Posted at 22 February 2023 / Categories Market Roundups
Market Roundup
•Fed minutes say almost all agreed to 0.25% hike last time
•S&P drops for fourth straight session, worst run since mid-Dec
•US Indexes: Dow slips 0.26%, S&P down 0.16%, Nasdaq gains 0.13%
•Canada Jan New Housing Price Index (MoM) -0.2%, 0.1% forecast,0.0% previous
•US Redbook (YoY) 5.3%,4.9% previous
•Belgium Feb NBB Business Climate -12.8, -12.0 forecast,-13.5 previous
•US 5-Year Note Auction 4.109%, 3.530% previous
Looking Ahead Economic Data(GMT)
•00:30 Australia Plant/Machinery Capital Expenditure (QoQ) (Q4) -1.6% previous
•00:30 Australia Private New Capital Expenditure (QoQ) (Q4) 1.3% forecast, -0.6% previous
•00:30 Australia Building Capital Expenditure (MoM) (Q4) 0.5% previous
Looking ahead Events and Other Releases(GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro declined on Wednesday as dollar strengthened after U.S. Federal Reserve meeting minutes showed policymakers are determined to use a slower pace of interest-rate hikes to tame persistently high inflation. The minutes from the Fed's Jan. 31 to Feb. 1 meeting said most of the officials supported the quarter-point increase because a slower pace "would better allow them to assess the economy's progress" toward reducing inflation to their 2% target. But "a few" participants outright favored a larger 50- bps increase at the meeting. The Fed's target range stands at 4.5% to 4.75%, having risen rapidly from 0% to 0.25% in March 2022. But Fed funds futures traders are now pricing the fed funds rate to reach 5.38% in July.Immediate resistance can be seen at 1.0647(5DMA), an upside break can trigger rise towards 1.0806(23.6%fib).On the downside, immediate support is seen at 1.0578(38.2%fib), a break below could take the pair towards 1.0550(Lower BB).
GBP/USD: Sterling retreated on Wednesday, after surging on the back of stronger-than expected British business activity, as traders awaited consumer confidence data and focused on Britain’s political headaches . Data showed on Tuesday an unexpected bounce in Britain’s preliminary “flash” S&P Global/CIPS UK Composite Purchasing Managers’ Index, boosting speculation the country might avoid a long recession and bets the Bank of England (BoE) might keep rates higher for longer. After strengthening 0.6% against the dollar on Tuesday, sterling was down 0.24% to $1.2083 at 1151 GMT. Immediate resistance can be seen at 1.2158 (23.6%fib), an upside break can trigger rise towards 1.2263(Feb 14th high).On the downside, immediate support is seen at 1.2037 (5DMA), a break below could take the pair towards 1.1977(38.2%fib).
USD/CAD: The Canadian dollar on Wednesday weakened to a near seven-week low against its U.S. counterpart as the recent rise in global borrowing costs made the currency less attractive to investors. Canadian new home prices fell 0.2% in January from December, while the annual rate of increase slowed to 2.7%, adding to evidence of a slowdown in Canada’s once red-hot housing market. The price of oil, one of Canada’s major exports, settled 3.2% lower at $73.95 per barrel as the prospect of higher U.S. interest rates stoked concerns about fuel demand.The loonie was trading nearly 0.2% lower at 1.3561 to the greenback , after touching its weakest level since Jan. 6 at 1.3568. Immediate resistance can be seen at 1.3564 (23.6% fib), an upside break can trigger rise towards 1.3590 (Higher BB).On the downside, immediate support is seen at 1.3511 (5DMA), a break below could take the pair towards 1.3500(38.2% fib).
USD/JPY: The dollar cut losses against yen on Wednesday after Fed minutes failed to dent hawkish Fed expectations. Minutes from the Federal Reserve's Jan. 31-Feb. 1 meeting said that "almost all" Fed officials agreed to slow the pace of increases in interest rates to a quarter of a percentage point.Earlier in the day, St. Louis Fed President James Bullard said the U.S. central bank needs to get inflation toward its 2% goal this year to avoid its prolonged impact. Against the yen, the dollar cut losses to trade little changed on the day at 134.95 . Strong resistance can be seen at 135.36(38.2%fib), an upside break can trigger rise towards 136.21 (Higher BB).On the downside, immediate support is seen at 134.27(5DMA), a break below could take the pair towards 132.91(23.6%fib)
Equities Recap
European shares dropped on Wednesday as upbeat economic data spurred fears that interest rates could stay higher for longer.
UK's benchmark FTSE 100 closed down by 0.59 percent, Germany's Dax ended down by 0.01 percent, France’s CAC finished the day down by 0.13 percent.
The S&P 500 extended its losing streak to four sessions as Wall Street ended broadly lower on Wednesday, with investors cautious despite the latest guidance on rate policy from the U.S. central bank showing few surprises..
Dow Jones closed down by 0.26% percent, S&P 500 closed down by 0.16 % percent, Nasdaq settled up by 0.13% percent.
Treasuries Recap
U.S. Treasury yields fell on Wednesday after surging to three-month highs on Tuesday ahead of the release of the Federal Reserve minutes later in the session, with bond investors still expecting yields to go higher amid a spate of strong economic data.
U.S. 10-year yields hit new three-month highs earlier on Wednesday, before coming down to trade 4.7 basis points lower at 3.915%. U.S. two-year yields, which reflect interest rate expectations, were also down on the day at 4.666%, after hitting three-month peaks in the previous session.
Commodities Recap
Gold prices fell on Wednesday as the dollar rose after minutes from the U.S. Federal Reserve’s latest policy meeting showed policymakers backed more interest rate hikes to tame inflation.
Spot gold was down 0.5% at $1,825.60 per ounce, as of 02:32 p.m. EST (1932 GMT).U.S. gold futures settled 0.1% lower at $1,841.50 per ounce.
Oil prices fell by $2 per barrel to their lowest in two weeks on Wednesday, as investors became more concerned that recent data will prompt more aggressive interest rate increases by central banks, pressuring economic growth and fuel demand.
Brent crude futures settled $2.45, or 3%, lower at $80.60 per barrel. West Texas Intermediate crude futures (WTI) dropped $2.41, or 3%, to end at $74.05 a barrel.