Posted at 14 December 2023 / Categories Market Roundups
Market Roundup
•Fed officials see 75 basis points of cuts next year
•UK NIESR Monthly GDP Tracker -0.1%, 0.1% previous
•US Nov PPI ex. Food/Energy/Transport (MoM) 0.1%, 0.1% previous
•US Nov Core PPI (MoM) 0.0%, 0.2% forecast,0.0% previous
•US Nov PPI (MoM) 0.0%,0.1% forecast, -0.5% previous
•US PPI (YoY) 0.9%,1.0% forecast,1.3% previous
•US PPI ex. Food/Energy/Transport (YoY) 2.5%, 2.9% previous
• US Nov Core PPI (YoY) 2.0%,2.2% forecast,2.4% previous
•US Crude Oil Inventories-4.259M, -0.650M forecast,-4.632M previous
•US Gasoline Inventories 0.408M, 1.933M forecast,5.421M previous
Looking Ahead Economic Data (GMT)
•No data Ahead
Looking Ahead Events And Other Release (GMT)
•N0 significant Events
Currency Summaries
EUR/USD: The euro strengthened on Wednesday as dollar tumbled after Federal Reserve indicated in fresh economic predictions that U.S. interest rate rises have ended and lower borrowing rates are on the horizon for 2024. A near unanimous 17 of 19 Fed officials project that the policy rate will be lower by the end of 2024, with the median projection showing the rate falling three-quarters of a percentage point from the current 5.25%-5.50% range. No officials see rates higher by the end of next year. The Fed kept interest rates steady for the third meeting in a row, as was widely expected. The euro rose 0.80% to $1.0882 and hit $1.08970, the highest since Dec. 1. The single currency is on track for its largest one-day percentage gain since Nov. 14. Immediate resistance can be seen at 1.0920(23.6%fib), an upside break can trigger rise towards 1.1000 (Psychological level).On the downside, immediate support is seen at 1.0836(38.2%fib), a break below could take the pair towards 1.0821 (5DMA).
GBP/USD: The pound rose against dollar on Wednesday after the Federal Reserve signalled that its rate-hiking program is coming to an end and that borrowing prices would fall in 2024. Fed Chair Jerome Powell said during a press conference that the Fed is not likely to hike further and that the Fed is very focused on not making the mistake of keeping rates too high for too long.Traders are now pricing in a 72% probability of a rate cut in March, up from 49% earlier on Wednesday, and a 94% likelihood by May, according to the CME Group's FedWatch Tool.The U.S. dollar index dropped to 102.89, down 0.83% on the day, and the lowest since Nov. 30.With the Fed meeting now concluded, investors will turn to a host of international central bank meetings on Thursday.These include the European Central Bank, Bank of England, Norges Bank and Swiss National Bank. The Norwegian central bank is considered to be the only one that could potentially raise rates. There is also a risk the SNB could dial back its support for the franc in currency markets.. Immediate resistance can be seen at 1.2675(23.6%fib), an upside break can trigger rise towards 1.2732(Dec 4th high).On the downside, immediate support is seen at 1.2600 (5DMA), a break below could take the pair towards 1.2583(38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday after the U.S. Federal Reserve flagged an end to its interest rate hike cycle. The U.S. central bank held interest rates steady on Wednesday. A near unanimous 17 of 19 Fed officials project the policy rate will be lower by the end of 2024 than it is now, with the median projection showing the rate falling three-quarters of a percentage point from the current 5.25%-5.50%.Traders are now pricing in a near 60% chance of U.S. rate cuts in March 2024, according to the CME Fedwatch tool. Data showed U.S. producer prices were unexpectedly unchanged in November, indicating inflation at the factory gate continued to subside.The loonie was trading 0.20% higher at 1.3490 to the greenback,, its strongest level since Dec 4th.Immediate resistance can be seen at 1.3546 (38.2% fib), an upside break can trigger rise towards 1.3556 (5DMA).On the downside, immediate support is seen at 1.3485(23.6% fib), a break below could take the pair towards 1.3426 (Sep 29th low).
USD/JPY: the U.S. dollar declined against the Japanese yen on Wednesday after Federal Reserve left interest rates unchanged and U.S. central bank chief Jerome Powell said the historic tightening of monetary policy is likely over. Powell said the central bank was likely done raising interest rates, but kept open the option to act again if needed, noting that "the economy has surprised forecasters.He also noted that the question of when it will be appropriate to cut rates is coming into view. The greenback fell 1.67% to 143.03 Japanese yen, the lowest since Dec. 8. Strong resistance can be seen at 142.95(38.2%fib),an upside break can trigger rise towards 143.75(50%fib).On the downside, immediate support is seen 141.89(23.6%fib)a break below could take the pair towards 141.00(Psychological level).
Equities Recap
European shares were subdued on Wednesday as investors broadly stayed away from risky bets ahead of the Federal Reserve's much-anticipated interest rate decision.
UK's benchmark FTSE 100 closed up by 0.08 percent, Germany's Dax ended down by 0.15 percent, France’s CAC finished the day down by 0.16 percent.
The Dow Jones industrial average hit its first record closing high since January 2022 and the S&P 500 and Nasdaq rallied more than 1% each on Wednesday after the Federal Reserve signaled that its interest rate-hiking policy is at an end and that it sees lower borrowing costs in 2024.
Dow Jones closed up by 1.40 percent, S&P 500 ended up by 1.37 percent, Nasdaq finished the day up by 1.38 percent.
Commodities Recap
Gold prices rose more than 1% on Wednesday after the U.S. Federal Reserve flagged an end to its interest rate hike cycle and indicated possible rate cuts next year.
Spot gold gained 1.3% to $2,004.79 per ounce as of 2:34 p.m. ET (1934 GMT). U.S. gold futures settled 0.2% higher at $1,997.30.
Oil prices edged up about 1% on Wednesday from a five-month low in the prior session on a bigger-than-expected weekly withdrawal from U.S. crude storage and on worries about the security of Middle East oil supplies after a tanker attack in the Red Sea.
Brent futures rose $1.02, or 1.4%, to settle at $74.26 a barrel. U.S. West Texas Intermediate (WTI) crude rose 86 cents, or 1.3%, to settle at $69.47.