Market Roundup
•US Wholesale Inventories (MoM) 0.6%,0.8% forecast, 0.8% previous
• US Sep Wholesale Trade Sales (MoM) 0.4%, 0.4% forecast, 0.1% previous
• US Gasoline Inventories -0.899M, -1.080M forecast ,-1.257M previous
• US Heating Oil Stockpiles -0.217M,-0.383M previous
• US Cushing Crude Oil Inventories 3.925M, 1.360M forecast , -3.115M previous
• US Cushing Crude Oil Inventories -0.923M , 1.267M previous
Looking Ahead - Events, Other Releases (GMT)
• 00:00 Australia MI Inflation Expectations 5.4% previous
• 00:00 UK Oct RICS House Price Balance 20% forecast , 32% previous
•00:30 Australia ANZ Job Advertisements (MoM) -0.5% previous
Currency Summaries
EUR/USD: The euro dipped on Wednesday as investors awaited both the results of the U.S. midterm elections and key data on consumer prices that could impact the Federal Reserve's policy on interest rates. U.S. CPI data due Thursday will consequently be closely watched, especially after last week's Federal Reserve meeting caused markets to reposition for an even higher peak in U.S. rates. The euro was little changed at $1.0061, just off the $1.0096 hit overnight, its highest since Sept. 13. Immediate resistance can be seen at 1.0100(23.6%fib), an upside break can trigger rise towards 1.0149 (Higher BB).On the downside, immediate support is seen at 0.9990(38.2%fib), a break below could take the pair towards 0.9930 (9DMA).
GBP/USD: The British pound fell on Wednesday as investors focused on U.S. inflation figures and the midterm elections. As the race heats for control of U.S. Congress, markets are expecting Republican gains, a result that will likely temper Democratic spending and regulation but set up a tough fight over raising the U.S. debt ceiling next year. A split Congress is also viewed as a more favourable outcome for financial markets. U.S. consumer price index (CPI) inflation data for October is due out on Thursday. Global investors will scrutinise it for its implications for Federal Reserve interest rate policy. Immediate resistance can be seen at 1.1406(9DMA), an upside break can trigger rise towards 1.1496(23.6%fib).On the downside, immediate support is seen at 1.1327(9DMA), a break below could take the pair towards 1.1304(23.6%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from a seven-week high, as volatility in the cryptocurrency market weighed on investor sentiment. Investors fretted about the financial health of major cryptocurrency exchange FTX, with some questioning whether a rescue deal from bigger rival Binance would materialize. Investors were shifting focus to U.S. inflation data on Thursday for clues on the path of future interest rate hikes by the Federal Reserve. The loonie weakened 0.7% to 1.3528 per greenback , after trading in a range of 1.3412 to 1.3541.Immediate resistance can be seen at 1.3573 (9DMA), an upside break can trigger rise towards 1.3637 (23.6%fib).On the downside, immediate support is seen at 1.3504 (38.2%fib), a break below could take the pair towards 1.3403 (50%fib).
USD/JPY: The dollar strengthened against the yen on Wednesday as investors braced for U.S. inflation data due this week and awaited the results of the midterm elections that could signify a power shift in Washington. Results of the elections will decide whether the Democrats lose or retain congressional control halfway through President Joe Biden's term, with investors expecting Republican gains. U.S. consumer price index (CPI) data for October is due Thursday, with economists expecting a deceleration in both the monthly and yearly core inflation to 0.5% and 6.5%, respectively. Strong resistance can be seen at 147.15(23.6%fib), an upside break can trigger rise towards 147.91(21DMA).On the downside, immediate support is seen at 145.66 (50%fib), a break below could take the pair towards 144.38(61.8%fib).
Equities Recap
European shares snapped a three-day advance on Wednesday, weighed down by economically sensitive stocks, amid uncertainty over the outcome of the U.S. midterm elections and on concerns about rising inflation.
The UK's benchmark FTSE 100 closed down by 0.14 percent, Germany's Dax ended down by 0.16 percent, and France’s CAC finished the day down by 0.17 percent.
Wall Street ended sharply lower on Wednesday as Republican gains in midterm elections appeared more modest than some expected, with investors also focusing on upcoming inflation data that will provide clues about the severity of future interest rate hikes.
Dow Jones closed down by 1.95 percent, S&P 500 ended down by 2.08 percent, Nasdaq finished the down by 2.48 percent.
Treasuries Recap
U.S. Treasury yields were little changed to slightly lower in choppy trading on Wednesday as results for the midterm elections so far have not shown the widely anticipated sweeping "red wave" Republican victory, leaving investors to focus on upcoming inflation data.
The yields on the benchmark 10-year note were little changed at 4.123%, while those on the two-year note, which tend to reflect U.S. rate move expectations, were down 1.5 basis points (bps) 4.657%.
Commodities Recap
Gold dipped on Wednesday, as an uptick in the dollar nudged prices off an over one-month high, while investors awaited the release of key U.S. inflation data.
Spot gold fell 0.4% to $1,705.84 per ounce by 02:29 p.m. ET (1929 GMT). U.S. gold futures settled 0.1% lower at $1,713.70.
Oil prices sank by roughly $3 a barrel on Wednesday after industry data showed that U.S. crude stockpiles rose more than expected and on concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand.
Brent crude futures settled at $92.65 a barrel, shedding $2.71, or 2.8%, while U.S. West Texas Intermediate (WTI) crude futures settled at $85.83 a barrel, dropping $3.08, 3.5%. The benchmarks fell around 3% on Tuesday.
