Market Roundup
•U.S. CPI due at 1330 GMT
• Portuguese CPI (YoY) (Nov) 2.5%, 2.5% forecast, 2.3% previous
•Portuguese CPI (MoM) (Nov) -0.2% ,-0.2% forecast, 0.1% previous
Looking Ahead Economic Data (GMT)
• 13:30 US Core CPI (MoM) (Nov) 0.3% forecast, 0.3% previous
• 13:30 US Core CPI (YoY) (Nov) 3.3% forecast, 3.3% previous
• 13:30 US Core CPI Index (Nov) 322.41 forecast, 321.67 previous
• 13:30 US CPI (MoM) (Nov) 0.3% forecast, 0.2% previous
• 13:30 US CPI (YoY) (Nov) 2.7% forecast, 2.6% previous
• 13:30 US CPI Index, n.s.a. (Nov) 315.37 forecast, 315.66 previous
• 13:30 US CPI Index, s.a. (Nov) 315.45 previous
• 13:30 US CPI, n.s.a (MoM) (Nov) 0.12% previous
• 13:30 US Real Earnings (MoM) (Nov) 0.1% previous
•14:45 Canada BoC Interest Rate Decision 3.25% forecast, 3.75% previous
•15:30 US Crude Oil Inventories -1.000M forecast, -5.073M previous
•15:30 US EIA Refinery Crude Runs (WoW) 0.615M previous
•15:30 US Crude Oil Imports 1.635M previous
•15:30 US Cushing Crude Oil Inventories 0.050M previous
•15:30 USD Gasoline Inventories -0.200M forecast, 2.362M previous
•16:00 US Cleveland CPI (MoM) (Nov) 0.3% previous
Looking Ahead Events And Other Releases (GMT)
•14:45 Canada BoC Rate Statement
•15:30 Canada BOC Press Conference
Currency Forecast
EUR/USD: The euro fell against the dollar on Wednesday as markets awaited U.S. inflation data and the European Central Bank's decision on interest rates. Economists predict both headline and core consumer prices to climb by 0.3% in November, up from prior gains of 0.2% and 0.3%, respectively. 90% of economists surveyed expect the Fed to cut rates by 25 basis points on December 18, with the majority forecasting a pause in late January owing to inflation worries. Markets are also awaiting a European Central Bank interest rate decision on Thursday. The bank is widely expected to deliver a quarter-point cut, which would widen the rate differential between the euro and central European currencies. Immediate resistance can be seen at 1.0605(38.2%fib), an upside break can trigger rise towards 1.0637(30SMA).On the downside, immediate support is seen at 1.0458(23.6%fib), a break below could take the pair towards 1.0417(Lower BB).
GBP/USD: The British pound fell on Wednesday as investors focused on the US consumer price index data , which could provide insight into the pace of Federal Reserve interest rate decreases. The Bank of England is anticipated to keep interest rates unchanged next week, taking a slower approach to decreasing borrowing costs than central banks in Europe and the United States. The BoE remains concerned about price pressures in Britain's labour market, which have eased more clearly in other countries. Having only dropped the Bank Rate twice from a 16-year peak, the BoE's conservative policy has helped make sterling the only currency in the Group of 10 main countries that has not depreciated versus the US dollar in 2024.Immediate resistance can be seen at 1.2866(Higher BB), 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 slipped lower on Wednesday as the Reserve Bank of Australia's dovish stance continued to weigh on the currency. On Tuesday, the Reserve Bank of Australia (RBA) opted to leave interest rates at 4.35% while softening its earlier hawkish position by deleting a reference to the need to keep policy tight. With two labour market and retail sales data, one quarterly CPI, and two monthly CPI releases scheduled between now and its February 17-18 meeting, the RBA will be well-positioned to make an educated decision. Market pricing of a 25 basis-point rate cut in February has grown to 61% from approximately 54% prior to the RBA meeting, with the first cut now fully priced for April and two by May.Immediate resistance can be seen at 0.6392(Daily high), an upside break can trigger rise towards 0.6409(38.2%fib).On the downside, immediate support is seen at 0.6343(23.6%fib), a break below could take the pair towards 0.6326(Lower BB).
USD/JPY: The dollar rose against the yen on Wednesday as trader’s feared U.S. inflation data due later in the day could come in hotter than expected and disrupt bets on a Fed rate cut this month. Economists expect both headline and core consumer prices to have risen 0.3% in November from previous increases of 0.2% and 0.3%, respectively. On the data front, Japan’s corporate goods price index (CGPI), which tracks the prices companies charge each other for goods and services, rose 3.7% year-on-year last month, surpassing the market forecast of a 3.4% increase and marking the fastest annual rise since July 2023. Market-implied odds for a quarter-point rate hike by the BOJ on December 19 were last at 27%. Immediate resistance can be seen at 152.00 (Psychological level) an upside break can trigger rise towards 152.71 (23.6%fib). On the downside, immediate support is seen at 150.92(Dec 10th low) a break below could take the pair towards 150.53(38.2%fib).
Equities Recap
European stocks gained on Wednesday ahead of the U.S. inflation reading that is expected to leave the Federal Reserve on course to cut rates again.
At GMT 13:04 ,UK's benchmark FTSE 100 was last up by 0.25 percent, Germany's Dax was last up by 0.05 percent, France’s CAC was last up by 0.28 percent.
Commodities Recap
Gold prices remained steady on Wednesday as investors awaited U.S. inflation data, which could impact the chances of a Federal Reserve interest rate cut next week and provide insights into the central bank's 2025 outlook.
Spot gold held steady at $2,695.91 per ounce as of 1216 GMT, after reaching its highest level since Nov. 25 earlier in the session. U.S. gold futures climbed 0.4% to $2,727.80.
Oil prices rose 1% on Wednesday as investors expected an increase in demand from China, the world's top importer, following Beijing's recent plans to stimulate economic growth.
Brent crude futures gained 75 cents, or 1.04%, to $72.94 a barrel by 1011 GMT, while U.S. West Texas Intermediate crude futures rose 75 cents, or 1.09%, to $69.34.
