Posted at 26 January 2023 / Categories Market Roundups
Market Roundup
•Belgium jJan NBB Business Climate -13.5, -13.6 previous
•US EIA Weekly Distillates Stocks-0.507M,-1.121M forecast,-1.939M previous
•US EIA Weekly Refinery Utilization Rates (WoW) 0.8%, 1.2% forecast,1.2% previous
•US Gasoline Inventories 1.763M,1.767M forecast,3.483M previous
•US Heating Oil Stockpiles -0.234M,-0.260M previous
•US Distillate Fuel Production-0.009M, 0.057M previous
•US Cushing Crude Oil Inventories 4.267M, 3.646M previous
•US Crude Oil Inventories 0.533M,0.971M forecast,8.408M previous
Looking Ahead - Economic data (GMT)
•No data ahead
Looking Ahead - Economic events and other releases (GMT)
•No significant events ahaead
Currency Summaries
EUR/USD: The euro held near nine-month high against the dollar on Wednesday in subdued trading as investors looked towards the Federal Reserve's policy decision next week, Traders broadly expect the Fed to increase rates by 25 basis points (bps) next Wednesday, a step down from a 50 bps increase in December. Before that, investors will scrutinise U.S. fourth-quarter economic growth figures, due on Thursday. German business morale brightened in January, according to data on Wednesday, the latest sign that recession in Europe could be mild, or may not even materialise, echoing the tone of business activity surveys a day before. Immediate resistance can be seen at 1.0921(23.6%fib), an upside break can trigger rise towards 1.0963 (Higher BB).On the downside, immediate support is seen at 1.0830(9DMA), a break below could take the pair towards 1.0788(18th Jan low).
GBP/USD: Sterling initially dipped against the dollar on Wednesday after data showed producer price inflation in the county fell to its lowest rate in almost a year last month but rebounded on profit taking . In annual terms, output prices rose by 14.7% in December, its fifth consecutive slowing, and input price growth was 16.5%, its sixth straight slowdown from a record high of 24.6%.In November, output prices fell by a monthly 0.1% and rose by an annual 16.2% while input prices in November fell by 0.2% and rose by 18.0% respectively, the ONS said.The declines come after data on Wednesday showing Britain’s manufacturers unexpectedly reduced their prices in December by the most since April 2020.Immediate resistance can be seen at 1.2387(23.6%fib), an upside break can trigger rise towards 1.2471(Higher BB).On the downside, immediate support is seen at 1.2292(11DMA), a break below could take the pair towards 1.2186 (Jan 17th low).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Wednesday as the Bank of Canada raised interest rates as expected in a move that could mark the end of the central bank’s aggressive tightening campaign. The BoC hiked its key interest rate by 25 basis points to 4.5%, the highest level in 15 years, and became the first major central bank fighting global inflation to say it would likely hold off on further increases for now. The price of oil, one of Canada’s major exports, steadied after a smaller than expected build in U.S. crude inventories. U.S. crude oil futures settled 2 cents higher at $80.15 a barrel. The loonie was down 0.1% at 1.3385 to the greenback, or 74.71 U.S. cents, after trading in a range of 1.3341 to 1.3428. Immediate resistance can be seen at 1.2901 (23.6%fib), an upside break can trigger rise towards 1.2950 (Higher BB).On the downside, immediate support is seen at 1.2803 (38.2%fib), a break below could take the pair towards 1.2705 (5 DMA).
USD/JPY: The dollar dipped against yen on Wednesday as investors squared positions ahead of U.S. fourth-quarter economic growth figures. The U.S. Commerce Department is expected to unveil its initial advance fourth-quarter GDP estimates on Thursday, which could set the tone for the Federal Reserve’s Jan. 31-Feb. 1 policy meeting. Traders expect the Fed to scale back its rate hike pace further after slowing its policy tightening spree to 50 bps last month after four straight 75-bp hikes. Strong resistance can be seen at 130.44(Daily high), an upside break can trigger rise towards 131.00 (38.2%fib).On the downside, immediate support is seen at 129.40 (11DMA), a break below could take the pair towards 128.74 (23.6%fib).
Equities Recap
European stocks slipped on Wednesday as lacklustre results from U.S. software giant Microsoft fanned fears about the outlook for the tech sector, while investors remained concerned that central banks were not yet close to pausing their interest rate hikes.
UK's benchmark FTSE 100 closed down by 0.16 percent, Germany's Dax ended down by 0.08 percent, France’s CAC finished the day down by 0.09 percent.
The S&P 500 ended nominally lower on Wednesday as a string of corporate earnings ran the gamut from downbeat to dismal, reviving worries over the economic impact of the U.S. Federal Reserve's restrictive policy.
Dow Jones closed down by 0.03% percent, S&P 500 closed down by 0.02 % percent, Nasdaq settled down by 0.18% percent.
Treasuries Recap
U.S. Treasury yields inched down on Wednesday, reflecting concerns about an economic slowdown ahead of the Federal Reserve's interest rate-setting meeting next week.
Benchmark 10-year government bond yields US10YT=RR declined marginally, about one basis point, to 3.458% on Wednesday, and two-year note yields US2YT=RR - slid to 4.137%.
Commodities Recap
Gold reversed course to edge up on Wednesday as the dollar weakened and investors kept a close eye on a slew of upcoming U.S. economic data that could influence the Federal Reserve monetary policy meeting next week.
Spot gold rose 0.2% to $1,940.49 per ounce by 1:40 p.m. ET (1840 GMT). U.S. gold futures settled up 0.4% to $1,942.6.
Oil prices settled largely unchanged on Wednesday after government data showed a smaller-than-anticipated build in U.S. crude inventories, countering weak economic data from Tuesday.
Brent crude futures settled at $86.12 a barrel, down a cent, while the U.S. West Texas Intermediate (WTI) crude futures settled at $80.15 a barrel, up by 2 cents.