Posted at 18 January 2024 / Categories Market Roundups
Market Roundup
•US retail sales beat expectations in December
•Canada Dec RMPI (MoM) -4.9%, -1.6% forecast,-4.2% previous
•US Dec Retail Control (MoM) 0.8%,0.4% previous
•Canada IPPI (YoY) -2.7%,-2.3% previous
•US Dec Retail Sales (MoM) 0.6%,0.4% forecast,0.3% previous
•US Retail Sales Ex Gas/Autos (MoM) 0.6%,0.6% previous
•US Dec Core Retail Sales (MoM) 0.4%,0.2% forecast,0.2% previous
•Canada Nov Foreign Securities Purchases 11.43B,-15.75B previous
•US Export Price Index (MoM) -0.9%,-0.6% forecast,-0.9% previous
•US Dec Import Price Index (MoM) 0.0%,-0.5% forecast,-0.4% previous
•US Redbook (YoY) 5.59%,5.9% previous
•US Dec Manufacturing Production (MoM) 0.1%, 0.0% forecast,0.3% previous
•US Dec Industrial Production (YoY) 0.98%, -0.39% previous
•US Dec Capacity Utilization Rate 78.6%,78.7% forecast, 78.8% previous
•US Dec Industrial Production (MoM) 0.1%,0.0% forecast, 0.2% previous
Looking Ahead Economic Data(GMT)
•00:30 Australia Dec Unemployment Rate 3.9% forecast, 3.9% previous
•00:30 Australia Dec Full Employment Change 57.0K previous
•00:30 Australia Dec Employment Change 17.6K forecast,61.5K previous
•00:30 Australia Dec Participation Rate 67.1% forecast,67.2% previous
•04:30 Japan Nov Capacity Utilization (MoM) 1.5% previous
•04:30 Japan Nov Industrial Production (MoM) -0.9% forecast,1.3% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro dipped on Wednesday after U.S. retail sales data signaled economic strength, dimming expectations for imminent rate cuts from the Federal Reserve.Retail sales rose 0.6% last month after an unrevised 0.3% gain in November, the Commerce Department's Census Bureau said. Economists polled had forecast retail sales gaining 0.4%. Markets see the Fed as likely to trim rates in March, expectations for a first cut of at least 25 basis points (bps) are down to 53.2%, according to CME's FedWatch Tool, opens new tab, from 65.1% on Tuesday. The euro was down 0.01% at $1.0873 against the dollar. Immediate resistance can be seen at 1.0934(50%fib), an upside break can trigger rise towards 1.0955(61.8%fib).On the downside, immediate support is seen at 1.0868(38.2%fib), a break below could take the pair towards 1.0853(Lower BB).
GBP/USD: the British pound gained ground on Wednesday after the release of data indicating a rise in the annual consumer inflation rate for December. This marked the first increase in 10 months and surpassed expectations, presenting a challenge to the prevailing belief that Bank of England rate cuts are imminent. Official data showed that Britain's annual consumer price inflation rate surged to 4% in December, up from November's 3.9%, which marked its lowest point in over two years. Contrary to a consensus among economists predicting a reading of 3.8%, the actual figures surpassed expectations. Sterling was last trading at $1.268, up 0.32% on the day. Immediate resistance can be seen at 1.2698(Daily high), an upside break can trigger rise towards 1.2716(23.6%fib).On the downside, immediate support is seen at 1.2611 (50%fib), a break below could take the pair towards 1.2591(Lower BB).
USD/CAD: The Canadian dollar weakened to a five-week low against its U.S. counterpart, driven by a reassessment among investors regarding the likelihood of a Federal Reserve interest rate cut, leading to a sell-off in riskier assets. Due to its significant role as a commodities producer, particularly in oil, the Canadian dollar is susceptible to fluctuations in investor sentiment. The safe-haven U.S. dollar added to recent gains against a basket of major currencies and Wall Street's main indexes dropped after upbeat U.S. retail sales data tempered hopes of the Fed kicking off its rate-cut campaign as early as March. The loonie was trading 0.2% lower at 1.3525 to the greenback, or 73.94 U.S. cents, after touching its weakest intraday level since Dec. 13 at 1.3541. Immediate resistance can be seen at 1.3546 (23.6% fib), an upside break can trigger rise towards 1.3576 (Higher BB).On the downside, immediate support is seen at 1.3475(38.2% fib), a break below could take the pair towards 1.3419(50% fib).
USD/JPY: The dollar strengthened against the yen on Wednesday driven by optimistic December U.S. retail sales data that diminished expectations of the Federal Reserve launching its anticipated rate-cut initiative as early as March. Data showed discounts from retailers and increased motor-vehicle purchases supported a higher-than-expected rise in U.S. retail sales, keeping the economy on a solid footing in 2024.That reinforced the view that the Fed may not cut rates as quickly as previously expected this year.Traders' expectations of a 25-basis-point Fed rate in March dipped to 55%, from around 60% before the data was released. The dollar touched 148.52 against the rate-sensitive Japanese yen , its highest since Nov. 28, and was last up 0.71% at 148.23. Strong resistance can be seen at 148.17(Daily high),an upside break can trigger rise towards 148.54( Higher BB).On the downside, immediate support is seen 146.61(38.2% fib)a break below could take the pair towards 145.55(50%fib).
Equities Recap
European shares declined on Wednesday as more hawkish remarks from European Central Bank (ECB) officials tempered interest rate cut expectations, while glum economic data from China further soured investor sentiment.
UK's benchmark FTSE 100 closed down by 1.96 percent, Germany's Dax ended down by 0.84 percent, France’s CAC finished the day down by 1.07 percent.
Wall Street stocks finished lower on Wednesday after upbeat December U.S. retail sales data eroded expectations the Federal Reserve will kick off its rate-cut campaign as early as March.
Dow Jones closed down by 0.25% percent, S&P 500 closed down by 0.56% percent, Nasdaq settled down by 0.59% percent.
Treasuries Recap
U.S. Treasury yields were pressured higher by the surprisingly strong retail sales print combined with an unexpected rise in UK inflation.
Benchmark 10-year notes last fell 9/32 in price to yield 4.1%, from 4.066% late on Tuesday.
The 30-year bond last fell 5/32 in price to yield 4.3125%, from 4.305% late on Tuesday.
Commodities Recap
Gold prices fell to a more than one-month low on Wednesday as strong economic data strengthened dollar and Treasury yields and lowered market expectations of a U.S. rate cut in March.
Spot gold was down 1.2% at $2,003.89 per ounce as of 01:55 p.m. ET (1855 GMT), lowest since Dec.13. It fell 1.3% in the previous session in its biggest single-day decline since Dec. 4, 2023.U.S. gold futures settled 1.2% lower at $2006.5.
Oil prices were near flat on Wednesday as severe cold that disrupted some U.S. oil production offset disappointing economic growth in China that stoked worries about energy demand.
Brent crude futures settled down 41 cents to $77.88 a barrel. U.S. West Texas Intermediate crude futures (WTI) gained 16 cents at $72.56.