The FOMC minutes continued to show inflation was the overriding concern. Participants generally noted that upside risks to the inflation outlook “remained a key factor” for policy. It was repeated that a restrictive stance would have to be maintained for a sustained period until inflation was “clearly” on a path toward 2%. US Data yesterday showed ISM Manufacturing PMI’s missing at 48.4, but Jobs Openings remaining very strong beating expectations at 10.46m. Kashkari called for 5.4% terminal rate.
- The USD Index held 104.00 yesterday as the USD steadied post FOMC mins. 104.20 now.
- EUR – back to test 1.0600. Germany November trade balance beats €10.8 billion vs €7.5 billion.
- JPY – rallied from new 7-mth lows under 130.00 yesterday to 132.50 now
- GBP – Sterling rallied to 1.2080 before sinking back to key 1.2000 today.
- Stocks – The US markets closed up (+0.40-0.76%). US500 -28.03 (0.75%) at 3853. TSLA +5.12%, BABA +13%, MSFT -4.37%.
- USOil – Tanked –9% Monday, Tuesday ($72.75 lows) and has recovered 1.1% today to trade at $73.50 ahead of inventories later
- Gold – Breached $1850 in early trades, rallied to $1860 and trades at $1850now.
- BTC – Sentiment woes continue – the biggest coin trades at $16.8k today. FTX’s former top lawyer aided US authorities in Bankman-Fried case.
Today – EZ Construction PMI, UK and US Services and Composite Final PMIs, EZ PPI, US Challenger Layoffs, Canadian Trade Balance, US Claims, US EIA Inventories, speeches from Fed’s Bostic and Bullard.
Biggest FX Mover @ (07:30 GMT) EURAUD (-0.45%). Declined from 1.5660 pivot yesterday to test 1.5400, before recovering and rallying to test 1.5600 today. MAs aligned higher, MACD histogram & signal line positive and rising. RSI 52.00 & neutral, H1 ATR 0.00306, Daily ATR 0.01388.
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Stuart Cowell
Head Market Analyst
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