General Market Comment
US indices closed higher on Wednesday after the Chairman of the Fed, Jerome Powell, mentioned that interest rates are close to neutral. Shares in the Retailing (+3.96%), Software & Services (+3.91%) and Technology Hardware & Equipment (+3.36%) sectors jumped higher. On the economic data front, MBA mortgage applications rose by 5.5% in week ended November 23rd from a decline of 0.1% in the previous week. In other news, wholesale inventories advanced by 0.7% MoM in a preliminary estimate in October (estimated 0.4%) compared to an increase of 0.6% in September. Personal consumption grew by 3.6% in a second reading in 3Q (forecasted 3.9%) from 4% in the first reading and 3.8% in 2Q. Also, annualized GDP in a second reading came out to 3.5%, in-line with estimates and unchanged vs the first reading, from 4.2% in 2Q. Finally, new home sales added 544k units in October (forecasted 575k) compared to 597k in September. The S&P 500 (2,743.79) breaks above its 20d moving average (2,720.08 – positive slope) but stays below 50d moving average (2,781.86 – negative slope).
European markets are expected to start on a positive note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Wednesday. On the economic data front, MBA mortgage applications rose by 5.5% in week ended November 23rd from a decline of 0.1% in the previous week. In other news, wholesale inventories advanced by 0.7% MoM in a preliminary estimate in October (estimated 0.4%) compared to an increase of 0.6% in September. Personal consumption grew by 3.6% in a second reading in 3Q (forecasted 3.9%) from 4% in the first reading and 3.8% in 2Q. Also, annualized GDP in a second reading came out to 3.5%, in-line with estimates and unchanged vs the first reading, from 4.2% in 2Q. Finally, new home sales added 544k units in October (forecasted 575k) compared to 597k in September.
The Euro was bullish against most of its major pairs except for the NZD and the AUD. The M3 money supply growth was 3.9% in October (3.5% expected) after +3.6% in October. The German GfK consumer confidence index fell to 10.4 in December (10.5 anticipated) from 10.6 the monthly earlier.
The Australian dollar was higher against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (JAN 19) was down $1.3 to $50.26. The contract was below its 20D MA (@ $57.8) and below its 50D MA (@ $65.72). The 14d RSI below 30 (21.81) indicates WTI Crude Future (JAN 19) was oversold. The US Department of Energy reported that, for the week ended 23 November, crude oil inventories increased 3577k barrels compared to the previous week.
Gold was up $6.3 to $1221.3. The precious metal was above its 20D MA (@ $1221) and above its 50D MA (@ $1215).
Copper Future (MAR 19) on Comex was up 8.1c to 280.7c/lb. The contract was above its 20D MA (@ 275.84c) and above its 50D MA (@ 278.37c). In Europe, the London Metal Exchange reported its copper inventories decreased 525 tons to 137325 tons.