Market Roundup
•French CPI (YoY) 0.0%,0.2% forecast
•French Dec HICP (MoM) 0.2%,0.2% forecast, 0.2% previous
• French Dec CPI (MoM) 0.2%, 0.2% forecast, 0.2% previous
• Italian Dec Services PMI 39.7, 45.3 forecast, 39.4 previous
• Italian Dec Composite PMI 43.0, 42.7 previous
• French Dec Services PMI 49.1, 49.2 forecast, 38.8 previous
• German Dec Services PMI 47.0, 47.7 forecast, 46.0 previous
• German Dec Composite PMI 52.0, 52.5 forecast, 51.7 previous
• EU Dec Services PMI 46.4, 47.3 forecast, 41.7 previous
• EU Dec Markit Composite PMI 49.1, 49.8 forecast, 45.3 previous
• UK Dec Composite PMI 50.4, 50.7 forecast, 49.0 previous
• UK Services PMI 49.4, 49.9 forecast, 47.6 previous
• EU Nov PPI (YoY) -1.9%, -2.2% forecast, -2.0% previous
• EU Nov PPI (MoM ) 0.4%,0.1% forecast, 0.4% previous
• German Dec CPI (MoM) 0.5%,0.6% forecast, -0.8% previous
Looking Ahead – Economic Data (GMT)
• 14:45 US Dec Services PMI 55.3 forecast, 58.4 previous
• 14:45 US US Dec Markit Composite PMI 55.7 forecast, 58.6 previous
• 15:00 Brazil Foreign Exchange Flows -4.955B previous
• 15:00 US Nov Factory Orders (MoM) 0.7% forecast, 1.0% previous
• 15:00 US Nov Durables Excluding Defense (MoM) 0.7% previous
• 15:00 US Factory orders ex transportation (MoM ) 1.0% previous
• 15:30 US Gasoline Inventories 1.525M forecast, -1.192M previous
• 15:30 US Crude Oil Inventories -2.133M forecast, -6.065M previous
Looking Ahead - Economic events and other releases (GMT)
• 19:00 US FOMC Meeting Minutes
Fx Beat
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. Immediate resistance can be seen at 1.2360 (Higher BB), an upside break can trigger rise towards 1.2400(Psychological level).On the downside, immediate support is seen at 1.2275 (38.2%fib), a break below could take the pair towards 1.2230 (10DMA).
GBP/USD: Sterling edged higher for a second consecutive session on Wednesday as the U.S. dollar weakened after Democrats took the lead in runoff votes that will determine control of the U.S. Senate.Market watchers believe a Democrat-controlled Senate would help economic growth globally and thus most riskier assets, but drag down bonds and the dollar as the U.S. budget and trade deficits would be likely to grow.The British pound edged 0.1% higher to $1.3621 versus a struggling dollar, close to a May 2018 high of $1.37 tested on Monday.Immediate resistance can be seen at 1.3682 (100 DMA), an upside break can trigger rise towards 1.3759 (Higher BB).On the downside, immediate support is seen at 1.3616 (38.2%fib), a break below could take the pair towards 1.3546 (50%fib).
USD/CHF: The dollar declined against the Swiss franc on Wednesday as the possibility of Democrats gaining control of the Senate weakened dollar. Democratic challenger Raphael Warnock won a hotly contested Senate race in Georgia over Republican incumbent Kelly Loeffler, while Democrat Jon Ossoff held a narrow lead over incumbent Republican David Perdue in the other race. Immediate resistance can be seen at 0.8843(38.2%fib), an upside break can trigger rise towards 0.8857 (11DMA).On the downside, immediate support is seen at 0.8766 (Lower BB), a break below could take the pair towards 0.8700(Psychological level).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday as traders looked to the outcome of a Senate election in Georgia to drive the next move in market sentiment . Democrats control of the Senate, creating a 50-50 split and giving Vice President-elect Kamala Harris the tie-breaking vote once she and Biden take office on Jan. 20. The party already has a narrow majority in the U.S. House of Representatives.At (GMT 12:30), the yen was last down 0.35 % at 102.89. 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.
At (GMT 12:30 ),UK's benchmark FTSE 100 was last trading up at 3.31 percent, Germany's Dax was up by 0.90 percent, France’s CAC finished was up by 0.80 percent.
Commodities Recap
Gold prices hit a fresh two-month high on Wednesday as the dollar slid on growing expectations of a Democratic win in the U.S. Senate run-off election in Georgia, which would likely lead to additional fiscal stimulus.
Spot gold was up 0.4% to $1,956.86 per ounce at 1029 GMT, having hit a near two-month peak at $1,959.01 earlier in the session. U.S. gold futures were up 0.3% to $1,960.40.
Oil prices extended gains on Wednesday, rising to their highest since late February, after Saudi Arabia announced a big voluntary production cut, and as an industry report showed U.S. inventories fell last week.
Brent crude rose 25 cents, or 0.5%, to $53.85 a barrel at 1321 GMT. Earlier in the session, it hit a high of $54.63 a barrel, a level not seen since Feb. 26, 2020.
U.S. West Texas Intermediate (WTI) futures were up 7 cents, or 0.1%, to $50 a barrel.
