Market Roundup
•US Dec Core Durable Goods Orders (MoM) 0.4%,0.4% forecast, 0.8% previous
•US Dec Durable Goods Orders (MoM) -0.9%,-0.5% forecast, 2.5% previous
•US Initial Jobless Claims 260K, 260K forecast, previous 286K previous
•US Jobless Claims 4-Week Avg 247.00K,231.00K previous
•US Continuing Jobless Claims 1,675K,1,650K forecast, 1,635K 1,635K previous
•US Dec Goods Orders Non Defense Ex Air (MoM) 0.0%, 0.4%,-0.1% previous
•US GDP Price Index (QoQ) (Q4) 7.0%, 6.0% forecast,5.9% previous
•US GDP (QoQ) (Q4) 6.9%,5.5% forecast, 2.3% previous
•US Core PCE Prices (Q4) 4.90%,4.90% forecast, 4.60% previous
•US Dec Pending Home Sales Index 117.7, 122.4 previous
•US Pending Home Sales (MoM) -3.8%, -0.2% forecast, -2.2% previous
•US Jan KC Fed Composite Index 24,24 previous
•US KC Jan Fed Manufacturing Index 20 ,10 previous
Looking Ahead - Economic Data (GMT)
•00:30 Australia PPI (YoY) (Q4) 2.9% previous
•00:30 Australia PPI (QoQ) (Q4) 0.9% forecast, 1.1% previous
Currency Summaries
EUR/USD: The euro declined against dollar on Thursday a day after the Federal Reserve said it could deliver faster and larger interest rate hikes in the months ahead. The Fed's hawkish tone on Wednesday brought dollar bulls out in force. The Fed indicated it was likely to raise rates in March, as widely expected, and reaffirmed plans to end its bond purchases that month before significantly reducing its asset holdings. The dollar index, which measures the greenback's value against other major currencies, rose to 97.299, the highest since July 2020. The 0.8% jump was the biggest single-day gain in more than two months. The euro slumped 0.95% to $1.1133 , its lowest since June 2020. Immediate resistance can be seen at 1.1172 (38.2%fib), an upside break can trigger rise towards 1.1206 (50%fib).On the downside, immediate support is seen at 1.1128(23.6%fib), a break below could take the pair towards 1.1100(Psychological level).
GBP/USD: Sterling hit its lowest level against the U.S. dollar so far this year on Thursday as investors sold off riskier assets in response to the U.S. Federal Reserve saying it would probably raise interest rates in March. Fed Chair Jerome Powell surprised investors by leaving the door open to larger and faster than expected interest rate hikes. Sterling versus the greenback briefly fell to $1.3359, its lowest level since Dec. 23. It was down 0.5% on the day to $1.3379 . Immediate resistance can be seen at 1.3431(38.2%fib), an upside break can trigger rise towards 1.3443 (5DMA).On the downside, immediate support is seen at 1.3369 (50%fib), a break below could take the pair towards 1.3313(61.8%fib).
USD/CAD: The Canadian dollar weakened to a three-week low against its U.S. counterpart on Thursday, as bets on faster interest rate hikes by the Federal Reserve bolstered the greenback against a basket of major currencies. The U.S. dollar busted out of its recent range a day after the Fed flagged it was ready to start lifting rates in March to contain inflation. Money markets have moved to price in as many as five quarter-percentage-point U.S. rate increases by the end of the year . The Canadian dollar was trading 0.6% lower at 1.2745 to the greenback, or 78.52 U.S. cents, after touching its weakest level since Jan. 6 at 1.2747. Immediate resistance can be seen at 1.2751 (23.6%fib), an upside break can trigger rise towards 1.2799 (Higher BB).On the downside, immediate support is seen at 1.2690 (9 DMA), a break below could take the pair towards 1.2638 (5 DMA).
USD/JPY: The dollar rose against the Japanese yen on Thursday after the U.S. Federal Reserve signalled it could start hiking interest rates in March to tame inflationary risks. The Federal Reserve on Wednesday said it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what U.S. central bank chief Jerome Powell pledged will be a sustained battle to tame inflation. Investors are expecting much more this time, with pricing in federal funds future contracts anticipating four rate increases this year. The Fed's benchmark overnight interest rate is currently set at the near-zero level. Strong resistance can be seen at 115.50 (23.6% fib), an upside break can trigger rise towards 116.00(Psychological level ).On the downside, immediate support is seen at 114.86 (38.2%fib), a break below could take the pair towards 114.64 (5DMA).
Equities Recap
European stocks closed higher on Thursday with investors shrugging off concerns about imminent interest rate hikes, and focusing on corporate earnings announcements. Some encouraging European and U.S. economic data too contributed to the positive mood in the markets.
UK's benchmark FTSE 100 closed up by 1.31 percent, Germany's Dax ended up by 0.42 percent, France’s CAC finished the day up by 0.60 percent.
Wall Street gyrated wildly on Thursday, the S&P 500 once again narrowly avoiding correction confirmation at the end of a session marked by a rally, selloff and recovery as investors juggled positive economic news with mixed corporate earnings, geopolitical unrest and the prospect of a more hawkish Federal Reserve.
Dow Jones closed down by 0.02% percent, S&P 500 closed down by 0.54% percent, Nasdaq settled down by 1.40% percent.
Commodities Recap
Gold prices slid over 1% to more than a two-week low on Thursday, as the dollar rallied after robust U.S. economic data strengthened the case for an interest rate hike by the Federal Reserve in March.
Spot gold was down 1.3% at $1,794.30 an ounce by 14:04 EST (1904 GMT), after hitting a low of $1,790.20. U.S. gold futures fell 2% to $1,793.10.
Oil prices eased on Thursday after Brent crude hit a seven-year high above $90 a barrel, as the market balanced concerns about tight worldwide supply with expectations the U.S. Federal Reserve will soon tighten monetary policy.
Benchmark Brent fell 15 cents to $89.81 a barrel by 1:17 p.m. EST (1817 GMT), while U.S. crude fell 20 cents to $87.15 a barrel in a volatile session with both contracts see-sawing between positive and negative territory.
