Market Roundup
•EU Sep Consumer Confidence -4.0,-5.8 forecast, -5.3 previous
•US Aug Existing Home Sales (MoM) -2.0%, 2.0% previous
•`US Aug Existing Home Sales 5.88M, 5.89M forecast, 5.99M previous
•`US Cushing Crude Oil Inventories -1.476M, -1.103M previous
•`US Crude Oil Inventories -3.481M,-2.440M, -6.422M previous
•`US Fed Interest Rate Decision 0.25%,0.25% previous
Looking Ahead Economic Data (GMT)
•`•`23:50 Japan Foreign Investments in Japanese Stocks128.7B previous
•`23:50 Japan Foreign Bonds Buying 1,761.4B previous
Looking Ahead - Events, Other Releases (GMT)
•`No significant events
Currency Summaries
EUR/USD: The euro dipped on Wednesday as dollar strengthened after the Federal Reserve paved the way for the central bank to reduce its monthly bond purchases shortly. Federal Reserve Chair Jerome Powell said tapering of bond purchases could be done by mid-2022 following a statement from the central bank that also signaled interest rate increases may follow more quickly than expected. Immediate resistance can be seen at 1.1699 (38.2%fib), an upside break can trigger rise towards 1.1710 (5DMA).On the downside, immediate support is seen at 1.1681 (Lower BB), a break below could take the pair towards 1.1660 (23.6%fib).
GBP/USD: Sterling fell to a one-month low on Wednesday as investors pushed back expectations of a rate hike by the Bank of England after a flurry of weak data. Weak economic output in July and retail sales the following month, along with high inflation, weighed on the central bank's decision making. The British currency eased 0.1% to $1.3616, with more losses expected after it dropped below a low of $1.364 hit on Monday . Immediate resistance can be seen at 1.3664 (38.2%fib), an upside break can trigger rise towards 1.3707(23.6%fib).On the downside, immediate support is seen at 1.3597(50%fib), a break below could take the pair towards 1.3549 (61.8%fib).
USD/CAD: The Canadian dollar strengthened to a five-day high against the greenback on Wednesday as worries about the potential collapse of property developer China Evergrande receded, but gains were capped by a hawkish shift in guidance from the Federal Reserve. Dollar strengthened after U.S. central bank cleared the way to reduce its monthly bond purchases "soon" and signaled interest rate increases may follow more quickly than expected. U.S. crude futures were up 1.3% at $71.41 a barrel,while the Canadian dollar gained 0.1% to 1.2805 per greenback. Immediate resistance can be seen at 1.2796 (38.2%fib), an upside break can trigger rise towards 1.2834 (Higher BB).On the downside, immediate support is seen at 1.2725 (50%fib), a break below could take the pair towards 1.2701 (14DMA).
USD/JPY: The dollar edged higher against the Japanese yen on Wednesday after the US Federal Reserve signalled an earlier-than-expected interest rate hike and an easing of its bond purchases by mid-year next . Federal Reserve Chair Jerome Powell said tapering of bond purchases could be done by mid-2022 following a statement from the central bank that also signaled interest rate increases may follow more quickly than expected. Strong resistance can be seen at 109.89(23.6%fib), an upside break can trigger rise towards 110.29 (Higher BB).On the downside, immediate support is seen at 109.63 (5DMA), a break below could take the pair towards 109.51(38.2%fib).
Equities Recap
European stocks rose on Wednesday after debt-laden developer China Evergrande said it would make some interest payments, while investors awaited a signal from the U.S. Federal Reserve on how and when it will rein in its massive stimulus.
UK's benchmark FTSE 100 closed up by 1.47 percent, Germany's Dax ended up by 1.03 percent, France’s CAC finished the day up by 1.29 percent.
U.S. stocks added to gains on Wednesday after the Federal Reserve cleared the way to ease monthly bond purchases “soon” and signaled interest rate increases may follow more quickly than expected.
Dow Jones closed up by 1.00% percent, S&P 500 closed up by 0.95% percent, Nasdaq settled up by 1.02% percent.
Treasuries Recap
U.S. Treasury yields see-sawed on Wednesday after the Federal Reserve said it would reduce its monthly bond purchases "soon" and investors grappled with a timeline that suggested higher interest rates may follow more quickly than expected.
The yield on 10-year Treasury notes fell, rose and fell again in choppy trade. The benchmark note was last down 2 basis points at 1.304%, while yields at the longer end fell further.
Commodities Recap
Gold prices slipped in volatile trade on Wednesday after the U.S. Federal Reserve signalled a sooner-than-expected interest rate hike and easing of its bond purchases by the middle of next year.
Spot gold fell 0.4% to $1,767.38 per ounce by 1943 GMT, while U.S. gold futures settled up 0.03% to $1,778.80.
Oil prices settled higher on Wednesday after U.S. crude stocks fell to their lowest levels in three years as refining activity recovered from recent storms.
U.S. West Texas Intermediate (WTI) crude futures rose $1.74, or 2.5%, to $72.23, while Brent crude futures settled up $1.83, or 2.5%, to $76.19 a barrel.
