Market Roundup
• US Building Permits (MoM) (Nov) 6.1%, -0.4% forecast
• US Current Account (Q3) -310.9B, -286.0B forecast, -275.0B previous
• US Housing Starts (MoM) (Nov) -1.8%, -3.2% previous
• US Housing Starts (Nov) 1.289M, 1.350M forecast, 1.312M previous
• US USD Atlanta Fed GDPNow (Q4) 3.2%, 3.1% forecast, 3.1% previous
• US USD Crude Oil Inventories -0.934M, -1.600M forecast, -1.425M previous
• US Gasoline Production -0.173M,0.549M previous
• US Gasoline Heating Oil Stockpiles-0.304M forecast, 0.504M previous
• US Gasoline Production -0.173M forecast, 0.549M previous
•US Fed Interest Rate Decision 4.50%, 4.50% forecast, 4.75% previous
•Australia MI Inflation Expectations (Dec) 4.2%, 3.8% previous
•New Zealand ANZ Business Confidence (Dec) 62.3, 64.9 previous
•New Zealand NBNZ Own Activity (Dec) 50.3%, 48.0% previous
•Japan Foreign Bonds Buying 706.1B, -639.1B previous
•Japan Foreign Investments in Japanese Stocks -587.6B, 482.9B previous
Looking Ahead Economic Data(GMT)
• 03:00 Japan BoJ Interest Rate Decision 0.25% forecast, 0.25% previous
Looking Ahead Events And Other Releases (GMT)
•06:30 Japan BoJ Press Conference
Currency Summaries
EUR/USD: The euro declined on Wednesday after Federal Reserve delivered a widely expected interest rate cut while also indicating it would slow the pace of its monetary policy easing cycle. The Fed lowered its benchmark policy rate by 25 basis points to the 4.25% to 4.50% range, with officials signaling they would likely pause future rate cuts next year given a stable labor market and inflation. Fed Chair Jerome Powell said in his press conference that it was appropriate to move forward cautiously and look for progress on inflation", adding that the labor market is softening. The U.S. dollar index, which measures the greenback against six rivals, rose to as high as 108.260, hitting its highest level since November 2022. It was last up 1.08% at 108.08. Immediate resistance can be seen at 1.0383(38.2%fib), an upside break can trigger rise towards 1.0416(50%fib).On the downside, immediate support is seen at 1.0337(23.6%fib), a break below could take the pair towards 1.0300(Psychological level)
GBP/USD: Sterling slipped lower against the dollar on Wednesday after the Federal Reserve lowered its policy rate to a 4.25%-4.50% range, as expected while delivering a more hawkish outlook and growth and inflation projections.The median Fed projection signaled only two cuts in 2025, which would reduce the benchmark rate to 3.9%, versus 3.4% foreseen in the September forecast. Cleveland Fed President Hammack, a hawk, dissented by voting to leave the policy rate unchanged. Fed Chair Jerome Powell said the policy stance is significantly less restrictive and, therefore, the FOMC can be more cautious about reducing rates. He said the policy-setting committee want to see progress on inflation when thinking about more cuts, though expectations are well anchored. Immediate resistance can be seen at 1.2735(50%fib), an upside break can trigger rise towards 1.2789 (SMA 30).On the downside, immediate support is seen at 1.2516(23.6%fib), a break below could take the pair towards 1.2452(Lower BB)
USD/CAD: The Canadian dollar tumbled to a near five-year low against its U.S. counterpart on Wednesday as hawkish guidance from the Federal Reserve boosted the greenback and investors sought protection against additional losses for the Canadian currency. The U.S. dollar jumped against a basket of major currencies after the Fed delivered a widely expected interest rate cut while also indicating it would slow the pace of its monetary policy easing cycle. The loonie was trading 0.9% lower at 1.4440 to the U.S. dollar, or 69.25 U.S. cents, after touching its weakest intraday level since the onset of the COVID-19 crisis in March 2020 at 1.4444. Immediate resistance can be seen at 1.4470(23.6% fib), an upside break can trigger rise towards 1.4517 (Higher BB).On the downside, immediate support is seen at 1.4383 (38.2%fib), a break below could take the pair towards 1.4320(50%fib).
USD/JPY: The USD/JPY remained near a seven-week low amid growing expectations that the Bank of Japan (BOJ) could soon raise interest rates. All eyes in Asia now turn to Tokyo. The BOJ is expected to keep interest rates on hold, leaving investors to take their cue from Governor Kazuo Ueda's remarks in his press conference.Japanese swap rates imply a 60% probability the BOJ will raise rates by 25 bps in January, down from around 70% a couple of weeks ago. A quarter-point hike is not fully priced until May, and only 45 bps of tightening in total is expected by December, the swaps curve shows. Immediate resistance can be seen at 155.22 (38.2%fib) an upside break can trigger rise towards 156.00 (Psychological level). On the downside, immediate support is seen at 154.15(38.2%fib) a break below could take the pair towards 153.11(50%fib).
Equities Recap
European share indices closed up on Wednesday, boosted by technology stocks and French automaker Renault, though gains were capped on caution ahead of the Federal Reserve's policy decision and outlook.
UK's benchmark FTSE 100 closed up by 0.05 percent, Germany's Dax ended up by 0.02 percent, France’s CAC finished the day up by 0.26 percent.
Wall Street closed sharply lower on Wednesday, with the Dow dropping more than 1,100 points. The decline followed the U.S. Federal Reserve's expected rate cut, but investors were unsettled by the Fed's signal to slow the pace of future cuts in the coming year.
Dow Jones closed down by 2.58% percent, S&P 500 closed down by 2.95% percent, Nasdaq settled down by 3.62% percent.
Commodities Recap
Gold prices languished near a one-month low on Wednesday after the U.S. Federal Reserve indicated it would slow the pace of its monetary policy easing cycle next year, lifting the dollar and Treasury yields.
Spot gold were little changed at $2,588.80 per ounce as of 0008 GMT, after dropping more than 2% overnight to hit its lowest since Nov. 18. U.S. gold futures were down 1.9% to $2,602.70.
Oil prices ended higher on Wednesday, supported by a decline in U.S. crude inventories and the expected interest rate cut by the U.S. Federal Reserve. However, gains were limited as the Fed signaled a slower pace of future rate cuts.
Brent futures settled up 20 cents, or 0.27%, to $73.39 a barrel. U.S. West Texas Intermediate crude settled up 50 cents, or 0.71%, to $70.58. Both benchmarks retreated from gains of more than $1 a barrel at session highs.
