Market Roundup
• Australia GDP (YoY) (Q3): 0.8%, 1.1% forecast, 1.0% previous
• Australia GDP Capital Expenditure (Q3): 1.5%, 0.2% previous
• Australia GDP Chain Price Index (Q3): -0.2%, -0.9% previous
• Australia GDP Final Consumption (Q3): 0.4%, 0.3% previous
• Japan Services PMI (Nov): 50.5, 50.2 forecast, 49.7 previous
• China Caixin Services PMI (Nov): 51.5, 52.5 forecast, 52.0 previous
Looking Ahead Economic Data (GMT)
•08:45 Italian Composite PMI (Nov): 51.0
•08:45 Italian Services PMI (Nov): 51.1, 52.4 previous
•08:45 French Government Budget Balance (Oct): -173.8B
•08:50 French S&P Global Composite PMI (Nov): 44.8 forecast, 48.1 previous
•08:50 French Services PMI (Nov): 45.7 forecast, 49.2 previous
•08:55 German Composite PMI (Nov): 47.3 forecast, 48.6 previous
•08:55 German Services PMI (Nov): 49.4 forecast, 51.6 previous
•09:00 RUB Russian Forex Intervention (Dec): 87.5B
•09:00 EU S&P Global Composite PMI (Nov): 48.1, 50.0 previous
•09:00 EU Services PMI (Nov): 49.2 forecast, 51.6 previous
•09:30 UK Composite PMI (Nov): 49.9 forecast, 51.8 previous
•09:30 UK Services PMI (Nov): 50.0 forecast, 52.0 previous
•10:00 UK 30-Year Treasury Gilt Auction: 4.735% previous
•10:00 UK 7-Year Treasury Gilt Auction: 3.988% previous
•:00 German Car Registration (YoY): 6.0% previous
•10:00 EU PPI (MoM) (Oct): 0.4% forecast, -0.6% previous
Looking Ahead Events And Other Releases (GMT)
•09:00 BoE Gov Bailey Speaks
Currency Forecast
EUR/USD: The euro slightly increased on Wednesday as traders anticipated additional labor market data for insights into the direction of Federal Reserve policy. French legislators prepare to cast their votes on no-confidence motions on Wednesday, which could end the delicate coalition government. The discussion is set to begin at 4 p.m. (1500 GMT), with voting anticipated approximately three hours afterward, according to parliament officials. President Emmanuel Macron is scheduled to come back to France today after a state visit to Saudi Arabia. Attention also shifted to Fed Chair Jerome Powell, who is set to deliver what are anticipated to be his final public comments before the meeting on Wednesday. The single currency has decreased by 4% since early November, as investors began preparing for the anticipated tariff-laden policies from the incoming Trump administration .Immediate resistance can be seen at 1.0511(SMA 9), an upside break can trigger rise towards 1.0568(38.2%fib).On the downside, immediate support is seen at 1.0478(23.6%fib), a break below could take the pair towards 1.0358(Lower BB).
GBP/USD: The pound edged higher on Wednesday but gains were limited as investors awaited U.S. jobs report later this week for further clues US monetary policy outlook. Data on Tuesday showed that U.S. job openings increased moderately in October while layoffs declined. A strong jobs report could lead the Fed to be cautious about cutting rates. The U.S. ADP employment report is due at 1315 GMT, ahead of the payrolls report on Friday. Powell is also scheduled to speak later in the day in what is expected to be his last public remarks before the Fed's December meeting. According to the CME Group's FedWatch Tool, traders see about a 73% chance of a 25-basis-point reduction by the Fed this month, with 80 bps of cuts expected by the end of 2025.Immediate resistance can be seen at 1.2735(50%fib), an upside break can trigger rise towards 1.2789 (SMA 30).On the downside, immediate support is seen at 1.2629(38.2%fib), a break below could take the pair towards 1.2507(23.6%fib).
AUD/USD: The Australian dollar tumbled to a four-month low on Wednesday after weaker-than-expected economic growth raised expectations for earlier interest rate cuts. Australia’s economy in the third quarter grew at the slowest annual pace since the pandemic, disappointing hopes for a rebound as government spending did all of the heavy lifting and consumers remained cautious. Data from the Australian Bureau of Statistics (ABS) on Wednesday showed real gross domestic product rose 0.3% in the September quarter, missing market forecasts of 0.4%.Investors reacted by pushing the Australian dollar 0.7% lower to $0.6442. Markets moved to almost fully price in a rate cut next April at 96% from 73% before, and see a 35 basis points easing for May, from 28 bps before. Immediate resistance can be seen at 0.6483(38.2%fib), an upside break can trigger rise towards 0.6491(Daily high).On the downside, immediate support is seen at 0.6406(23.6%fib), a break below could take the pair towards 0.63826(Lower BB).
USD/JPY: The dollar strengthened against the yen on Wednesday after media reports raised doubts about market expectations that the Bank of Japan (BOJ) would hike interest rates this month. Analysts pointed to reports suggesting that the BOJ may skip a rate hike at its upcoming Dec. 18-19 monetary policy meeting. While BOJ Governor Kazuo Ueda had recently indicated that the timing of the next interest rate hike was "approaching," which had fueled growing bets for a rate increase, the media reports on Wednesday suggested the central bank could adopt a more cautious stance in its December meeting.As a result, market expectations for a rate hike in December shifted lower, with the likelihood of a rate increase now seen at 42%, down from around 60% earlier in the week. This uncertainty surrounding the BOJ's policy outlook weighed on the yen, contributing to the dollar's strength. Immediate resistance can be seen at 150.15 (38.2%fib) an upside break can trigger rise towards 150.97 (50%fib). On the downside, immediate support is seen at 149.07(50%fib) a break below could take the pair towards 148.41(Lower BB).
Equities Recap
Asian equities fell on Wednesday as traders navigated the political turmoil in South Korea, where martial law was imposed and then lifted just hours later.
Japan's tech-heavy Nikkei N225 gained 0.06% , and South Korea's KOSPI dipped by 1.29%. China’s A50 dipped by 1.17%.
Commodities Recap
Gold prices inched higher on Wednesday, supported by safe-haven demand, as markets awaited U.S. jobs data and comments from Federal Reserve Chair Jerome Powell for insights into the future path of interest rate cuts.
Spot gold rose 0.2% to $2,649.09 per ounce, as of 0555 GMT. U.S. gold futures added 0.1% to $2,671.20.
Oil prices surged over 2% on Tuesday following Israel's threat to strike Lebanon if its truce with Hezbollah collapses, and amid investor expectations that OPEC+ will announce an extension of its supply cuts this week.
Brent crude futures posted their biggest gains in two weeks, rising by $1.79, or 2.5%, to settle at $73.62 a barrel. U.S. West Texas Intermediate crude futures also rose the most since Nov. 18, gaining $1.84, or 2.7%, to close at $69.94 per barrel.
