Market Roundup
•Canada Common CPI (YoY) 1.8%, 1.8% previous
•Canada Median CPI (YoY) 2.8%,2.6% previous
•Canada Trimmed CPI (YoY) 3.4%,3.3% previous
•Canada Sep CPI (MoM) 0.2%,0.1% forecast, 0.2% previous
•Canada Sep Core CPI (YoY) 3.7%,3.5% previous
•Canada Sep Core CPI (MoM) 0.3%,0.2% previous
•US Gasoline Inventories -5.368M,-1.267M forecast, -1.958M previous
•US Cushing Crude Oil Inventories -2.320M,-1.968M previous
•US Crude Oil Inventories -0.431M,1.857M forecast, 6.088M previous
Looking Ahead Economic Data (GMT)
•03:30 Australia Services PMI 44.9 previous
•04:30 Australia Manufacturing PMI 56.8 previous
•05:00 Japan National CPI (MoM) -0.2% previous
•05:00 Japan Sep National Core CPI (YoY) 0.1% forecast, -0.2% previous
•06:00 Japan Services PMI 47.8 previous
Looking Ahead - Events, Other Releases (GMT)
•00:30 Australia RBA Governor Lowe Speaks
Currency Summaries
EUR/USD: The euro strengthened on Wednesday as equities gains dimmed safe-haven demand for the U.S. currency and traders pruned Fed rate hike pricing. The greenback hit a one-year high against a basket of other currencies last week as market participants ramped up bets that the Fed will raise rates sooner than expected to quell rising price pressures. Those bets have faded, however, while investors are pricing for even more aggressive rate increases in other countries. Immediate resistance can be seen at 1.1658 (38.2%fib), an upside break can trigger rise towards 1.1708(50%fib).On the downside, immediate support is seen at 1.1592 (23.6%fib), a break below could take the pair towards 1.1500(Psychological level).
GBP/USD: Sterling traded near a one-month high against the dollar on Wednesday after traders said a dip in September inflation was unlikely to stop the Bank of England from raising interest rates soon. Consumer prices rose 3.1% in annual terms in September, easing back from 3.2% in August, official data showed. The pound fell in mid-European trading but was back at $1.3823 by 1830 GMT, up 0.2% on the day and close to a one-month high of $1.3834 reached on Tuesday. Immediate resistance can be seen at 1.3830(23.6%fib),an upside break can trigger rise towards 1.3905(Higher BB).On the downside, immediate support is seen at 1.3779(5DMA), a break below could take the pair towards 1.3750(38.2%fib).
USD/CAD : The Canadian dollar edged higher against its U.S. counterpart on Wednesday as domestic data showing an 18-year high for inflation supported the market's hawkish outlook for the Bank of Canada, offsetting a drop in oil prices. Canada’s annual inflation rate climbed to 4.4% in September, driven by rising transportation, shelter and food prices, data showed, putting the focus on the Bank of Canada ahead of a rate decision next week. The Canadian dollar was trading 0.1% higher at 1.2345 to the greenback , after trading in a range of 1.2336 to 1.2368. Immediate resistance can be seen at 1.2346 (5DMA), an upside break can trigger rise towards 1.2363 (38.2%fib).On the downside, immediate support is seen at 1.2303 (23.6%fib), a break below could take the pair towards 1.2244(Lower BB).
USD/JPY: The dollar strengthened against yen on Wednesday rally in global equity sapped demand for assets regarded as safe havens. The greenback hit a one-year high against a basket of other currencies last week as market participants ramped up bets that the Federal Reserve will raise rates sooner than expected to quell rising price pressures. Market participants are pricing for the Fed to raise rates twice by the end of 2022. The dollar index was last down 0.09% at 93.71. Strong resistance can be seen at 114.55(23.6%fib), an upside break can trigger rise towards 115.00(Psychological level).On the downside, immediate support is seen at 113.95(38.2%fib), a break below could take the pair towards 113.50(50%fib).
Equities Recap
European shares closed at six-week highs on Wednesday as strong results from Nestle boosted food company stocks, helping outweigh losses after a clutch of disappointing earnings including luxury group Kering and chipmaker ASML.
UK's benchmark FTSE 100 closed up by 0.08 percent, Germany's Dax ended up by 0.05 percent, France’s CAC finished the day up by 0.54 percent.
The S&P 500 and the Dow climbed on Wednesday with the Dow hitting an intraday record high as investors eyed better than expected third-quarter earnings from U.S. companies.
Dow Jones closed up by 0.43% percent, S&P 500 closed up by 0.37 % percent, Nasdaq settled down by 0.05 percent.
Treasuries Recap
U.S. long-dated Treasury yields rose on Wednesday after a weak auction of 20-year bonds, with the yield curve steepening for a second day and investors paring back aggressive monetary tightening bets from the Federal Reserve.
In afternoon trading, the benchmark 10-year note yield was up one basis point at 1.6461%. The U.S. 5-year yield, which reflects monetary policy expectations, was last down at 1.1538%. U.S. 20-year yields rose to one-week highs of 2.106%, and were last up 3 basis points at 2.1003%.
Commodities Recap
Oil prices rallied on Wednesday after U.S. crude inventories at the nation's largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.
Brent crude futures settled at $85.82 a barrel, a gain of 0.9% or 74 cents and the highest since October 2018.
November U.S. West Texas Intermediate (WTI) crude , which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1%. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.
Gold prices jumped on Wednesday, after the U.S. dollar weakened, as worries over rising inflation and supply chain issues boosted the safe-haven metal’s appeal.
Spot gold rose 0.9% to $1,785.25 per ounce by 14:00 ET (1800 GMT). U.S. gold futures for December settled up 0.8% at $1,784.90 per ounce.
