Market Roundup
•German Dec WPI (YoY) 16.1%, 16.6% previous
•German Dec WPI (MoM) 0.2%, 1.2% forecast, 1.3% previous
•EU Nov Industrial Production (YoY) -1.5%,0.6% forecast, 3.3% previous
•EU Nov Industrial Production (MoM) 2.3%, 0.5% forecast, 1.1% previous
•US Dec Real Earnings (MoM) 0.1%, -0.2% previous
•US Dec CPI Index, s.a 280.19, 278.88 previous
•US Dec Core CPI Index 284.76, 283.20 previous
•US Dec CPI (YoY) 7.0% ,7.0% forecast, 6.8% previous
•US Dec Core CPI (MoM) 0.6%,0.5% forecast, 0.5% previous
•US Dec Core CPI (YoY) 5.5%,5.4% forecast, 4.9% previous
Looking Ahead - Economic Data (GMT)
•15:00 US Crude Oil Inventories -1.904M forecast, -2.144M previous
•15:00 US Cushing Crude Oil Inventories 2.577M previous
•16:00 US Dec Cleveland CPI (MoM) 0.5% previous
•19:00 US Dec Federal Budget Balance -25.0B forecast, -191.0B previous
Looking Ahead - Economic events and other releases (GMT)
•18:00 US FOMC Member Kashkari Speaks
Fxbeat
EUR/USD: The euro firmed on Wednesday after U.S. Federal Reserve Chair Jerome Powell's comments at a congressional hearing were less hawkish than expected. The greenback slid to its weakest since mid-November against significant peers after Federal Reserve Chair Jerome Powell said it may take several months to make a decision on running down the central bank’s $9 trillion balance sheet. Some investors were relieved that the Fed did not sound more hawkish than the market had anticipated, and this helped euro gain against dollar. Immediate resistance can be seen at 1.1421 (23.6% fib), an upside break can trigger rise towards 1.1463 (15th Nov high).On the downside, immediate support is seen at 1.386 (38.2% fib), a break below could take the pair towards 1.1357(50%fib).
GBP/USD: Sterling steadied on Wednesday within striking distance to its recent highs versus the dollar and the euro, as investors focused on possible rate increases from the Bank of England.The pound has strengthened recently as investors ramped up expectations of further rate rises while Britain’s focus on rolling out booster vaccinations rather than returning to coronavirus lockdown measures boosted risk sentiment. The pound was up against the dollar at $1.3685. Immediate resistance can be seen at 1.3695 (23.6% fib), an upside break can trigger rise towards 1.3714 (Higher BB).On the downside, immediate support is seen at 1.3624 (38.2%fib), a break below could take the pair towards 1.3567(50%fib).
USD/CHF: The dollar declined against the Swiss franc on Wednesday after the Federal Reserve Chair Jerome Powell sounded less hawkish than expected overnight. The U.S. dollar tumbled after Powell did not provide any new details on interest rates at a congressional hearing on his confirmation for a second term as the Fed's chair, adding that he believed the economy could handle tighter monetary policy. But he said that policymakers were still debating approaches to reducing the central bank's balance sheet, which could take two, three or four meetings to decide. Immediate resistance can be seen at 0.9222 (38.2%fib), an upside break can trigger rise towards 0.9259 (Higher BB).On the downside, immediate support is seen at 0.9187 (50%fib), a break below could take the pair towards 0.9144 (61.8%fib).
USD/JPY: The dollar edged lower against the Japanese yen on Wednesday after data showed U.S. consumer prices rose solidly in December, but in line with economists' expectations. The consumer price index increased 0.5% last month after advancing 0.8% in November, the Labor Department said on Wednesday. In the 12 months through December, the CPI surged 7.0%. That was the biggest year-on-year increase since June 1982 and followed a 6.8% rise in November. Economists polled by had forecast the CPI gaining 0.4% and shooting up 7.0% on a year-on-year basis. Strong resistance can be seen at 115.51 (38.2%fib), an upside break can trigger rise towards 115.85 (Jan 19th high).On the downside, immediate support is seen at 115.05 (5 DMA), a break below could take the pair towards 114.56 (61.8%fib).
Equities Recap
European shares rose on Wednesday, taking cues from overnight gains on Wall Street after U.S. Federal Reserve Chair Jerome Powell sounded less hawkish than expected in a Congressional testimony.
At (GMT 14:59 ),UK's benchmark FTSE 100 was last trading up at 0.92 percent, Germany's Dax was up by 0.48 percent, France’s CAC finished was up by 0.65 percent.
Commodities Recap
Oil prices hit two-month highs on Wednesday on tight supply and easing concerns about the potential hit to demand from the Omicron coronavirus variant.
Brent crude futures were up 42 cents, or 0.5%, at $84.14 a barrel at 1211 GMT.U.S. West Texas Intermediate (WTI) crude futures were up 60 cents, or 0.7%, to $81.82 a barrel.
Gold prices retreated on Wednesday ahead of U.S. inflation data that could provide further direction on U.S. monetary policy after comments from the Federal Reserve Chair lifted bullion in the last session.
Spot gold was down 0.3% at $1,817.11 per ounce at 1147 GMT, after posting its biggest one-day percentage rise since mid-December on Tuesday. U.S. gold futures were down 0.1% at $1,817.20.
