Posted at 04 January 2023 / Categories Market Roundups
Market Roundup
•Job openings fall less than expected
•US indexes up: Dow 0.4%, S&P 0.75%, Nasdaq 0.69%
•U.S. manufacturing contracts, prices decline in Dec -ISM
•China COVID data shows under-reported deaths, WHO says
•US Redbook (YoY) 10.2%,9.6% previous
•US Dec ISM Manufacturing New Orders Index 45.2, 47.2 previous
•US Dec ISM Manufacturing Prices 39.4, 42.6 forecast,43.0 previous
•US Nov JOLTs Job Openings 10.458M ,10.000M forecast,10.334M previous
•US Dec ISM Manufacturing PMI 48.4, 48.5 forecast,49.0 previous
•US ISM Dec Manufacturing Employment 51.4, 48.3 forecast,48.4 previous
Looking Ahead - Economic Data (GMT)
•23:50 Japan Monetary Base (YoY) -3.2% forecast, -6.4% previous
•01:45 China Dec Caixin Services PMI 46.7 previous
•03:35 Japan 10-Year JGB Auction 0.250% previous
•05:00 Japan Dec Household Confidence 28.6 previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro steadied against dollar on Wednesday as single currency got lift from a raft of data that suggested European inflation may finally have peaked. Data on Wednesday showed French consumer price pressures cooled by a lot more than expected in December, while the previous day, German data also showed inflation fell significantly more than forecast. This came hot on the heels of Spanish inflation data last week that painted a similar picture. The euro, which on Tuesday posted its largest one-day drop against the dollar in two months, zipped up by as much as 0.82%, as traders latched on to the idea that softer inflation might mean a change in pace from the European Central Bank. Immediate resistance can be seen at 1.0616(11DMA), an upside break can trigger rise towards 1.0695(23.6%fib).On the downside, immediate support is seen at 1.0519(38.2%fib), a break below could take the pair towards 1.0453(Dec 7th low).
GBP/USD: Sterling rose against a weakening dollar on Wednesday as a relaxation of COVID rules in China sent investors bidding for risky currencies.Chinese state media played down the severity of a surge of COVID-19 infections on Tuesday, triggering hopes that a post-pandemic recovery in China would support the global economy. Sterling rose 0.75% to $1.2057 after falling more than 1% on Tuesday to $1.1900, its lowest since end-November. Immediate resistance can be seen at 1.2079(11DMA), an upside break can trigger rise towards 1.2238(23.6%fib),On the downside, immediate support is seen at 1.1900(38.2% fib), a break below could take the pair towards 1.1826 (22nd Nov).
USD/CAD: The Canadian dollar strengthened to its highest level in nearly one month against its U.S. counterpart on Wednesday as investors cheered moves by China to stimulate its economy and signs that central banks are making progress against inflation.Canada is a major exporter of commodities, including oil, so the loonie tends to be sensitive to global economic prospects. Gains for the loonie came despite oil tumbling for a second day. U.S. crude oil futures settled 5.3% lower at $72.84 a barrel. The Canadian dollar was trading 1.4% higher at 1.3480 to the greenback, or 74.18 U.S. cents, its largest advance since Nov. 10. It touched its strongest intraday level since Dec. 5 at 1.3477.Immediate resistance can be seen at 1.3549 (50%fib), an upside break can trigger rise towards 1.3596 (20DMAB).On the downside, immediate support is seen at 1.3467 (38.2%fib), a break below could take the pair towards 1.3384 (23.6%fib).
USD/JPY: The dollar steadied against Japanese yen on Wednesday after minutes from the Federal Reserve’s December meeting offered no surprises or new information about the size of its expected rate hike in February. The Fed hiked rates by 50 basis points last month and Fed officials agreed a slower pace of interest rate increases would allow them to continue increasing the cost of credit to control inflation in a gradual way meant to limit the risks to economic growth. The dollar index against a basket of currencies was last down 0.47% at 104.22, after reaching a two-week high of 104.86 on Tuesday. Strong resistance can be seen at 131.41(5DMA), an upside break can trigger rise towards 132.70(38.2%fib).On the downside, immediate support is seen at 130.33(23.6%fib), a break below could take the pair towards 129.31(Lower BB).
Equities Recap
European stocks closed on a buoyant note on Wednesday as easing concerns about inflation triggered hectic buying at several counters from across various sectors.
UK's benchmark FTSE 100 closed up by 0.41 percent, Germany's Dax ended down by 2.18 percent, France’s CAC finished the day up by 2.30 percent.
The S&P 500 finished higher on Wednesday but below its session peak after volatile trading following the release of minutes from the Federal Reserve's last meeting, which showed officials laser-focused on controlling inflation even as they agreed to slow their interest rate hiking pace.
Dow Jones closed up by 0.40 percent, S&P 500 ended up by 0.75 percent, Nasdaq finished up by 0.69 percent.
Treasuries Recap
The benchmark U.S. 10-year Treasury yield fell on Wednesday, putting it on track for its longest streak of declines in more than five months after the release of the minutes from the most recent meeting of the Federal Reserve.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 3.3 basis points at 4.372%.
The 10-year TIPS breakeven rate was last at 2.226%, indicating the market sees inflation averaging 2.2% a year for the next decade.
Commodities Recap
Gold held near seven-month highs reached on Wednesday after the minutes of the Federal Reserve's last meeting showed all its policymakers remained committed to fighting inflation, but agreed on the need to slow rate hikes in 2023.
Spot gold rose 0.7% to $1,851.41 per ounce by 2:48 p.m. ET (1948 GMT), having risen as much as 1.4% earlier to its highest price since June 13.U.S. gold futures settled up 0.7% at $1,859.
Oil fell by more than $4 a barrel on Wednesday, posting the steepest percentage loss in the first two trading days of any year for over 3 decades, as investors worried about fuel demand as the global economy slows and COVID-19 cases grow in China.
Brent futures settled at $77.84 a barrel, falling $4.26, or 5.2%. U.S. crude settled at $72.84 a barrel, shedding $4.09, or 5.3%.