Posted at 13 January 2024 / Categories Market Roundups
Market Roundup
•U.S. producer prices unexpectedly fall in December
•U.S. and Britain carry out strikes against Houthis in Yemen
•US Dec Core PPI (YoY) 1.8% ,1.9% forecast,2.0% previous
•US Dec PPI (MoM) -0.1%, 0.1% forecast,0.0% previous
•US Dec Core PPI (MoM) 0.0% ,0.2% forecast,0.0% previous
•US Dec PPI (YoY) 1.0% ,1.3% forecast,0.9% previous
•US Dec PPI ex. Food/Energy/Transport (MoM) 0.2% ,0.1% previous
•US PPI ex. Food/Energy/Transport (YoY) 2.5% ,2.5% previous
•U.S. Baker Hughes Oil Rig Count 499 ,501 previous
•U.S. Baker Hughes Total Rig Count 619 ,621 previous
Looking Ahead Economic Data(GMT)
•No Data Ahead
Looking Ahead Events And Other Releases(GMT)
• No Events Ahead
Currency Summaries
EUR/USD: The euro declined on Friday as dovish comments from the European Central Bank (ECB) weighed on euro.ECB President Christine Lagarde said on Thursday the hardest and worst bit regarding inflation was likely over and that interest rates would be cut if inflation falls to the 2% level.Pushing back on those expectations, chief ECB economist Philip Lane said that recent inflation data broadly confirmed current thinking at the central bank, meaning rate cuts are not a near-term topic of debate. On the data front, French consumer price inflation (CPI) rose 4.1% year-on-year in December, while Spain's annual inflation fell to 3.1% last month. The euro dipped 0.15% to $1.09555. Immediate resistance can be seen at 1.1000(23.6%fib), an upside break can trigger rise towards 1.1038(Jan 2nd high).On the downside, immediate support is seen at 1.0910(38.2%fib), a break below could take the pair towards 1.0878(5th Jan low).
GBP/USD: The British pound initially dipped against the dollar on Friday but recovered some ground as investors digested UK GDP data. Britain's economy grew 0.3% month-on-month in November, more than the 0.2% expected by economists, after shrinking 0.3% in October. Yet output shrank 0.2% in the three months to the end of November. The pound has benefited in recent months from UK inflation running hotter than the U.S. and Europe. That's caused traders to expect fewer rate cuts from the Bank of England than its two major peers, supporting British bond yields and making sterling look relatively more attractive.Traders currently expect around 125 basis points of interest rate cuts from the BoE next year, according to money market pricing. Immediate resistance can be seen at 1.2804(23.6%fib), an upside break can trigger rise towards 1.2821(Higher BB).On the downside, immediate support is seen at 1.2719 (Daily low), a break below could take the pair towards 1.2683(38.2%fib).
USD/CAD: The Canadian currency was little changed versus its US counterpart on Friday, as oil gave back much of its earlier gains while investors awaited domestic inflation data next week, which could offer hints about the Bank of Canada's policy stance. Canada's inflation report for December is due on Tuesday. Economists expect inflation to climb to 3.3% from 3.1% in November.The price of oil, one of Canada's main exports, fell from a two-week high after the US and UK launched air and naval attacks on Houthi targets in Yemen, but was still up 0.9% at $72.68 per barrel at the time of settlement. The loonie was trading nearly unchanged at 1.3403 to the greenback , after moving in a range of 1.3344 to 1.3410.Immediate resistance can be seen at 1.3408 (38.2%fib), an upside break can trigger rise towards 1.3462 (23.6%fib).On the downside, immediate support is seen at 1.3361(50%fib), a break below could take the pair towards 1.3321 (61.8%fib).
USD/JPY: The dollar dipped against the yen on Friday after U.S. producer prices unexpectedly fell in December, raising expectations of an early U.S. rate cut. Producer price index for final demand decreased by 0.1%, driven by a decline in the cost of goods. Prices for services remained unchanged last month, raising the likelihood of lower inflation in the upcoming months. The U.S. currency benefited earlier from risk aversion after the strikes on Yemen, which came in retaliation for attacks by Iran-backed Houthi forces on Red Sea shipping, widening regional conflict stemming from Israel's war in Gaza. Traders see an 80% probability of an interest rate cut in March, according to the CME Fedwatch tool, compared with about a 70% chance seen before the PPI report. Strong resistance can be seen at 145.29(38.2%fib),an upside break can trigger rise towards 146.19( 23.6%fib).On the downside, immediate support is seen 144.39(50% fib)a break below could take the pair towards 143.62(61.8%fib).
Equities Recap
European markets closed higher on Friday as bond rates fell following disappointing U.S. data, which raised chances of early interest rate cut from the Federal Reserve and other major central banks, while Airbus shares rose after the company announced record annual aircraft orders.
UK's benchmark FTSE 100 closed up by 0.64 percent, Germany's Dax ended up by 0.95 percent, France’s CAC finished the day up by 1.05 percent.
U.S. equities finished little changed on Friday, bouncing between minor gains and losses, as mixed bank profits outweighed lower-than-expected inflation data that boosted prospects for Federal Reserve interest-rate cuts.
Dow Jones closed down by 0.31 % percent, S&P 500 closed up by 0.08% percent, Nasdaq settled up by 0.02 % percent.
Treasuries Recap
U.S. Treasury yields fell on Friday as December producer pricing data came in below expectations, raising the prospect of an early interest rate cut by the Federal Reserve this year.
The benchmark 10-year Treasury yield was slightly lower on the day at 3.969% , while the two-year yield dropped 6.4 basis points to 4.198% .
Commodities Recap
Gold prices reached a one-week high on Friday as the Middle East war escalated, fueling safe-haven buying, while lower U.S. producer price inflation reinforced speculation that the Federal Reserve may cut interest rates sooner.
Spot gold was up 1% at $2,048.21 per ounce at 2:24 p.m. ET (1924 GMT), after climbing as much as 1.7% earlier in the session.U.S. gold futures settled 1.6% higher at $2,051.60.
Oil prices rose on Friday after several oil tankers were diverted away from the Red Sea following overnight raids by the United States and Britain on Houthi targets in Yemen.
Brent crude futures rose 88 cents, or 1.1%, to settle at $78.29 a barrel. The session high was more than $80, highest this year so far. U.S. West Texas Intermediate crude futures climbed 66 cents, or 0.9%, to settle at $72.68, paring gains after touching a 2024 high of $75.25.