Posted at 15 September 2022 / Categories Market Roundups
Market Roundup
•US indexes up: Dow 0.10%, S&P 0.34%, Nasdaq 0.74%
•U.S. producer prices post second straight monthly decline
•US Aug PPI (MoM) -0.1%, -0.1% forecast, -0.5% previous
•US Aug PPI (YoY) 8.7% ,8.8% forecast, 9.8% previous
•US Aug PPI ex. Food/Energy/Transport (MoM) 0.2%, 0.2% previous
•US Core PPI (MoM) 0.4%, 0.3% forecast, 0.2% previous
•Canada Jul Manufacturing Sales (MoM) -0.9%, -0.9% forecast, -0.8% previous
•US Crude Oil Inventories 2.442M, 0.833M forecast, 8.844M previous
• US Gasoline Inventories -1.767M ,-0.858M forecast, 0.333M previous
• US Cushing Crude Oil Inventories -0.135M,-0.501M previous
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Full Employment Change -86.9K previous
• 01:30 Australia Aug 01:30 Employment Change 35.0K ,-40.9K previous
• 01:30 Australia Aug Unemployment Rate 3.4% forecast, 3.4% previous
Looking Ahead - Economic events and other releases (GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro initially edged higher on Wednesday but gave up ground as dollar pulled back on bets for an aggressive Federal Reserve approach to U.S. inflation, which rose unexpectedly last month. U.S. Labor Department data showed on Tuesday the headline Consumer Price Index edged up 0.1% last month versus expectations for a 0.1% decline, while core inflation surged 0.6%. The inflation data stoked expectations the Fed could raise U.S. borrowing costs faster and further than previously anticipated, with some even speculating there could be a 100-basis-point hike at the end of its Sept. 20-21 meeting. Immediate resistance can be seen at 1.0001(38.2%fib), an upside break can trigger rise towards 1.0100(38.2%fib).On the downside, immediate support is seen at 0.9956 (23.6%fib), a break below could take the pair towards 0.9882(Lower BB).
GBP/USD: Sterling gained against the dollar on Wednesday as the greenback moved lower and British inflation unexpectedly eased for the first time in a year.The pound rose 0.5% to $1.1546, pulling away from its three-decade low of $1.14070 hit last week. Sterling has been hit hard this year by surging inflation, a looming recession and concerns that tax cuts and increased public spending under a new government could exacerbate price pressures. The slide in the currency, down more than 15% against the dollar in 2020, is also a headache for the Bank of England since it increases the cost of imports and can cause more imported inflation. Immediate resistance can be seen at 1.1567(5DMA), an upside break can trigger rise towards 1.1747(38.2%fib).On the downside, immediate support is seen at 1.1452(23.6%fib),a break below could take the pair towards 1.1394 (Lower BB).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday, holding near an earlier one-week low, as investors bet that the Federal Reserve would lift interest rates to a higher end-point than the Bank of Canada. Money markets have priced in a terminal, or peak, level for rates next year of about 4.25% for the Fed and 4% for the BoC, a more aggressive end-point for both central banks after hotter-than-expected U.S. consumer price data on Wednesday. The Canadian dollar was nearly unchanged at 1.3165 to the greenback, or 75.96 U.S. cents, after touching its weakest intraday level since last Wednesday at 1.3206.Immediate resistance can be seen at 1.3181(23.6%fib), an upside break can trigger rise towards 1.3229 (Higher BB).On the downside, immediate support is seen at 1.3125(38.2%fib), a break below could take the pair towards 1.4102 (5DMA).
USD/JPY: The dollar edged lower against yen on Wednesday after media reports showed the Bank of Japan conducted a rate check in apparent preparation for currency intervention, while other majors tried to regain the ground they'd lost a day earlier on the surging dollar. The dollar slid more than 1% to 142.9 yen after the Nikkei website reported the rate check, citing unidentified sources. In a rate check, central bank officials call up dealers and ask for the price of buying or selling yen. The Japanese yen strengthened 0.95% versus the greenback at 143.06 per dollar.The dollar index fell 0.155%, with the euro up 0.07% to $0.9977. Strong resistance can be seen at 144.70(23.6%fib), an upside break can trigger rise towards 145.63(Higher BB).On the downside, immediate support is seen at 142.80(38.2%fib), a break below could take the pair towards 141.44(50%fib).
Equities Recap
European stocks closed notably lower on Wednesday as investors continued to react to Wednesday's report from the U.S. Labor Department showing hotter-than-expected consumer prices inflation in the world's largest economy.
UK's benchmark FTSE 100 closed down by 1.47percent, Germany's Dax ended down by 1.21 percent, France’s CAC finished the day down by 0.37 percent.
Wall Street ended a directionless session higher on Wednesday as an on-target inflation report largely stanched the flow of Tuesday's sell-off and investors pressed the "pause" button.
Dow Jones closed up by 0.10 percent, S&P 500 closed up by 0.34 percent, Nasdaq was settled up up by 0.75 percent.
Treasuries Recap
Treasury yields rose further on Wednesday after producer price data, coupled with consumer prices the day before, show that inflation is becoming sticky and suggest the Federal Reserve will keep aggressively tightening monetary policy.
The yield on 10-year notes was up 0.1 basis point to 3.424% and was down 1.4 basis points to 3.494% on the 30-year bonds .
The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=RR was last at 2.672%.
Commodities Recap
Gold edged up on Wednesday as the dollar slipped, but expectations for steep rate hikes from the U.S. Federal Reserve took some sheen of the precious metal and capped its gains.
Spot gold rose 0.1% to $1,702.90 per ounce by 11:57 a.m. ET (1557 GMT) after marking its biggest one-day percentage decline since July 14 on Tuesday, driven by the dollar’s rally following a surprise rise in U.S. inflation.U.S. gold futures fell 0.2% to $1,713.30.
Oil edged up 1% on Wednesday as an international energy watchdog expects an increase in gas-to-oil switching due to high prices this winter, even though the outlook for demand remains gloomy.
Brent crude futures settled up 93 cents, or 1%, at $94.10a barrel, while U.S. West Texas Intermediate crude ended $1.17, or 1.3%, higher at $88.48.