Market Update – December 14 – FOMC Day after Inflation weakens again

Home » Market Update – December 14 – FOMC Day after Inflation weakens again

  • The USD Index dived to a six-month low of 103.50,  from 105.00 following the cooler CPI data and trades at 104.00 now. US Stocks rallied on open as high as +3.85% but lost most of their gains by close (+0.30-1.01%). Yields tanked (10-yr lost 11 bp) as Treasuries rallied but closed at 3.501%. Commodities rallied (Gold & Copper hit 6-mth highs), Asian markets remain bid , while the USD was 1.5% vs Yen, and hit 6-mth lows vs Euro, Sterling & Kiwi and 3-mths lows vs. Aussie. BTC spiked to 18k before news that Binance withdrawals had hit $1.9 bln in 24 hours. 
    UK CPI also weakened (10.7% vs 10.9% & 11.1% last month) more than expected but the wider RPI (which is what many wage settlements use and is a cause of the widespread strike action) dipped but was hotter than expected at 14%.  
  • EUR – rotates over 1.0600 at 1.0625 now, ahead of ECB on Thursday.
  • JPY – sank to 134.60 lows from over 137.70 yesterday and 150.00 in late October. Strong Tankan data and Machinery Orders help JPY strength. 
  • GBP – Sterling rallied over 1.2400, and trades at 1.2350 following good Inflation data and ahead of an expected 50 bp rate hike from the BoE tomorrow. 
  • Stocks – Wall Street rallied closed higher again yesterday but gave up most of their opening gains. – US500 +29 (+0.73%) 4019, and retakes 4000. Big movers included MRNA +19.63%, META +4.74%, GOOGL & AMZN +2.5%. FUTS trades at 4029 now.

  • USOil – Rallied to $76.00 and trades at the key $75.00 now after a surprise build in US crude inventories against forecasts of a decline.
  • Gold – Spiked as high as $1824.45 and trades at $1808. Can the $1800 handle hold?  
  • BTC Sentiment woes continue from Binance & SBF but the weaker USD saw a peak over $18k, before a crash to 17.3k and bounce to 17.7k now. More FTX collapse fallout – Canada bans crypto leverage, crypto margin trading.

Today “nothing else matters” FOMC Policy Decision & Press Conference. Before that – EZ Ind. Prod., US Export/Import Prices, NZD GDP. Speech from ECB’s Elderson.

Biggest FX Mover @ (07:30 GMT) NZDJPY (-0.37%) fell from highs over 88.00 yesterday to test the 87.00 zone today. MAs aligned lower, MACD histogram & signal line negative and falling. RSI 38.10 & falling, H1 ATR 0.163, Daily ATR 0.879.

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Stuart Cowell

Head Market Analyst

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With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.

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