.
Commodities Recap
Gold ticked higher on Thursday as steady safe-haven demand fuelled by the Middle East conflict helped bullion weather pressure from strong U.S. data that quelled recession fears.
Spot gold was up 0.3% at $1,986.39 per ounce by 1:50 p.m. ET (1750 GMT). Earlier in the session, prices were just shy of the five-month high hit on Friday.
Oil prices fell more $2 a barrel on Thursday as fears of a wider Middle East conflict eased at the same time that U.S. demand showed signs of weakening.
Brent crude futures settled at $87.93 a barrel, sliding $2.20 or 2.44%. On Wednesday, Brent settled nearly 2% higher. U.S. West Texas Intermediate crude futures finished at $83.21 a barrel, down $2.18, or 2.55%.