Posted at 19 January 2024 / Categories Market Roundups
Market Roundup
•German Dec PPI (MoM) -1.2%, -0.5% forecast,-0.5% previous
•German Dec German PPI (YoY) -8.6%, -8.0% forecast,-7.9% previous
•UK Dec Retail Sales (MoM) -3.2%, -0.5% forecast,1.3% previous
•UK Dec Retail Sales (YoY) -2.4%, 1.1% forecast,0.1% previous
•UK Dec Core Retail Sales (MoM) -3.3%, -0.6% forecast,1.3% previous
•UK Dec Core Retail Sales (YoY) -2.1%,1.3%forecast,0.3%previous
•Swiss Dec PPI (MoM) -0.6%, -0.6% forecast,-0.9% previous
Looking Ahead Economic Data(GMT)
•13:30 Canada Nov Core Retail Sales (MoM) -0.1% forecast,0.6% previous
•13:30 Canada Retail Sales (MoM) 0.0% forecast,0.7% previous
•15:00 US Dec Existing Home Sales (MoM) 0.8% previous
•15:00 US Dec Existing Home Sales 3.82M forecast,3.82M previous
•15:00 US Jan Michigan 5-Year Inflation Expectations 2.9% previous
•15:00 US Jan Michigan Current Conditions 73.3 previous
•15:00 US Jan Michigan 1-Year Inflation Expectations 3.1% previous
•15:00 US Jan Michigan Consumer Sentiment 70.0 forecast,69.7 previous
•15:00 US Jan Michigan Consumer Expectations 67.4 previous
•18:00 US Atlanta Fed GDPNow (Q4) 2.4% forecast,2.4% previous
•18:00 US U.S. Baker Hughes Oil Rig Count 499 previous
•18:00 US U.S. Baker Hughes Total Rig Count 619 previous
Looking Ahead Events And Other Releases (GMT)
•18:00 US Fed Vice Chair for Supervision Barr Speaks
Currency Forecast
EUR/USD: The euro was little changed on Friday as investors digested the European Central Bank's December policy meeting minutes. European Central Bank policymakers expressed confidence in inflation reaching the target, but acknowledged numerous risks that justified maintaining a steady policy and high borrowing costs, according to Thursday's accounts . Hawkish remarks from European Central Bank policymakers prompted traders to scale back their bets of an interest rate cut.The poll, which was released on Thursday, also showed the first ECB rate cut was more likely to occur earlier than expected than later.As inflation moves closer to the ECB's 2% target, the next move is almost certainly a cut, but the timing is still up for debate. Immediate resistance can be seen at 1.0934(50%fib), an upside break can trigger rise towards 1.0955(61.8%fib).On the downside, immediate support is seen at 1.0868(38.2%fib), a break below could take the pair towards 1.0853(Lower BB).
GBP/USD: The pound declined on Friday, after a shock drop in British consumer spending in December raised the risk of recession, putting a stop to the currency's recent gains. British retailers suffered the biggest drop in sales for almost three years during December, raising the risk that the economy slipped into recession late last year, official data showed on Friday. The Office for National Statistics (ONS) said people doing Christmas shopping earlier than usual especially for food - contributed to retail sales volumes shrinking 3.2% between December and November. It was the biggest monthly drop since January 2021 and left the level of sales at its lowest ebb since May 2020.The reading was worse than all forecasts in a poll of economists which had pointed to a 0.5% fall. Immediate resistance can be seen at 1.2729(23.6%fib), an upside break can trigger rise towards 1.2799(Higher BB).On the downside, immediate support is seen at 1.2633 (38.2%fib), a break below could take the pair towards 1.2592(Lower BB).
USD/CHF: The dollar rose against the Swiss franc on Friday as the U.S. economy and pushback from central bankers has caused traders to dial down expectations of swift falls in interest rates. U.S. labour market data released on Thursday was strong, with weekly jobless claims dropping to their lowest level in nearly 1-1/2 years, adding to the pressure on market rate-cut wagers.Fed official Christopher Waller said on Tuesday the U.S. economy's strength gives policymakers flexibility to move carefully and slowly , which traders took as pushing back at pricing for a speedy fall in rates. Investors now expect 140 bps of interest rate cuts from the Fed this year, down from 165 bps a week earlier. They also see a roughly 54% chance the first cut comes in March, from 77% a week ago. Immediate resistance can be seen at 0.8690 (38.2%fib), an upside break can trigger rise towards 0.8752 (23.6%fib).On the downside, immediate support is seen at 0.8638(50% fib), a break below could take the pair towards 0.8588 (61.8%fib).
USD/JPY: The dollar eased against the yen on Friday as investors became less sure the Federal Reserve will begin cutting interest rates in March. Atlanta Federal Reserve President Raphael Bostic on Thursday said he was open to lower rates sooner than anticipated depending on how quickly inflation falls, but the baseline was for cuts to start in the third quarter.Traders now expect about a 55% chance of a rate cut in March, down from 71% last week, according to CME's Fed Watch Tool. The dollar index opens new tab dipped 0.1% but was up nearly 1% for the week so far. Strong resistance can be seen at 148.77(23.6% fib),an upside break can trigger rise towards 149.42( Higher BB).On the downside, immediate support is seen 148.00(Psychological level)a break below could take the pair towards 147.25(38.2%fib).
Equities Recap
European shares rose on Friday, boosted by gains in financials, although the benchmark index remained on course for a weekly decline after investors tempered their rate-cut expectations.
At (GMT 13:22 ) UK's benchmark FTSE 100 was up by 0.47 percent, Germany's Dax was up by 0.29 percent, France’s CAC was up by 0.09 percent.
Commodities Recap
Gold drifted higher on Friday, buoyed by a weaker U.S. dollar but was set to log its biggest weekly decline in six after the Federal Reserve countered market expectations of an early interest rate cut.
Spot gold rose 0.5% to $2,032.90 per ounce by 1231 GMT but was down 0.8% so far in the week. U.S. gold futures rose 0.7% to $2,035.80.
Oil was little changed on Friday and heading for a weekly gain, as Middle East tensions and oil output disruptions caused by cold weather in the U.S., the world's biggest producer, balanced concerns about the health of the Chinese and global economies.
Brent crude futures fell 16 cents, or 0.2%, to $78.94 a barrel by 1213 GMT, while U.S. West Texas Intermediate crude futures (WTI) dropped 21 cents to $73.87.