Posted at 17 December 2024 / Categories Market Roundups
Market Roundup
•Australia Westpac Consumer Sentiment (Dec): -2.0%, 5.3% previous
•New Zealand Net Debt Forecast (Jul): 45.10%, 43.10% previous
•New Zealand Economic Forecast (Jul): -17.320B, -11.074B previous
•New Zealand Budget Balance (Jul): -16.610B, -25.600B previous
•UK Average Earnings ex Bonus (Oct): 5.2%, 5.0% forecast, 4.9% previous
•UK Average Earnings Index + Bonus (Oct): 5.2%, 4.6% forecast, 4.4% previous
•UK Claimant Count Change (Nov): 0.3K, 28.2K forecast, -10.9K previous
•UK Employment Change 3M/3M (MoM) (Oct): 173K, -12K forecast, 253K previous
•UK Unemployment Rate (Oct): 4.3%, 4.3% forecast, 4.3% previous
Looking Ahead Economic Data (GMT)
•09:00 Italian Trade Balance (Oct): 3.220B forecast, 2.580B previous
•09:00 Italian Trade Balance EU (Oct): -1.18B previous
•09:00 German Business Expectations (Dec): 87.5 forecast, 87.2 previous
•09:00 German Current Assessment (Dec): 84.0 forecast, 84.3 previous
•09:00 German Ifo Business Climate Index (Dec): 85.5 forecast, 85.7 previous
•10:00 German ZEW Current Conditions (Dec): -92.6 forecast, -91.4 previous
•10:00 German ZEW Economic Sentiment (Dec): 6.8 forecast, 7.4 previous
•10:00 EUTrade Balance (Oct): 11.7B forecast, 12.5B previous
•10:00 EU ZEW Economic Sentiment (Dec): 12.2 forecast, 12.5 previous
Looking Ahead Events And Other Releases (GMT)
•10:00 EU ECB's Elderson Speaks
Currency Forecast
EUR/USD: The euro weakened on Tuesday as the dollar strengthened ahead of an anticipated interest rate cut in the United States. The Federal Open Market Committee (FOMC) is set to meet later in the day for its final policy meeting of 2024, with the interest rate decision due on Wednesday. Markets are pricing in a 95.4% likelihood of a quarter-point rate cut at this meeting, but only a 16.3% chance of a similar move in January, according to CME's FedWatch tool. Traders are also closely watching key U.S. data releases this week, including GDP and inflation figures, which could further impact market sentiment. Immediate resistance can be seen at 1.0525(38.2%fib), an upside break can trigger rise towards 1.0587(50%fib).On the downside, immediate support is seen at 1.0454(23.6%fib), a break below could take the pair towards 1.0411(Lower BB).
GBP/USD: The pound inched higher against the dollar after data showed UK wages rose more than expected. Regular pay, excluding bonuses, increased by 5.2% year-on-year, up from 4.9% in the previous period, the lowest since June 2022, and above the forecast of 5%. The UK's unemployment rate remained steady at 4.3% for the August to October 2024 period, in line with expectations. Sterling last bought $1.2697. Investors remained cautious ahead of key central bank decisions this week, including an anticipated interest rate cut from the U.S. Federal Reserve on Wednesday. Immediate resistance can be seen at 1.2728 (38.2%fib), an upside break can trigger rise towards 1.2784 (12th Dec high).On the downside, immediate support is seen at 1.2600(23.6%fib), a break below could take the pair towards 1.2498(Lower BB).
AUD/USD: The Australian dollar dipped on Tuesday as the U.S. dollar strengthened ahead of the Federal Reserve's interest rate decision. The Fed is expected to cut rates by 25 basis points, lowering the target range to 4.25% to 4.50%. However, the main focus will be on any signals regarding future rate cuts. Meanwhile, a Westpac survey revealed a decline in consumer sentiment for December, with concerns over the economic outlook outweighing improvements in personal finances. The Westpac-Melbourne Institute consumer sentiment index dropped 2.0% in December, reversing some of the sharp gains seen in the previous two months. At GMT 05:51, The Australian dollar was trading down 0.31% to $0.63575. Immediate resistance can be seen at 0.6424(38.2%fib), an upside break can trigger rise towards 0.6482(50%fib).On the downside, immediate support is seen at 0.6341(23.6%fib), a break below could take the pair towards 0.6311(Lower BB)
USD/JPY: The dollar remained steady against the yen on Tuesday as yen stayed defensive as the chances of a rate hike from the Bank of Japan (BOJ) this week appeared slim. Over 90% of market participants expect the BOJ to keep interest rates unchanged at this week's policy meeting. After ending negative interest rates in March and raising the short-term policy target to 0.25% in July, the BOJ has signaled it could hike again if wages and prices meet projections and Japan is on track to sustainably reach 2% inflation. However, the central bank has been cautious about the timing of the next rate hike, leading to fluctuating market expectations for a move between December and January. Immediate resistance can be seen at 154.21 (38.2%fib) an upside break can trigger rise towards 155.00 (Psychological level). On the downside, immediate support is seen at 153.09(50%fib) a break below could take the pair towards 151.95(61.8%fib).
Equities Recap
Asian stocks dipped on Tuesday as traders prepared for a series of central bank meetings this week. The U.S. Federal Reserve is expected to announce a rate cut.
The Hang Seng fell 0.17%, South Korea's KOSPI dropped 1.29%, and Japan's Nikkei 225 declined 0.13%.
Commodities Recap
Gold prices held steady on Tuesday ahead of the Federal Reserve's policy meeting, with markets closely anticipating the U.S. central bank's outlook for clues on its interest rate path in 2025.
Spot gold was little changed at $2,653.43 per ounce, as of 0603 GMT. U.S. gold futures were flat at $2,671.00.
Oil prices edged lower on Tuesday amid concerns over demand, with attention turning to the upcoming Federal Reserve meeting for clues on future economic direction.
U.S. West Texas Intermediate crude was down 11 cents at $70.60 a barrel at 0409 GMT, while Brent crude futures fell 6 cents to $73.85 a barrel.