Posted at 24 January 2024 / Categories Market Roundups
Market Roundup
•U.S. business activity picked up in Jan
•Dollar down 0.4% against its rivals
•GDP advance estimate, PCE data due this week
•US Jan S&P Global Composite PMI 52.3,50.9 previous
•US Jan Manufacturing PMI 50.3, 47.9 forecast,47.9 previous
•US Jan Services PMI 52.9,51.0 forecast,51.4 previous
•US Cushing Crude Oil Inventories -2.008M,-2.099M previous
•US Gasoline Inventories 4.913M,2.300M forecast,3.083M previous
•US Distillate Fuel Production -0.402M,-0.265M previous
•US EIA Weekly Refinery Utilization Rates (WoW) -7.1%,-0.3% previous
•1US Gasoline Production -1.040M,-0.291M previous
•US Crude Oil Imports -1.245M ,-0.528M previous
•US Heating Oil Stockpiles -0.379M,0.542M previous
•US EIA Weekly Distillates Stocks 1.417M,0.348M forecast,2.370M previous
•US Crude Oil Inventories -9.233M, -9.233M-2.150M forecast,-2.492M previous
Looking Ahead Economic Data(GMT)
• 23:30 Japan Foreign Investments in Japanese Stocks 1,202.6B previous
•23:30 Japan Foreign Bonds Buying 1,642.8B previous
Looking Ahead Events And Other Releases (GMT)
•No data Ahead
Currency Summaries
EUR/USD: The euro strengthened on Wednesday after Euro zone business downturn eases in January. Euro zone businesses faced a tough start to 2024 with activity contracting again in January as demand continued to fall while price pressures rose due to tensions in the Red Sea, a survey showed.The manufacturing outlook did improve somewhat but remained in contractionary territory and was partly offset by a steeper decline in the bloc's dominant services industry.HCOB's preliminary euro zone Composite PMI, compiled by S&P Global, rose to 47.9 this month from December's 47.6, just shy of expectations in a Reuters poll for 48.0 but marking its eighth month below the 50 level separating growth from contraction. Immediate resistance can be seen at 1.0934(23.6%fib), an upside break can trigger rise towards 1.0970(Jan 15th High).On the downside, immediate support is seen at 1.0850(38.2%fib), a break below could take the pair towards 1.0832(Lower BB).
GBP/USD: The British pound strengthened against the dollar on Wednesday as a strong PMI reading caused traders to further dial back their bets on Bank of England rate cuts this year. Britain's economy started 2024 on a stronger footing, according to a survey of businesses published on Wednesday that prompted investors to pare their bets on the Bank of England moving quickly to cut interest rates.But while services firms grew a bit more rapidly than expected this month, Britain's long-struggling manufacturers are now being hit by the inflationary impact of tensions in the Red Sea, the Purchasing Managers' Index (PMI) showed. The preliminary S&P Global/CIPS UK Composite PMI, which spans services and manufacturing firms, rose to 52.5 in January, the highest in seven months and up from December's final reading of 52.1. Immediate resistance can be seen at 1.2757(38.2%fib), an upside break can trigger rise towards 1.2813(Higher BB).On the downside, immediate support is seen at 1.2682 (38.2%fib), a break below could take the pair towards 1.2649 (Jan 23rd low).
USD/CAD: The Canadian dollar weakened on Wednesday against its U.S. counterpart after the Bank of Canada left its policy rate on hold. The Bank of Canada held its benchmark interest rate at a 22-year high of 5%, saying that while underlying inflation was still a concern, the bank's focus is shifting to when to cut borrowing costs rather than whether to hike again. The BoC governing council has held rates steady at four consecutive policy meetings after last hiking in July. Annual inflation in December accelerated to 3.4%, still higher than the central bank's 2% target but below a June 2022 peak of 8.1%. The loonie was up 0.1% at 1.3523 to the greenback. Immediate resistance can be seen at 1.3536(38.2%fib), an upside break can trigger rise towards 1.3574 (Higher BB).On the downside, immediate support is seen at 1.3468 (38.2%fib), a break below could take the pair towards 1.3426 (Jan 24th low).
USD/JPY: The dollar dropped on Wednesday as the yen jumped as investors consolidated positions and looked to economic data this week and the Federal Reserve policy meeting next week for more clues about the start of the easing cycle.The currency, however, cut its losses after data showed business activity in the world's largest economy picked up in January and a measure of inflation eased. A gauge of prices charged by companies for their products fell to the lowest level in more than 3-1/2 years, data showed. Investors are now looking to Thursday's first reading of the U.S. gross domestic product for the fourth quarter, and another inflation reading - the personal consumption expenditure (PCE) data - on Friday. Strong resistance can be seen at 148.45(38.2% fib),an upside break can trigger rise towards 148.42( Jan 19th high).On the downside, immediate support is seen 147.00(50%fib)a break below could take the pair towards 145.56(50%fib).
Equities Recap
European shares surged by over 1%, propelled by the positive performance of technology stocks. Software company SAP and chip-making equipment maker ASML Holding reported robust earnings, contributing to the rally. Additionally, renewed stimulus measures from China's central bank added to the overall positive sentiment in the market.
UK's benchmark FTSE 100 closed up by 0.56 percent, Germany's Dax ended up by 1.58 percent, France’s CAC finished the day up by 0.91 percent.
The S&P 500 climbed to its fourth straight record high close on Wednesday, as Netflix surged following blowout quarterly results and a strong report from ASML fueled gains in chipmakers.
Dow Jones closed down by 0.26% percent, S&P 500 closed up by 0.08% percent, Nasdaq settled up by 0.36% percent.
Treasuries Recap
The benchmark S&P 500 inched up to a closing record for the fourth day in a row after hitting a new intraday high. It was helped by a surge in Netflix , opens new tab shares after the video streaming service smashed subscriber growth estimates.
The yield on benchmark 10-year Treasury notes rose to 4.1762% compared with its U.S. close of 4.142% on Tuesday. The two-year yield .
Commodities Recap
Gold eased on Wednesday after data showed strong U.S. business activity, even as a weakened dollar limited losses, while investors looked ahead to more economic indicators to assess when the Federal Reserve might first cut interest rates.
Spot gold was down 0.7% at $2,014.56 per ounce at 2:13 p.m. ET (1913 GMT), eyeing its worst session in a week. U.S. gold futures settled 0.5% lower at $2,016.00.
Oil prices edged up about 1% on Wednesday on a bigger-than-expected U.S. crude storage withdrawal, a slump in U.S. crude output, Chinese economic stimulus, geopolitical tensions and a weaker dollar.
Brent crude futures rose 49 cents, or 0.6%, to settle at $80.04 a barrel, while U.S. West Texas Intermediate crude (WTI) ended 72 cents, or 1.0%, at $75.09.