Posted at 13 January 2022 / Categories Market Roundups
Market Roundup
•US Dec Real Earnings (MoM) 0.1%, -0.2% previous
•US Dec CPI Index, s.a 280.19, 278.88 previous
•US Dec Core CPI Index 284.76, 283.20 previous
•US Dec CPI (YoY) 7.0% ,7.0% forecast, 6.8% previous
•US Dec Core CPI (MoM) 0.6%,0.5% forecast, 0.5% previous
•US Dec Core CPI (YoY) 5.5%,5.4% forecast, 4.9% previous
•US Crude Oil Inventories -4.553M,-1.904M forecast, -2.144M previous
Looking Ahead - Economic Data (GMT)
• 05:20 Japan Dec PPI (MoM) 0.3% forecast, 0.6% previous
• 05:20 Japan Dec PPI (YoY) 8.8% forecast, 9.0% previous
• 05:20 Japan Foreign Bonds Buying -416.5B previous
• 06:00 Australia Home Loans (MoM) -4.1% previous
• 06:00 Australia Invest Housing Finance (MoM) 1.1% previous
•08:30 China Dec Imports (YoY) 26.3% forecast, 31.7% previous
•08:30 China Dec Exports (YoY) 20.0% forecast, 22.0% previous
•08:30 China Dec Trade Balance (USD) 74.50B forecast, 71.72B previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro firmed on Wednesday after the latest U.S. inflation data showed price pressures surging but within expectations, apparently suggesting the Federal Reserve will not have to hike interest rates too aggressively. Data showed the U.S. consumer price index leaping a whopping 7% in the 12 months through December, the biggest annual increase since June 1982.But it was within forecasts, which appeared to reassure investors. The dollar hit a two-year low on the inflation report, with the dollar index falling 0.666% to 94.97 against a basket of six major currencies. A struggling dollar lifted the euro up 0.66% to a near two-month high of $1.1443.Immediate resistance can be seen at 1.1430 (23.6% fib), an upside break can trigger rise towards 1.1463 (15th Nov high).On the downside, immediate support is seen at 1.386 (38.2% fib), a break below could take the pair towards 1.1357(50%fib).
GBP/USD: Sterling steadied on Wednesday within striking distance to its recent highs versus the dollar and the euro, as investors focused on possible rate increases from the Bank of England.The pound has strengthened recently as investors ramped up expectations of further rate rises while Britain’s focus on rolling out booster vaccinations rather than returning to coronavirus lockdown measures boosted risk sentiment. The pound was up against the dollar at $1.3685. Immediate resistance can be seen at 1.3715(23.6% fib), an upside break can trigger rise towards 1.3744 (Higher BB).On the downside, immediate support is seen at 1.3645(38.2%fib), a break below could take the pair towards 1.3585(50%fib).
USD/CAD: The Canadian dollar strengthened to its highest level in nearly two months against its U.S. counterpart on Wednesday as oil prices rose and investors took in stride data showing U.S. inflation rose strongly in December. The loonie was trading 0.4% higher at 1.2500 to the greenback, after touching its strongest intraday level since Nov. 16 at 1.2490. The price of oil, one of Canada's major exports, added to recent gains on tight supply and easing concerns about the potential hit to demand from the Omicron coronavirus variant. U.S. crude prices were up nearly 1% at $82.01 a barrel. Immediate resistance can be seen at 1.2547 (38.2%fib), an upside break can trigger rise towards 1.2579 (5DMA).On the downside, immediate support is seen at 1.2496 (50%fib), a break below could take the pair towards 1.2449(61.8%fib).
USD/JPY: The dollar declined against the Japanese yen on Wednesday after data showed an expected surge in U.S. consumer prices in December, fell short of offering any new impetus for the Federal Reserve's policy normalization efforts . U.S. consumer prices surged in December, with the annual increase in inflation the largest in nearly four decades, which could bolster expectations that the Federal Reserve will start raising interest rates as early as March. The consumer price index increased 0.5% last month after advancing 0.8% in November, the Labor Department said on Wednesday.Strong resistance can be seen at 114.81 (38.2%fib), an upside break can trigger rise towards 115.02(5DMA).On the downside, immediate support is seen at 114.34 (50%fib), a break below could take the pair towards 113.85(61.8%fib).
Equities Recap
European shares ended higher on Wednesday, supported by commodity-linked stocks which rose on hopes of more stimulus in major importer China, while easing bond yields took pressure off the technology sector.
UK's benchmark FTSE 100 closed up by 0.81 percent, Germany's Dax ended up by 0.43 percent, France’s CAC finished the day up by 0.75 percent.
U.S. stock indexes rose on Wednesday after data showed that while U.S. inflation was at its highest in decades, it largely met economists' expectations, cooling some fears that the Federal Reserve would have to pull back support even more forcibly than already expected.
Dow Jones closed down by 0.11% percent, S&P 500 closed up by 0.28% percent, Nasdaq settled up by 0.23% percent.
Treasuries Recap
Longer-dated U.S. Treasury yields dipped on Wednesday after a reading on inflation was largely in line with expectations and did not alter views on the path of Federal Reserve policy.
Benchmark 10-year yields dipped as more aggressive rate hikes are also seen as likely to dent growth and inflation longer-term. The yield had reached 1.808% on Monday, its highest since Jan. 21, 2020.
Commodities Recap
Oil prices hit two-month highs on Wednesday on tight supply as crude inventories in the United States, the world's top consumer, fell to their lowest since 2018, and as the dollar weakened and worries eased about the Omicron coronavirus variant.
U.S. crude inventories fell 4.6 million barrels last week to 413.3 million barrels, their lowest since October 2018
Gold firmed on Wednesday as data showing U.S. inflation was within expectations dented the dollar and prompted buying from investors who seemed to have priced in the Federal Reserve's likely interest rate hike trajectory.
Spot gold was last up 0.2% at $1,825.83 per ounce by 14:11 ET (1911 GMT), extending gains after rising the most since mid-December on Tuesday. U.S. gold futures settled up 0.5% at $1,827.3.