Market Roundup
• US Dec Services PMI 54.8, 55.3 forecast, 58.4 previous
• US Dec Markit Composite PMI 55.3, 55.7 forecast, 58.6 previous
• Brazil Foreign Exchange Flows -8.353B,-4.955B previous
• US Nov Factory Orders (MoM) 1.0%,0.7% forecast, 1.0% previous
• US Nov Durables Excluding Defense (MoM) 0.8%, 0.7% previous
• US Factory orders ex transportation (MoM ) 0.8%,1.0% previous
• US Gasoline Inventories-1.181M, 1.525M forecast, -1.192M previous
• US Crude Oil Inventories -8.010M,-2.133M forecast, -6.065M previous
Looking Ahead - Economic Data (GMT)
•23:30 Japan Nov Overall wage income of employees -0.7% previous
•23:30 Japan Nov Overtime Pay (YoY) -12.00% previous
•23:30 Japan Average Cash Earnings (YoY) -0.8% previous
•23:49 Japan Foreign Bonds Buying 802.4B previous
•23:49 Japan Foreign Investments in Japanese Stocks -504.3B previous
•05:00 Japan Nov Overall wage income of employees -0.7% previous
•05:00 Japan Overtime Pay (YoY) -12.00% previous
•05:00 Japan Average Cash Earnings (YoY) -0.8% previous
•05:00 Japan Foreign Bonds Buying 802.4B previous
•05:00 Japan Foreign Investments in Japanese Stocks -504.3B previous
•06:00 Australia Nov Trade Balance 6.000B forecast, 7.456B previous
•06:00 Australia Nov Building Approvals (MoM) 2.5% forecast, 3.8% previous
•06:00 Australia Nov 5% previous
•06:00 Australia Nov Private House Approvals 3.1% previous
Looking Ahead - Economic events and other releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro strengthened against dollar on Wednesday after Democrats won Senate runoff race in Georgia that may signal more fiscal spending. Democrats won one hotly contested U.S. Senate race in Georgia and pulled ahead in the second by 1200 GMT, edging closer to control of the chamber. Democratic challenger Raphael Warnock beat Republican incumbent Kelly Loeffler in one of two Senate races in the state. The euro was up 0.11% to $1.2329, after earlier having tested major resistance at $1.2349.Immediate resistance can be seen at 1.2349 (Daily high), an upside break can trigger rise towards 1.2380(Lower BB).On the downside, immediate support is seen at 1.2305(23.6%fib), a break below could take the pair towards 1.2277 (5DMA).
GBP/USD: Sterling fell on Wednesday as the U.S. dollar bounced off earlier lows after the Democrats took the lead in runoff votes that will determine control of the U.S. Senate.A Democrat-controlled Senate is seen by some financial market analysts as helping global economic growth and favouring riskier assets, while negative for bonds and the dollar as the U.S. budget and trade deficits would be likely to grow.The pound fell 0.1 to $1.3605 versus a rebounding dollar, but was still close to a May 2018 high of $1.37 which the British currency tested on Monday. Immediate resistance can be seen at 1.3684 (23.6%fib), an upside break can trigger rise towards 1.3759 (Higher BB).On the downside, immediate support is seen at 1.3597 (38.2%fib), a break below could take the pair towards 1.3529 (50%fib).
USD/CAD: The Canadian dollar fell against its broadly stronger U.S. counterpart on Wednesday, pulling back from a near three-year high hit earlier in the day when markets priced in a Democrat win in the U.S. Senate run-off election in Georgia. On Tuesday, the loonie notched its biggest gain since June. U.S. bond yields rose and tech stocks fell on Wednesday on the prospect of more stimulus and tougher regulation if Democrats take control of the U.S. Senate following the Georgia election. The loonie was trading 0.3% lower at 1.2704 to the greenback . It touched its strongest intraday level since April 2018 at 1.2630 before turning lower. Immediate resistance can be seen at 1.2704 (5DMA), an upside break can trigger rise towards 1.2733 (38.2%fib).On the downside, immediate support is seen at 1.2657 (23.6% fib), a break below could take the pair towards 1.2602(Lower BB).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday markets anticipated Democrat win in the U.S. Senate election in Georgia would clear the path for a larger fiscal stimulus package. Democrats won one U.S. Senate race in Georgia and led in another on Wednesday, edging closer to a sweep in a previous Republican stronghold that would hand them control of Congress and the power to advance President-elect Joe Biden’s policy goals.Strong resistance can be seen at 103.19(50%fib), an upside break can trigger rise towards 103.43 (61.8%fib).On the downside, immediate support is seen at 102.94(38.2%fib), a break below could take the pair towards 102.61 (23.6%fib).
Equities Recap
European stocks rose on Wednesday, with economically sensitive sectors such as energy and banks leading the gains, as investors braced for a Democratic win in crucial U.S. Senate run-off election in Georgia that could drive bigger fiscal stimulus.
UK's benchmark FTSE 100 closed up by 3.46 percent, Germany's Dax ended up by 1.71 percent, France’s CAC finished the day up by 1.19 percent.
The Dow and the S&P 500 ended higher, soaring to all-time highs on Wednesday, as investors piled into financial and industrial stocks on bets a Democratic sweep in Georgia would lead to more fiscal stimulus and infrastructure spending.
Dow Jones closed up by 1.44% percent, S&P 500 closed up by 1.75 % percent, Nasdaq settled down by 0.61% percent.
Treasuries Recap
Runoff elections in Georgia that eventually gave Democrats control of the U.S. Senate hoisted the 10-year U.S. Treasury note yield on Wednesday over the 1% level for the first time since March before the rise was tempered by the swarming of the U.S. Capitol by pro-Trump protesters.
The 30-year yield also reached levels last touched in March. It was last up 10.2 basis points at 1.8057%.
Commodities Recap
Gold tumbled more than 2% on Wednesday, hit by a rebound in the dollar as U.S. Treasury yields surged, showing that investors are betting on a Democrat win in the U.S. Senate runoff elections in Georgia.
Spot gold was down 2.2% at $1,907.21 per ounce at 11:52 a.m. EST (1652 GMT), having earlier hit a near two-month peak at $1,959.01. U.S. gold futures dropped 2.3% to $1,909.10.
Oil prices rose to their highest levels since February on Wednesday after Saudi Arabia announced a big voluntary production cut and on a steep fall in U.S. crude inventories.
Brent crude settled up 70 cents, or 1.3%, at $54.30 a barrel. Earlier in the session, it hit a high of $54.73 a barrel, a level not seen since Feb. 26, 2020.
U.S. West Texas Intermediate (WTI) futures settled 70 cents higher, or 1.4%, at $50.63 a barrel. The contract touched $50.94 a barrel, its highest since late February.
