Posted at 28 December 2023 / Categories Market Roundups
Market Roundup
•Gold hits highest since Dec. 4 record peak
•Markets bet on 87% chance of Fed rate cut in March
•Platinum hits highest level since June
•US Wholesale Inventories (MoM) -0.2%,-0.2% forecast, -0.4% previous
•US Jobless Claims 4-Week Avg. 212.00K,212.00K previous
•US Continuing Jobless Claims 1,875K,1,875K forecast,1,865K previous
•US Initial Jobless Claims 210K forecast, 205K previous
•US Nov Goods Trade Balance -90.27B, -88.40B,-89.56B previous
•US Nov Retail Inventories Ex Auto -0.8%,-0.9% previous
•US Nov Pending Home Sales Index 71.6,71.4 previous
•US Nov Pending Home Sales (MoM) 0.0%, 1.0% forecast,-1.5% previous
• US Natural Gas Storage -87B,-79B forecast,-87B previous
•US Distillate Fuel Production 0.243M ,-0.114M previous
•US Crude Oil Inventories -7.114M,-2.704M forecast, 2.909M previous
Looking Ahead Economic Data(GMT)
• 00:30 Australia Nov Housing Credit 0.4% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro rose against dollar on Thursday as investors wagered on U.S. interest rate cuts next year. The U.S. dollar is declining against euro as traders are intensify their predictions that the U.S. Federal Reserve will cut interest rates in 2024 due to the easing of inflationary pressures. On Thursday's data front, Spanish retail sales rose 5.2% in November from a year earlier after rising by a revised 5.3% in October. Markets await the U.S. initial jobless claims data, due at 1330 GMT, for further cues on Fed monetary policy.Investors are betting on an 88% chance of a rate cut as early as March, according to the CME FedWatch tool, a huge swing from a month ago when the probability was just 21%. The euro was last at $1.1117, having touched a five-month peak of $1.1125 earlier in the session. The single currency is heading for a yearly gain of 3.7%, its strongest performance since 2020.Immediate resistance can be seen at 1.1145(Higher BB), an upside break can trigger rise towards 1.1177(23.6%fib).On the downside, immediate support is seen at 1.1066(38.2%fib), a break below could take the pair towards 1.1000(Psychological level).
GBP/USD: Sterling touched a fresh five-month high against a broadly softer dollar on Thursday, putting the currency on track to end the month with gains of more than 1.3%. The dollar is dipping as traders increase bets that the U.S. Federal Reserve will slash interest rates in 2024 amid moderating inflation. Traders are looking ahead to 2024 after Wednesday's announcement that UK finance minister Jeremy Hunt will present the spring budget on March 6, in what is likely to be the government's last major chance to prepare the ground for an election that must be held by January 2025. At 11:19 GMT sterling was unchanged at $1.28, after earlier hitting $1.2825, its highest level since Aug. 1. Immediate resistance can be seen at 1.2807(Higher BB), an upside break can trigger rise towards 1.2835(Higher BB).On the downside, immediate support is seen at 1.2736(38.2%fib), a break below could take the pair towards 1.2665(50%fib).
USD/CAD: The loonie remained relatively unchanged on Thursday in thin trading as investors looked ahead to Federal Reserve interest rate cuts next year. Markets see the Fed's first rate cut coming in March and are pricing in 156 basis points of easing by next December. Geopolitical tensions remained elevated as Middle Eastern leaders have warned the conflict could widen, and Israel's border with Lebanon is worrisome, following attacks by Hezbollah, Streeter added.U.S. allies including Italy and Spain have been reluctant to be associated with President Joe Biden's Red Sea task force, reflecting fissures created by the war in Gaza. Volumes are expected to be light with only a few trading days left in the calendar year. Immediate resistance can be seen at 1.3160 (38.2%fib), an upside break can trigger rise towards 1.3321 (50%fib).On the downside, immediate support is seen at 1.3188 (23.6%fib), a break below could take the pair towards 1.3159 (Lower BB).
USD/JPY: The dollar declined versus the yen on Thursday as investors anticipated potential interest rate cuts by the Federal Reserve in the coming year. An absence of major news has not stopped investors from ramping up bets on rapid-fire rate cuts next year from the Federal Reserve. Futures now imply an 88% chance of a rate cut as early as March, a huge swing from a month ago when the probability was just 21%.The market has about 157 basis points of easing priced in for 2024, and sees rates reaching 3.00-3.25% over 2025. The day's bigger mover was the Japanese yen. The dollar dropped 0.63% to 140.93 yen , its lowest since July.The yen is particularly sensitive to moves in U.S. rates and the yield on the benchmark 10 year U.S. Treasury dropped nearly 10 basis points on Wednesday to its lowest since July. Strong resistance can be seen at 141.97(38.2%fib),an upside break can trigger rise towards 142.76(50%fib).On the downside, immediate support is seen 140.81(23.6%fib)a break below could take the pair towards 140.00(Psychological level).
Equities Recap
European shares inched lower on Thursday as weakness in banking stocks and oil majors weighed, though the markets looked set for a strong finish to the year on expectations central banks could cut borrowing costs next year.
The UK's benchmark FTSE 100 closed down by 0.03 percent, Germany's Dax ended down by 0.24 percent, and France’s CAC finished the day down by 0.48 percent.
Wall Street's main indexes traded higher in light trading on the penultimate trading day of 2023, while the benchmark S&P 500 hovered around its all-time high on hopes of early interest rate cuts next year.
At (17:53 GMT) Dow Jones was up by 0.20 percent, S&P 500 was up by 0.19 percent, Nasdaq was up by 0.20 percent.
Commodities Recap
Gold prices steadied on Thursday, after hitting a more than three-week high earlier, as an uptick in U.S. bond yields undermined the support from expectations of rate cuts by the Federal Reserve early next year.
Spot gold lost 0.2% to $2,073.32 per ounce by 12:12 p.m. ET (1712 GMT), after rising as high as $2,088.29 earlier, the most since Dec. 4, when bullion hit its all-time peak.U.S. gold futures were down 0.5% to $2,083.70.
Oil prices fell more than 1% on Thursday as concerns eased about shipping disruptions along the Red Sea route, even as tensions in the Middle East continue to fester.
Front month February Brent crude futures were down $1.02, about 1.3%, at $78.63 a barrel by 1443 GMT in subdued trade ahead of their imminent expiry, while the more active March contract was down 92 cents, about 1.2%, at $78.62 a barrel.
U.S. WTI crude futures were trading 82 cents, or about 1.1%, lower at $73.29 a barrel.