Posted at 27 December 2023 / Categories Market Roundups
Market Roundup
•US Redbook (YoY) 4.1%, 3.6% previous
• US Dec Richmond Services Index 0,1 previous
• US Dec Richmond Manufacturing Index -11,-7 forecast,-5 previous
• US Dec Richmond Manufacturing Shipments-17, -8 previous
• US Dec Dallas Fed Services Revenues -4.3,2.4 previous
• US Dec Texas Services Sector Outlook-8.7, -11.6 previous
Looking Ahead Economic Data (GMT)
•23:50 Japan Nov Large Scale Retail Sales YoY (YoY) 4.0% previous
•23:50 Japan Nov Retail Sales (YoY) 5.0% forecast, 4.2% previous
•23:50 Japan Nov Industrial Production (MoM) -1.6% forecast, 1.3% previous
•23:50 Japan Nov Foreign Bonds Buying 2,286.1B previous
Looking Ahead Events And Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD: The euro reached five-month high against dollar on Wednesday amid anticipation that the Federal Reserve might reduce interest rates soon, although restrained year-end trading volumes constrained market dynamics. Market pricing now shows a more than 80% chance the Fed is likely to begin cutting rates next March, according to the CME FedWatch tool, with over 150 basis points of easing priced in for all of 2024 .The euro was up 0.63% at $1.111 . The single currency is up nearly 3% in the year and is on course for a third straight month of gains, matching the run it had last year. Immediate resistance can be seen at 1.1123(Daily high) an upside break can trigger rise towards 1.1174(23.6%fib).On the downside, immediate support is seen at 1.1090(38.2%fib), a break below could take the pair towards 1.1018(50%fib).
GBP/USD: The pound strengthened against dollar on Wednesday and remained on track to be one of the best performing currencies in 2023. Investors expect that the Bank of England will not be able to cut interest rates as much as the Federal Reserve and European Central Bank, given that inflation is running higher in the UK.That has widened the gap between British bond yields and those in the U.S. and Europe, making them look more attractive and boosting the pound. The pound has climbed more than 4% against the dollar over the last three months and is on track to finish the year around 5% higher.Immediate resistance can be seen at 1.2803(23.6%fib), an upside break can trigger rise towards 1.2828(higher BB ).On the downside, immediate support is seen at 1.2722(38.2%fib), a break below could take the pair towards 1.2657(50%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as investors grew optimistic that major central banks could begin cutting interest rates in the upcoming year. The Canadian economy's soft patch has continued in the last few months and supports investor bets of an interest rate cut by the Bank of Canada in the first quarter of next year.Trading has been thin so far as no major economic data in the day and traders return from an extended Christmas break, with only a few trading days left in 2023.The loonie was trading 0.7% higher at 1.3201 to the greenback .Immediate resistance can be seen at 1.3254 (38.2% fib), an upside break can trigger rise towards 1.3319 (50%fib).On the downside, immediate support is seen at 1.3174(23.6% fib), a break below could take the pair towards 1.3134(Lower BB).
USD/JPY: The dollar strengthened versus the yen on Wednesday amid expectations that Bank of Japan will soon exit its ultra-loose policy. The Bank of Japan on Wednesday said it would reduce the amount of bonds it buys in its regular operations in the January-March quarter.A summary of opinions at the Bank of Japan’s Dec. 18-19 meeting also showed that BOJ policymakers saw the need to maintain policy for now, with some calling for a deeper debate on a future exit from massive stimulus. The dollar rose 0.16% to 142.64 Japanese yen and is headed for an 8.78% gain this year. Strong resistance can be seen at 142.92(38.2%fib),an upside break can trigger rise towards 143.43(11DMA).On the downside, immediate support is seen 141.81(23.6%fib)a break below could take the pair towards 141.00(Psychological level).
Equities Recap
European shares rose on Wednesday, with tech firms benefiting from an overnight Wall Street surge on continued optimism about interest rate cuts as early as next March, and miners benefiting from strong China data.
UK's benchmark FTSE 100 closed up by 0.36 percent, Germany's Dax closed up by 0.21 percent, France’s CAC closed up by 0.04 percent.
U.S. stocks edged higher on Wednesday, with the S&P 500 inching closer to its all-time high on prospects of early interest rate cuts by the Federal Reserve.
(At GMT 17:17)Dow Jones was up by 0.21%percent, S&P 500 was up by 0.05% percent, Nasdaq was up by 0.05% percent.
Commodities Recap
Gold prices crept up on Wednesday, hovering near their highest in almost three weeks, on market expectations the Federal Reserve will start cutting interest rates in the first quarter of 2024.
Spot gold was up nearly 0.1% at $2,068.59 per ounce, as of 0934 GMT, and was on track to mark an over 13% gain this year - its best since 2020.
Oil prices slipped on Wednesday, eating into the previous day's gains as investors monitored developments in the Red Sea, where shippers are returning despite further attacks on Tuesday.
Brent crude futures were down 53 cents, or 0.7%, at $80.54 a barrel by 10:59 a.m. EST (1559 GMT). U.S. West Texas Intermediate crude fell 67 cents, or 0.9%, to $74.90.