Posted at 27 December 2023 / Categories Market Roundups
Market Roundup
•Finnish Dec Consumer Confidence -13.3, -12.4 previous
•Finnish Dec Finnish Industrial Confidence -20, -21 previous
•Swiss Dec ZEW Expectations -23.7, -29.6 previous
Looking Ahead Economic Data (GMT)
•13:55 US Redbook (YoY) 3.6% previous
•13:55 French 3-Months BTF Auction 3.729% previous
•13:55 French 6-Months BTF Auction 3.690% previous
•13:55 French French 12-Month BTF Auction 3.333% previous
•15:00 US Dec Richmond Services Index 1 previous
•15:00 US Dec Richmond Manufacturing Index -7 forecast,-5 previous
•15:00 US Dec Richmond Manufacturing Shipments -8 previous
•15:00 US Dec Dallas Fed Services Revenues -2.4 previous
•15:00 US Dec Texas Services Sector Outlook -11.6 previous
Looking Ahead Events And Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD: The euro reached a four-month high against dollar on Wednesday amid anticipation that the Federal Reserve might reduce interest rates soon, although restrained year-end trading volumes constrained market dynamics. Market pricing now shows a more than 80% chance the Fed is likely to begin cutting rates next March, according to the CME FedWatch tool, with over 150 basis points of easing priced in for all of 2024 .The euro was up 0.1% at $1.1053, having touched a four-month high of $1.1055. The single currency is up nearly 3% in the year and is on course for a third straight month of gains, matching the run it had last year. Immediate resistance can be seen at 1.1073(23.6%fib), an upside break can trigger rise towards 1.1095(Higher BB).On the downside, immediate support is seen at 1.1027(Daily low), a break below could take the pair towards 1.1000(Psychological level).
GBP/USD: The pound was little changed in subdued trading on Wednesday but remained on track to be one of the best performing currencies in 2023. Investors expect that the Bank of England will not be able to cut interest rates as much as the Federal Reserve and European Central Bank, given that inflation is running higher in the UK.That has widened the gap between British bond yields and those in the U.S. and Europe, making them look more attractive and boosting the pound. The pound has climbed more than 4% against the dollar over the last three months and is on track to finish the year around 5% higher.Immediate resistance can be seen at 1.2753(23.6%fib), an upside break can trigger rise towards 1.2794(Dec 15th high ).On the downside, immediate support is seen at 1.2688(5DMA), a break below could take the pair towards 1.2657(38.2%fib).
USD/CHF: The U.S. dollar declined against Swiss franc on Wednesday on market expectations the Federal Reserve will start cutting interest rates in the first quarter of 2024. A report from the U.S. Commerce Department on Friday showed underlying inflation pressures continuing to subside. The cooler U.S. inflation data ascertained analyst expectations of a rate cut by the Fed in March, with traders now pricing in about an 80% chance, according to the CME FedWatch tool. The dollar index , which tracks the greenback against six other major currencies, eased less than 0.1% on Wednesday to 101.42.Immediate resistance can be seen at 0.8591(38.2%fib), an upside break can trigger rise towards 0.8597 (5DMA).On the downside, immediate support is seen at 0.8513(23.6%fib), a break below could take the pair towards 0.8500(Psychological level)
USD/JPY: The dollar strengthened versus the yen on Wednesday amid expectations that Bank of Japan will soon exit its ultra-loose policy. A summary of opinions at the central bank's Dec. 18-19 meeting showed that BOJ policymakers saw the need to maintain its ultra-easy monetary policy for now, with some calling for a deeper debate on a future exit from massive stimulus. Trading volumes were thin, with many market participants still off for the holidays and next to no economic data releases scheduled. The Japanese yen weakened 0.1% to 142.52 per dollar and is headed for an 8% drop in the year. Strong resistance can be seen at 142.92(38.2%fib),an upside break can trigger rise towards 143.43(11DMA).On the downside, immediate support is seen 141.81(23.6%fib)a break below could take the pair towards 141.00(Psychological level).
Equities Recap
European shares rose on Wednesday, with tech firms benefiting from an overnight Wall Street surge on continued optimism about interest rate cuts as early as next March, and miners benefiting from strong China data.
At (GMT 12:42 ) UK's benchmark FTSE 100 was up by 0.56 percent, Germany's Dax was up by 0.24 percent, France’s CAC was down by 0.56 percent.
Commodities Recap
Gold prices crept up on Wednesday, hovering near their highest in almost three weeks, on market expectations the Federal Reserve will start cutting interest rates in the first quarter of 2024.
Spot gold was up nearly 0.1% at $2,068.59 per ounce, as of 0934 GMT, and was on track to mark an over 13% gain this year - its best since 2020.
Oil prices fell slightly on Wednesday, eating into the previous day's gains as investors monitored developments in the Red Sea.
Brent crude futures were down 53 cents, or 0.65%, at $80.54 a barrel by 1141 GMT. U.S. West Texas Intermediate crude lost 62 cents, or 0.82%, to $74.95.