Market Roundup
•Fed keeps rates in 3.50%-3.75% range
•Yen weakens near intervention levels
• US Building Permits (Feb): 1.538M, 1.386M previous
• US Housing Starts (Feb): 1.356M, 1.398M previous
• US Housing Starts (MoM) (Feb): -3.0%, 7.2% previous
• US Building Permits (MoM) (Feb): 10.9%, -4.7% previous
• US Housing Starts (MoM) (Mar): 10.8%, 1.8% previous
• US Housing Starts (Mar): 1.502M, 1.380M previous
• US Building Permits (Mar): 1.372M, 1.386M previous
• US Retail Inventories Ex Auto (Mar): 0.5%, 0.4% previous
• US Goods Trade Balance (Mar): -87.87B, -87.50B previous
• US Durable Goods Orders (MoM) (Mar): 0.8%, 0.4% previous
• US Core Durable Goods Orders (MoM) (Mar): 0.9%, 0.4% previous
• US Building Permits (MoM) (Mar): -10.8%, -4.7% previous
• US Goods Orders Non Defense Ex Air (MoM) (Mar): 3.3%, 0.5% previous
• US Durables Excluding Defense (MoM) (Mar): -0.3%, -1.2% previous
• US Wholesale Inventories (MoM) (Mar): 1.4%, 0.4% previous
• Canada BoC Interest Rate Decision: 2.25%, 2.25% previous
• US Fed Interest Rate Decision 3.75%, 3.75% forecast, 3.75% previous
Looking Ahead Economic Data (GMT)
•02:30 China Manufacturing PMI (Apr): 50.1 forecast, 50.4 previous
•02:30 China Non-Manufacturing PMI (Apr): 49.9 forecast, 50.1 previous
•02:30 China Composite PMI (Apr): 50.5 previous
•02:30 Australia Private Sector Credit (MoM) (Mar): 0.6% forecast, 0.6% previous
•02:30 Australia Housing Credit (Mar): 0.6% previous
•02:30 Australia Import Price Index (QoQ) (Q1): 0.4% forecast, 0.9% previous
•02:30 Australia Export Price Index (QoQ) (Q1): 3.2% previous
•02:30 China Caixin Manufacturing PMI (Apr): 50.9 forecast, 50.8 previous
•06:00 Japan Household Confidence (Apr): 32.8 forecast, 33.3 previous
•06:00 Japan Housing Starts (YoY) (Mar): -28.7% forecast, -4.9% previous
•06:00 Japan Construction Orders (YoY) (Mar): 42.7%
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro dipped on Wednesday as dollar strengthened after the U.S. Federal Reserve left interest rates unchanged.The Fed’s 8–4 vote marked its most divided decision since 1992, underscoring the challenge incoming Fed Chair Kevin Warsh will face in pushing for rate cuts. Current Chair Jerome Powell’s term ends on May 15.Speaking at a press conference, Powell said that despite dissent from four officials who opposed maintaining an easing bias, he does not see the Fed tilting toward raising interest rates. Following the verdict, traders in short-term U.S. interest-rate futures bet on the likelihood of the Fed leaving rates unchanged for the rest of this year, while expectations increased for a rate hike by April 2027. The euro slipped 0.35% to $1.167150. Immediate resistance can be seen at 1.1705(SMA 20), an upside break can trigger rise towards 1.1800(Psychological level).On the downside, immediate support is seen at 1.1672(50%fib), a break below could take the pair towards 1.1576(38.2%fib).
GBP/USD: Sterling slipped on Wednesday after Fed left benchmark overnight interest rate in 3.50%-3.75% range.Fed's policy statement revealed the decision to hold rates steady was its most divided since 1992, along with uncertainties concerning rising energy prices due to turmoil in the Middle East.It was likely the Fed's last policy meeting under Powell, who vowed at the subsequent press conference that he would stay on as governor. Speaking after the end of a two-day policy meeting, Powell said he would "keep a low profile as a governor," and did not intend to act as a disruptive "high-profile dissident" under his designated successor, Kevin Warsh, whose nomination to lead the Fed cleared the Senate Banking Committee on Wednesday and could be confirmed by the full Senate as soon as two weeks from now, just before Powell's term as central bank chief ends on May 15.Immediate resistance can be seen at 1.3541(50%fib ), an upside break can trigger rise towards 1.3577(April 27th high).On the downside, immediate support is seen at 1.3477(SMA 20), a break below could take the pair towards 1.3395(61.8%fib).
USD/CAD: The Canadian dollar steadied against its U.S. counterpart on Wednesday as the greenback posted broad-based gains and a jump in oil prices raised prospects of multiple Bank of Canada interest rate hikes this year.The Bank of Canada kept its key interest rate unchanged at 2.25%, as expected. The bank said any changes in the rate could be small if its projections for the economy hold true, but if oil prices stayed high and began pushing up inflation, it might have to respond with consecutive rate hikes.Investors were pricing in 59 basis points in tightening this year, up from 39 basis points before the policy decision, swap market data showed. The U.S. price of oil , one of Canada's major exports, settled nearly 7% higher at $106.88 a barrel as deadlocked U.S.-Iran negotiations made investors more concerned about prolonged disruptions to Middle Eastern supply. Immediate resistance can be seen at 1.3735(50%fib), an upside break can trigger rise towards 1.3751(SMA 20).On the downside, immediate support is seen at 1.3622(38.2%fib), a break below could take the pair towards 1.3568(Lower BB)
USD/JPY: The U.S. dollar edged higher on Wednesday as yen weakened despite the Bank of Japan hinting after its policy meeting on Tuesday at a strong chance of a rate hike in coming months. . The Japanese currency has fallen about 0.6% against the dollar and more than 2% since the war began, partly reflecting Japan’s vulnerability to higher imported energy costs. The BOJ kept its policy rate unchanged at 0.75%, but a rare 6–3 split - the widest since Ueda took office - fueled expectations of a possible rate hike as early as June.BOJ Gov Kazuo Ueda reaffirmed the central bank’s commitment to a gradual tightening path, indicating that interest rates could continue to rise in line with evolving economic, inflation, and financial condition. The Japanese yen was last down 0.49% at 160.40 per dollar .Immediate resistance can be seen at 160.50(23.6%fib) an upside break can trigger rise towards 161.00(Psychological Level) .On the downside, immediate support is seen at 159.13(38.2%fib) a break below could take the pair towards 158.85(38.2%fib).
Equities Recap
European shares slid to a three-week low on Wednesday amid mixed corporate results and data pointing to the economic damage caused by the Iran war, with investors cautious ahead of key global monetary policy decisions.
UK's benchmark FTSE 100 closed down by 1.16 percent, Germany's Dax ended down by 0.27 percent, France’s CAC finished the day down by 0.39 percent.
Wall Street oscillated on Wednesday, as investors juggled spiking crude prices, the U.S. Federal Reserve's interest-rate decision.
Dow Jones closed down by 0.57 percent, S&P 500 closed down by 0.04 percent, Nasdaq settled up by 0.04 percent.
Commodities Recap
Gold prices fell for a third straight session on Wednesday, as inflation worries tied to the ongoing conflict in the Middle East clouded the outlook for monetary policy.
Spot gold was down 1% at $4,550.39 per ounce, by 11:37 a.m. EDT (1537 GMT), after hitting a one-month low. U.S. gold futures fell 1% to $4,563.30.
Oil prices surged over 6% on Wednesday to settle at their highest in weeks, as deadlocked U.S.-Iran negotiations made investors more concerned about prolonged disruptions to Middle Eastern supply.
Brent crude futures for June rose for the eighth consecutive session and settled up $6.77, or 6.1%, at $118.03 a barrel, the highest since March 31. The global benchmark climbed further in post-settlement trade to hit $120 a barrel for the first time since June 2022.
U.S. West Texas Intermediate futures for June rose $6.95, or 7%, to $106.88 a barrel, the highest since April 7.
