Posted at 12 January 2024 / Categories Market Roundups
Market Roundup
•U.S. PPI data due at 1330 GMT
•UK Nov Manufacturing Production (MoM) 0.4%, 0.3% forecast,-1.1% previous
•UK Nov Construction Output (MoM) -0.2%,0.4% forecast,-0.5% previous
•UK Nov Construction Output (YoY) 0.9%,1.3% forecast,1.1% previous
•UK Nov Monthly GDP 3M/3M Change -0.2%,-0.1% forecast,0.0% previous
•UK Nov GDP (MoM) 0.3%,0.2% forecast,-0.3% previous
•UK Nov GDP (YoY) 0.2%,0.2% forecast,0.3% previous
•UK Nov Manufacturing Production (YoY) 1.3%,1.7% forecast,0.8% previous
•UK Nov Industrial Production (YoY) -0.1%,0.7% forecast,0.4% previous
•UK Nov Industrial Production (MoM) 0.3%,0.3% forecast,-0.8% previous
•UK Nov Trade Balance -14.19B, -15.70B forecast,-17.03B previous
•UK Nov Trade Balance Non-EU -2.84B, -4.83B previous
•France Dec CPI (MoM) 0.10%, 0.10% previous
• French Nov Consumer Spending (MoM)0.7%, -0.1% forecast, -0.9% previous
• French Dec Inflation (YoY) 3.60%,3.30% previous
• French Dec CPI (YoY) 3.70%,3.70% previous
• French Dec CPI (MoM) 0.1%,0.1% forecast,-0.2% previous
Looking Ahead Economic Data(GMT)
•13:30 US Dec Core PPI (YoY) 1.9% forecast,2.0% previous
•13:30 US Dec PPI (MoM) 0.1% forecast,0.0% previous
•13:30 US Dec Core PPI (MoM) 0.2% forecast,0.0% previous
•13:30 US Dec PPI (YoY) 1.3% forecast,0.9% previous
•13:30 US Dec PPI ex. Food/Energy/Transport (MoM) 0.1% previous
•13:30 US PPI ex. Food/Energy/Transport (YoY) 2.5% previous
•18:00 U.S. Baker Hughes Oil Rig Count 501 previous
•18:00 U.S. Baker Hughes Total Rig Count 621 previous
Looking Ahead Events And Other Releases(GMT)
•15:00 US FOMC Member Kashkari Speaks
Currency Forecast
EUR/USD: The euro declined on Friday as better than expected U.S. consumer prices data supported greenback.U.S. consumer prices increased in December as rents continued to rise, edging 0.3% higher for the month and up an annual 3.4%, versus economists' forecast for a 0.2% and 3.2% rise respectively. The dollar climbed after the data but ended Thursday roughly flat.Traders are pricing in a 68% chance for the Fed's first 25 basis-point cut to come in March, according to the CME Group's FedWatch Tool, up from 65% on Thursday despite the stronger inflation figures. The euro was down 0.2% at $1.0949 on Friday. It has fallen around 0.8% so far in 2024 after rising 3% last year. Immediate resistance can be seen at 1.1000(23.6%fib), an upside break can trigger rise towards 1.1038(Jan 2nd high).On the downside, immediate support is seen at 1.0910(38.2%fib), a break below could take the pair towards 1.0878(5th Jan low).
GBP/USD: The British pound declined against the dollar on Friday as stronger dollar weighed on pound despite upbeat UK GDP data. Britain's economy grew 0.3% month-on-month in November, more than the 0.2% expected by economists, after shrinking 0.3% in October. Yet output shrank 0.2% in the three months to the end of November. The pound has benefited in recent months from UK inflation running hotter than the U.S. and Europe. That's caused traders to expect fewer rate cuts from the Bank of England than its two major peers, supporting British bond yields and making sterling look relatively more attractive.Traders currently expect around 125 basis points of interest rate cuts from the BoE next year, according to money market pricing. The pound was down 0.25% at $1.2727. Immediate resistance can be seen at 1.2804(23.6%fib), an upside break can trigger rise towards 1.2821(Higher BB).On the downside, immediate support is seen at 1.2719 (Daily low), a break below could take the pair towards 1.2683(38.2%fib).
USD/CHF: The U.S. dollar steadied against Swiss franc on Friday as stronger than expected US CPI data supported greenback. The consumer price index (CPI) rose 0.3% last month after nudging up 0.1% in November, the Labor Department's Bureau of Labor Statistics said. The cost of shelter, which includes rents, hotel and motel stays as well as school housing, accounted for more than half of the increase in the CPI. Fed officials signalled inadequate progress on inflation to start cutting rates in March. But traders still see a 71.4% probability of a March cut, according to the CME Fedwatch tool.Markets now await U.S. producer prices data, due at 1330 GMT . Immediate resistance can be seen at 0.8557(38.2%fib), an upside break can trigger rise towards 0.8608(23.6%fib ).On the downside, immediate support is seen at 0.8508(50%fib), a break below could take the pair towards 0.8459(61.8%fib)
USD/JPY: The dollar strengthened against the yen on Friday as stronger than expected U.S. inflation data boosted dollar. Overnight, data from the United States showed consumer prices rose more than expected in December, suggesting the Fed may need to maintain high interest rates for a longer period, however the market continues to expect a rate cut soon, according to CME FedWatch tool.The tool showed a 73% chance of a rate cut in March as of 0422 GMT, compared to a near 66% chance at the beginning of the week. The U.S. dollar index , which tracks the currency against six major peers, was up 0.14% at 102.35 on Friday. Strong resistance can be seen at 145.97(23.6%fib),an upside break can trigger rise towards 146.44( Higher BB).On the downside, immediate support is seen 144.86(38.2% fib)a break below could take the pair towards 144.4(50%fib).
Equities Recap
European shares fell on Friday as fears of escalating conflict in the Middle East intensified.
At (GMT 13:22 ) UK's benchmark FTSE 100 was down by 0.62 percent, Germany's Dax was down by 0.57 percent, France’s CAC was down by 0.63 percent.
Commodities Recap
Gold prices gained on Friday as fears of escalating conflict in the Middle East lifted the appeal of the safe-haven metal, despite stronger than expected U.S. inflation data boosting the dollar and Treasury yields.
Spot gold was up 0.5% at $2,038.19 per ounce at 0951 GMT, extending its run above the $2,000 level to nearly a month. U.S. gold futures were up 1.2% to $2,042.90.
Oil prices leaped 4% on Friday, as oil tankers diverted course from the Red Sea following overnight air and sea strikes by the United States and Britain on Houthi targets in Yemen after attacks on shipping by the Iran-backed group.
Brent crude futures were up $3.16, or 4.1%, at $80.57 a barrel at 1124 GMT, while U.S. West Texas Intermediate crude futures climbed $3.05, or 4.2%, to $75.07.