Posted at 17 December 2022 / Categories Market Roundups
Market Roundup
•U.S. business activity slumps in December
•Dow down 0.85%, S&P 500 down 1.11%, Nasdaq down 0.97%
•Oil benchmarks settle over 2% lower but gain on weekly basis
•Hawkish central banks spark recession woes
•Fed may raise rates higher than own forecast -Fed's Williams
•BoJ to decide policy rates on Tuesday
•Canada Oct Foreign Securities Purchases 8.46B,-22.27B previous
•Canada Oct Foreign Securities Purchases by Canadians -1.67B, 9.56B previous
•Canada New Housing Price Index (MoM) -0.2% ,-0.2% previous
•Canada Oct Wholesale Sales (MoM) 2.1%,1.3% forecast,0.1% previous
•US Dec Manufacturing PMI 47.7 forecast, 47.7 previous
•US Dec Services PMI 44.4, 46.8 forecast, 46.2 previous
•US Dec S&P Global Composite PMI 44.6, 47.0 forecast,46.4 previous
•US U.S. Baker Hughes Oil Rig Count 620, 625 previous
• U.S. Baker Hughes Total Rig Count 776,780 previous
Looking Ahead - Economic Data (GMT )
•No data ahead
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro declined on Friday came under fresh selling pressure as hawkish tone from central bankers and weak data stoked recession fears. The Federal Reserve, the Bank of England, the European Central Bank, and the Swiss National Bank, all raised their lending rates this week, and also signaled further policy tightening in the coming months to fight inflation. Markets digested the latest batch of economic data from Europe. Concerns about a surge in Covid cases in China, and geopolitical tensions weighed as well. The euro slipped 0.3% to $1.0595 against the dollar. Immediate resistance can be seen at 1.0661(23.6%fib), an upside break can trigger rise towards 1.0718(Higher BB).On the downside, immediate support is seen at 1.0569(5DMA), a break below could take the pair towards 1.0487(38.2%fib).
GBP/USD: The pound fell on Friday against the U.S. dollar, setting it on track for its biggest weekly declines against the two currencies since early November after a raft of central bank interest rate hikes.The Bank of England (BoE) delivered an expected half-percentage-point increase in interest rates on Thursday, its ninth in a row. But while the BoE was taking the view that inflation has now peaked, other central banks flagged they are far from finished with rate hikes. Sterling fell 0.2% to $1.2134 against the dolla. Immediate resistance can be seen at 1.2457( 23.6%fib), an upside break can trigger rise towards 1.2520(Higher BB).On the downside, immediate support is seen at 1.2062 (38.2%fib),a break below could take the pair towards 1.2000 (Psychological level).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Friday as a decline in investor risk appetite, after a flurry of central bank interest rate hikes this week, offset stronger-than-expected domestic wholesale trade data. Canadian wholesale trade increased by 2.1% in October from September, beating estimates for a 1.3% gain. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to shifts in investor sentiment. U.S. crude prices were trading 2.9% lower at $73.93 a barrel. The loonie was down 0.1% at 1.3675 to the greenback, or 73.13 U.S. cents, after trading in a range of 1.3618 to 1.3687. For the week, it was on track to decline 0.2%.Immediate resistance can be seen at 1.3713(23.6%fib), an upside break can trigger rise towards 1.3756(Higher BB).On the downside, immediate support is seen at 1.3637(5DMA), a break below could take the pair towards 1.3578 (38.2%fib).
USD/JPY: The dollar dipped against Japanese yen on Friday as investors grappled with the prospect that borrowing costs still have a long way to climb. On the data front,U.S. business activity shrank further in December as new orders slumped to their lowest in more than 2-1/2 years, while softening demand helped to significantly cool inflation.S&P Global said on Friday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 44.6 this month from a final reading of 46.4 in November.The Bank of Japan decides policy on Tuesday, and while no change is expected at that meeting, some market participants have begun betting on some tweaks to stimulus as Governor Haruhiko Kuroda prepares to depart in April. Strong resistance can be seen at 138.17(38.2%fib), an upside break can trigger rise towards 139.10(30DMA).On the downside, immediate support is seen at 136.31(Daily low), a break below could take the pair towards 135.60(23.6%fib).
Equities Recap
European markets closed lower on Friday, extending recent losses, as fears of a global economic recession amid surging interest rates continued to hurt sentiment, prompting investors to refrain from picking up stocks.
UK's benchmark FTSE 100 closed down by 1.27 percent, Germany's Dax ended down by 0.67 percent, France’s CAC finished the day down by 1.08 percent.
U.S. stocks dropped for a third straight session and suffered a second straight week of losses on Friday as fears continued to mount that the Federal Reserve's campaign to arrest inflation would tilt the economy into a recession.
Dow Jones closed down by 0.83 percent, S&P 500 closed down by 1.11 percent, Nasdaq settled down by 0.87 % percent.
Commodities Recap
Gold was set for its biggest weekly decline since mid-November despite a recovery on Friday, after the U.S. Federal Reserve indicated more interest rate hikes were needed to curb inflation.
Spot gold rose 0.8% to $1,791.59 per ounce by 1:50 p.m. ET (1850 GMT), but has lost about 0.3% this week.U.S. gold futures settled 0.7% higher at $1,800.20.
Oil fell by more than $2 per barrel on Friday, swept up in a wider rout in global equities on fears of a looming recession, after central banks across Europe and North America signalled they will continue to battle inflation aggressively.
Brent crude futures settled at $79.04 per barrel, down $2.17 or 2.4%, while West Texas Intermediate futures fell by $1.82, or 2.4%, to settle at $74.29 per barrel.