Market Roundup
•US May CPI (MoM) 0.0%,0.1% forecast,0.3% previous
•US May Real Earnings (MoM) 0.4%,-0.4% previous
•US Core CPI (YoY) 3.4% ,3.5% forecast,3.6% previous
•US May CPI (YoY) 3.3% ,3.4% forecast,3.4% previous
•US May CPI Index, n.s.a. 314.07, 314.37 forecast,313.55 previous
•US May Core CPI (MoM) 0.2%, 0.3% forecast, 0.3% previous
•US May Federal Budget Balance -279.6B forecast,210.0B previous
•US Crude Oil Inventories 3.730M, -1.200M forecast, 1.233M previous
•US Fed Interest Rate Decision 5.50%, 5.50% forecast, 5.50% previous
Looking Ahead Economic Data(GMT)
•No Data Ahead
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro initially gained on Wednesday but gave up ground after data showed that consumer prices in May rose less than economists expected, but pared losses after updated interest rate projections by Federal Reserve officials showed an expectation for only one rate cut this year.The headline consumer price index (CPI) was flat on the month, below expectations for a 0.1% gain. Core prices rose by 0.2%, below economists' projections for a 0.3% increase. Fed policymakers as of March had projected three rate cuts this year. The U.S. central bank on Wednesday also pushed out the start of rate cuts to perhaps as late as December. The euro gained 0.63% to $1.0807 and got as high as $1.0852. It had fallen to $1.07195 on Tuesday, the lowest level since May 2. Immediate resistance can be seen at 1.0766(Daily high), an upside break can trigger rise towards 1.0809(38.2% fib).On the downside, immediate support is seen at 1.0741 (50% fib), a break below could take the pair towards 1.0671(61.8% fib).
GBP/USD: The pound edged higher on Wednesday even as data showed economic growth stagnated at the start of the second quarter, as analysts looked beyond one-off factors and still expected the economic recovery to gather pace in the coming months.Britain's economic growth was flat month-over-month in April, the Office for National Statistics said, weighed down partly by the impact of heavy rain on activity throughout the month. Markets are pricing around a 70% chance that the BoE cuts interest rates by the September meeting, while around 35 basis points of rate cuts are priced in this year. The U.S. is set to be the main driver for currency markets in the near term, with inflation figures and the Federal Reserve policy announcement both due later on Wednesday. Immediate resistance can be seen at 1.2790(23.6%fib), an upside break can trigger rise towards 1.2823(Higher BB).On the downside, immediate support is seen at 1.2704(38.2%fib), a break below could take the pair towards 1.2629(50% fib).
USD/CAD: The Canadian dollar gave back some earlier gains against its U.S. counterpart on Wednesday as the Federal Reserve signaled a reduced number of interest rate cuts this year despite evidence of cooling inflation. Earlier on Wednesday, data showed U.S. consumer prices cooling more than expected in May, pressuring the greenback (.DXY), opens new tab against a basket of major currencies. The price of oil , one of Canada's major exports, settled 0.8% higher at $78.50 a barrel, helped by forecasts that global oil inventories would fall in the second half of 2024.The loonie was trading 0.3% higher at 1.3710 per U.S. dollar, or 72.94 U.S. cents, after trading in a range of 1.3681 to 1.3760 .Immediate resistance can be seen at 1.3787(23.8%fib), an upside break can trigger rise towards 1.3810 (Higher BB).On the downside, immediate support is seen at 1.3700(38.2%fib), a break below could take the pair towards 1.3543 (50%fib).
USD/JPY: The U.S. dollar steadied against yen on Wednesday after the U.S. Federal Reserve concluded its two-day policy meeting by leaving interest rates unchanged, and released its accompanying policy statement and Summary of Economic Projections (SEP). The more-hawkish-than-expected SEP seemed to contradict the Labor Department's closely watched CPI report released earlier in the day, which showed core prices growing at their slowest annual pace in over three years.In his press conference following the decision, Fed Chair Jerome Powell acknowledged that inflation has eased substantially but remains too high and rate-cut expectations have been pushed out due to slower-than-expected progress in bringing price growth down to the central bank's 2% goal .Strong resistance can be seen at 157.22(23.6%fib), an upside break can trigger rise towards 158.22Higher BB).On the downside, immediate support is seen at 155.43(38.2% fib), a break below could take the pair towards 154.78 (Lower BB).
Equities Recap
European shares advanced on Wednesday, with rate-sensitive sectors like real-estate jumping after a cool U.S. inflation reading propped up hopes that the Federal Reserve could kick-off its policy easing cycle soon.
UK's benchmark FTSE 100 closed down by 0.84 percent, Germany's Dax ended up by 1.49 percent, France’s CAC finished the day up by 0.97 percent.
The S&P 500 and Nasdaq posted record closing highs for a third straight day on Wednesday after inflation data came in softer than expected but the indexes ended off the day's highs as the Federal Reserve projected only one interest rate cut this year.
Dow Jones closed down by 0.09 percent, S&P 500 ended up by 0.85 percent, Nasdaq finished the day up by 1.54 percent.
Commodities Recap
Oil prices settled higher, supported by simmering tensions in the Middle East, and by forecasts that global inventories will fall in the latter half of the year.
U.S. crude rose 0.77% to settle at $78.50 per barrel, while Brent settled at $82.60, up 0.83% on the day.
Gold gained ground but lost some shine in the wake of the Fed's updated economic projections.
Spot gold added 0.2% to $2,320.76 an ounce.
Oil settled higher on Wednesday as ongoing tensions in the Middle East lent support to prices, but news that interest rate cuts could start as late as December capped gains, following the Federal Reserve's statement concluding its two-day meeting.
Brent crude futures settled 68 cents, or 0.83 per cent, higher at $82.60 a barrel, with U.S. West Texas Intermediate (WTI) crude futures up 60 cents, or 0.77 per cent, to $78.50.
