Posted at 21 March 2023 / Categories Market Roundups
Market Roundup
•Fed expected to lift rates by 25 basis points on Wednesday
•Markets split on a BoE hike or pause on Thursday
•Yellen says U.S. ready to protect small bank depositors
•Canada Feb Core CPI (MoM) 0.5% ,0.3% previous
•Canada Feb Core CPI (YoY) 4.7%, 4.8%,5.0% previous
•Canada Feb CPI (YoY) 5.2% ,5.4% forecast,5.9% previous
•Canada Feb CPI (MoM) 0.4% ,0.5% forecast,0.5% previous
•Canada Feb Common CPI (YoY) 6.4% ,6.5% forecast,6.6% previous
•Canada Feb Median CPI (YoY) 4.9% ,4.8% forecast,5.0% previous
•Canada Feb Trimmed CPI (YoY) 4.8% ,4.9% forecast,5.1% previous
•US Redbook (YoY) 3.2%,2.6% previous
•US Feb Existing Home Sales (MoM) 14.5%, 5.0% forecast,-0.7% previous
•US Existing Home Sales 4.58M, 4.19M forecast,4.00M previous
•New Zealand GlobalDairyTrade Price Index -0.7% previous
Looking Ahead Economic Data(GMT)
•00:00 Australia MI Leading Index (MoM) -0.1% previous
Looking Ahead Eevents and Other Releases(GMT)
•No events ahead
Currency Summaries
EUR/USD: The euro gained on Tuesday as investors turned their attention from the banking crisis to the U.S. Federal Reserve's interest rate decision. Investors awaited the outcome of a key Federal Reserve meeting, markets are pricing in an 85% chance of a 25-basis-point rate hike when the Fed announces its monetary policy decision on Wednesday. The peak for the Fed's benchmark overnight interest rate was seen at 5.5% only a few weeks ago, against about 4.8% now. The euro last was up 0.39% to $1.0761 pulling back from daily low .Immediate resistance can be seen at 1.0797 (23.6%fib), an upside break can trigger rise towards 1.0827(Higher BB).On the downside, immediate support is seen at 1.0713(38.2%fib), a break below could take the pair towards 1.0669(5DMA).
GBP/USD: Sterling eased against the dollar on Tuesday as traders reckoned banking stress would keep the Federal Reserve and the Bank of England from hiking rates much further, or at all, later in the week. Investors remained concerned over the fate of the banking sector after U.S. lender First Republic shares tumbled nearly 50% on Monday on fears it will need a second rescue. With UK inflation data on Wednesday expected to show some easing and amid the global financial market instability, money markets are now pricing in a 50% chance of no interest rate hike by the BoE on Thursday and the same chance of a 25 basis-point increase. Sterling fell 0.35% to $1.2217. Immediate resistance can be seen at 1.2305 (23.6%fib), an upside break can trigger rise towards 1.2338(Higher BB).On the downside, immediate support is seen at 1.2216(38.2%fib), a break below could take the pair towards 1.2173(5DMA).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from an earlier two-week high, as domestic inflation data supported the Bank of Canada's recent decision to pause its interest rate hiking campaign. Canada’s annual inflation rate slowed more than expected to 5.2% in February, its lowest level in 13 months, benefiting from a comparison to last year's strong price increase. The BoC left its benchmark interest rate on hold at 4.50% earlier this month, becoming the first major central bank to move to the sidelines. The Canadian dollar was trading down 0.4% at 1.3725 to the U.S. currency. Immediate resistance can be seen at 1.3724 (23.6%fib), an upside break can trigger rise towards 1.3769 (March 17th high).On the downside, immediate support is seen at 1.3679 (21DMA), a break below could take the pair towards 1.3640(38.2%fib).
USD/JPY: The dollar strengthened against yen on Tuesday as investors awaited the outcome of a key Federal Reserve meeting. All eyes are on the Fed policy decision on Wednesday, with some top central bank watchers saying it could pause further rate hikes. Markets are pricing in an 13.6% chance the Fed will stand pat and an 86.4% likelihood of a 25-basis-point hike, according to the CME FedWatch tool. Data on Tuesday showed that U.S. existing home sales rebounded more than expected in February as lower mortgage rates and the first year-on-year decrease in prices in 11 years pulled buyers back into the market. Strong resistance can be seen at 132.58(5DMA), an upside break can trigger rise towards 133.02 (38.2%fib).On the downside, immediate support is seen at 130.66(23.6%fib), a break below could take the pair towards 12976(Feb 10th low).
Equities Recap
European stocks rose more than 1% on Tuesday, with bank shares leading the way after a series of measures to stabilize the sector, while investors hoped for less-aggressive moves by the U.S. Federal Reserve at its policy meeting this week.
UK's benchmark FTSE 100 closed up by 1.79 percent, Germany's Dax ended up by 1.75 percent, France’s CAC finished the day up by 1.42 percent.
Wall Street closed higher on Tuesday as widespread liquidity concerns in the banking sector eased and market participants turned their attention to the Federal Reserve, which is expected concludeits important meeting with a 25-point hike in interest rates.
Dow Jones closed up by 0.98% percent, S&P 500 closed up by 1.30 % percent, Nasdaq settled up down by 1.58% percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday as improved risk sentiment dampened safe-haven demand for U.S. debt before the Federal Reserve wraps up its two-day meeting on Wednesday.
Benchmark 10-year Treasury yields have risen from a six-month low of 3.291% reached on Monday but remain well below their 15-year peak of 4.338% reached on Oct. 21.
Commodities Recap
Gold fell about 2% on Tuesday as soaring Treasury yields and easing banking-crisis concerns sent some cautious investors back to riskier assets ahead of interest rate decision by the US Federal Reserve.
Spot gold dipped 2.1% to $1,938.19 per ounce by 1:31 p.m. EDT (1731 GMT). U.S. gold futures , too, fell 2.1% to settle at $1,941.10. The precious metal hit $2,009.59 on Monday.
Oil prices rose more than 2% on Tuesday, extending gains from 15-month lows hit the previous day, as Credit Suisse bailout eased fears that banking crisis would hurt economic growth and reduce fuel demand.
Brent crude settled up $1.53, or 2.1%, at $69.33 a barrel, while U.S. West Texas Intermediate (WTI) closed up $1.69, or 2.5% to $69.33.