Posted at 01 February 2024 / Categories Market Roundups
Market Roundup
• Fed holds key interest rate at 5.25%-5.50%
•US Employment Benefits (QoQ) (Q4) 0.70%,0.90% previous
•US Employment Cost Index (QoQ) (Q4) 0.9%,1.0% forecast,1.1% previous
•US Employment Wages (QoQ) (Q4) 0.90%,1.20% previous
•Canada Nov GDP (MoM) 0.2%, 0.1% forecast,0.0% previous
•US Jan Chicago PMI 46.0, 48.0 forecast,46.9 previous
•US EIA Refinery Crude Runs (WoW) -0.428M,-1.377M previous
•US EIA Weekly Refinery Utilization Rates (WoW) -2.6% ,-7.1% previous
•US Gasoline Production0.956M,-1.040M previous
•US Distillate Fuel Production -0.115M,-0.402M previous
•US Cushing Crude Oil Inventories -1.972M,-2.008M previous
•US Crude Oil Imports1.234M, -1.245M previous
•US Fed Interest Rate Decision 5.50%,5.50% forecast,5.50% previous
Looking Ahead Economic Data(GMT)
•00:30 Australia Import Price Index (QoQ) (Q4) 0.6% forecast, 0.8% previous
•00:30 Australia Export Price Index (QoQ) (Q4) -3.1% previous
•00:30 Australia Dec Building Approvals (YoY) -1.60% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro dipped against dollar on Wednesday after the Federal Reserve kept interest rates unchanged and dashed hopes for a rate cut as early as March. The Federal Open Markets Committee (FOMC) maintained its key policy rate at 5.25%-5.50%, as predicted, despite gradually falling inflation and a resilient economy. In its statement, the FOMC said it "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%," disappointing investors who had hoped for a swift dovish shift. The euro fell 0.4% to $1.08005 and got as low as $1.07950, the lowest since Dec. 13. Immediate resistance can be seen at 1.0866(23.6%fib), an upside break can trigger rise towards 1.0892( Jan 31st high).On the downside, immediate support is seen at 1.0795 (38.2%fib), a break below could take the pair towards 1.0763 (Lower BB).
GBP/USD: The British pound fell against on Wednesday after the Federal Reserve left interest rates constant as predicted but said it would not lower them until inflation was moving sustainably toward its 2% objective. The Fed made a significant step toward lowering interest rates in the coming months with a policy statement that balanced inflation worries with other dangers to the US economy and eliminated a longstanding reference to potential future borrowing cost hikes. The dollar climbed versus the pound and other major currencies after Fed Chair Jerome Powell stated at a news conference that lowering interest rates in March was not the "base case," which was less dovish than many investors had expected. Immediate resistance can be seen at 1.2722(38.2%fib), an upside break can trigger rise towards 1.2798(Higher BB).On the downside, immediate support is seen at 1.2650 (50%fib), a break below could take the pair towards 1.2627(Lower BB).
USD/CAD The Canadian currency dropped versus its US counterpart on Wednesday, pulling back from a near three-week high, as the Federal Reserve's indication that an interest rate cut was not imminent overshadowed better-than-expected domestic data. According to early estimates, Canada's GDP increased by 0.3% in December, resulting in annualized growth of 1.2% in the fourth quarter. The Bank of Canada expects a flat reading. The price of oil, one of Canada's major exports, settled down 2.5% at $75.85 a barrel, giving back some recent gains, while the Canadian dollar was trading 0.3% lower at 1.3440 to the greenback. Immediate resistance can be seen at 1.3470 (38.2%fib), an upside break can trigger rise towards 1.2538(23.6%fib).On the downside, immediate support is seen at 1.3415 (50%fib), a break below could take the pair towards 1.3350(61.8%fib).
USD/JPY: The dollar strengthened against the yen on Wednesday after Federal Reserve Chair Jerome Powell rejected predictions of a rate cut in the United States by March. The US central bank kept interest rates constant, but Powell dismissed the idea that the Fed would drop rates in the spring, as many market players had expected. The ADP National Employment Report indicated on Wednesday that private payrolls expanded by 107,000 jobs last month, falling short of experts' forecasts of 145,000. Investors now focused on Friday's U.S. jobs report for January, which is expected to show that employers added 180,000 jobs during the month. Strong resistance can be seen at 147.27(38.2%fib),an upside break can trigger rise towards 148.58(Psychological level).On the downside, immediate support is seen 146.03 (50%fib)a break below could take the pair towards 144.80(61.8%fib).
Equities Recap
European shares ended down on Wednesday after Federal Reserve's signal that an interest rate cut was not imminent overshadowed stronger-than expected domestic data.
UK's benchmark FTSE 100 closed down by 0.47 percent, Germany's Dax ended down by 0.40 percent, France’s CAC finished the day down by 0.27 percent.
U.S. stocks tumbled on the last trading day in January after the Federal Reserve held interest rates steady while dashing hopes for interest rate cut as soon as March.
Dow Jones closed down by 0.82% percent, S&P 500 closed down by 1.61% percent, Nasdaq settled down by 2.23% percent.
Treasuries Recap
Treasury yields fell sharply after the Federal Reserve left interest rates unchanged as expected on Wednesday but indicated it would not reduce them until inflation was "moving sustainably" towards its 2% target.
Treasury yields slid to near three-week lows and the benchmark 10-year note posted its largest daily loss since December on the Fed's no rate-cut soon stance.
The two-year Treasury yield, which reflects interest rate expectations, fell 14.4 basis points to 4.215%, while the 10-year's yield slid 13.1 basis points at 3.926%.
Commodities Recap
Gold prices reversed course and edged lower on Wednesday after the Federal Reserve Chair Jerome Powell pushed back strongly against expectations of a U.S. rate cut by March.
Spot gold eased 0.1% at $2,034.37 per ounce by 03:10 p.m. ET (2010 GMT) after rising as much as 1% earlier in the session. U.S. gold futures settled 0.8% higher at $2067.4.
Oil prices fell on Wednesday, hit by poor economic activity in China, leading oil importer, and a surprising surge in US petroleum stocks as producers increased output following freezing weather this month.
Brent crude futures for March, which expire on Wednesday, settled down $1.16, or about 1.4%, to $81.71 a barrel while the more actively traded April contract settled down $1.89, or about 2.3%, at $80.55.
U.S. West Texas Intermediate crude futures settled down $1.97, or roughly 2.5%, to $75.85.