Posted at 24 December 2024 / Categories Market Roundups
Market Roundup
•Chinese authorities pledge more support for economy
•Fed outlook remains top of investors' minds
•Dollar, US yields steady near milestone highs
•Japan BoJ Core CPI (YoY) 1.7%, 1.5%forecast, 1.5% previous
Looking Ahead Economic (GMT)
•No Data Ahead
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro edged lower against dollar on Tuesday as traders assessed comments from European Central Bank (ECB) President Christine Lagarde. In an interview with the media, Lagarde stated that the eurozone was close to reaching the ECB's medium-term inflation target. Despite the ECB's fourth rate cut to 3% this month, eurozone bond yields rose after Lagarde adopted a slightly more hawkish tone than expected, emphasizing that the fight against inflation was not over. She pointed out that while headline inflation was at 2.2%, services inflation remained stubbornly high at 3.9%. The dollar index held near a two-year high at 108.14, having climbed more than 2% for the month thus far.The euro eased 0.09% to $1.03955Immediate resistance can be seen at 1.0399(38.2%fib), an upside break can trigger rise towards 1.0438(50%fib).On the downside, immediate support is seen at 1.0346(23.6%fib), a break below could take the pair towards 1.0300(Psychological level)
GBP/USD: The pound dipped against the dollar on Tuesday as dollar was helped by elevated U.S. Treasury yields as investors prepared for fewer Federal Reserve rate cuts in 2025. The two-year Treasury yield last stood at 4.3427%, while the benchmark 10-year yield steadied near a seven-month high at 4.5907%. After a busy period of central bank decisions, this week is much quieter, with the focus shifting to interest rate expectations as the main driver of market movements. Markets are now pricing in just about 35 basis points of easing for 2025, which has in turn sent U.S. Treasury yields surging and the dollar to new highs.With no significant UK economic data scheduled ahead of the Christmas holiday, market activity is likely to be subdued. Immediate resistance can be seen at 1.2690(38.2%fib), an upside break can trigger rise towards 1.2731 (Dec 18th high).On the downside, immediate support is seen at 1.2560(23.6%fib), a break below could take the pair towards 1.2524(Lower BB)
AUD/USD: The Australian dollar remained under pressure on Tuesday following hints from the Reserve Bank of Australia (RBA) about potential rate cuts. Minutes from the RBA's December policy meeting revealed that while the board believed policy needed to stay restrictive for now, it left the door open for easing as early as February, provided the economic data unfolds as expected. The RBA's unexpected dovish shift at the meeting surprised many, leading markets to raise the probability of a rate cut in February to around 50%. By April, a quarter-point cut in the 4.35% cash rate is fully priced in, with an implied rate of 3.85% by July.At GMT 07:39 The Australian dollar was last trading down 0.12% to $0.6242. Immediate resistance can be seen at 0.6279(38.2%fib), an upside break can trigger rise towards 0.6339(50%fib).On the downside, immediate support is seen at 0.6190(23.6%fib), a break below could take the pair towards 0.6160(Lower BB)
USD/JPY: The U.S. dollar held near a five-month low against the yen on Monday, as traders remained alert to potential intervention from Japanese authorities. Japan's Finance Minister, Katsunobu Kato, reiterated Tokyo's concerns over excessive foreign exchange fluctuations, warning speculators that authorities are prepared to intervene to stabilize the weakening yen. Last week, Kato described the currency market situation as "alarming," signaling growing unease over the yen's slide. The yen remained near a five-month low, surpassing 157 per dollar, having already dropped 4.7% this month, keeping traders on high alert for any action from Japan’s government. Immediate resistance can be seen at 157.37 (Higher BB) an upside break can trigger rise towards 158.81 (23.6%fib). On the downside, immediate support is seen at 155.60(38.2%fib) a break below could take the pair towards 155.00 (Psychological level).
Equities Recap
Asian stocks inched higher on Tuesday, although the moves were muted due to the shortened holiday week.
Hang Seng was up 1.08% , and South Korea's KOSPI was down by 0.06%.Japans’ Nikkei was down 0.26
Commodities Recap
Gold prices inched higher on Tuesday in subdued trading during the holiday-shortened week, as investors awaited U.S. President-elect Donald Trump's trade tariff policies and a more gradual rate-cut approach from the Federal Reserve in the coming year.
Spot gold gained 0.2%, reaching $2,618.59 per ounce as of 0537 GMT, while U.S. gold futures also rose by 0.2%, trading at $2,632.00.
Oil prices rose on Tuesday, recovering from the previous session's losses, supported by a slightly more positive market outlook for the short term and stronger U.S. economic data, despite thin trading volumes ahead of the Christmas holiday.
Brent crude futures were up 33 cents, or 0.5%, to $72.96 a barrel, and U.S. West Texas Intermediate crude futures rose 29 cents, or 0.4%, to $69.53 a barrel at 0422 GMT.