General Market Comment
U.S. indices closed higher on Wednesday, lifted by shares in the Automobiles & Components (+2.53%), Semiconductors & Semiconductor Equipment (+2.11%) and Energy (+1.5%) sectors. The U.S. Federal Reserve released the minutes of their December FOMC meeting stating that timing of future policy tightening is less clear, where the central bank could be patient about further rate increase, citing “volatility in financial markets and increased concerns about global growth”. The S&P 500 (2,584.96) stays above its 20d moving average (2,526.03 – negative slope) but remains below 50d moving average (2,637.20 – negative slope).
European markets are expected to start on a flat note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Wednesday. On the economic data front, mortgage applications surged by 23.5% in the week ended January 4th from a decline of 8.5% in the previous week. In other news, the Fed released the minutes of their December meeting stating that timing of future policy firming is less clear due to the “volatility of the financial markets and the increased concerns about global growth”. The Committee projected two more rate hikes in 2019.
The Euro was bullish against most of its major pairs except for the NZD. The euro-zone unemployment rate fell to 7.9% in November to a 10-year low (8.1% expected) from 8% a month earlier. The German trade balance excess widened to E20.5B in November (+E18.6B anticipated) from E18.9B in October. Exports fell 0.4% while imports slid 1.6%. The French consumer confidence index dropped in December to 87 (90 expected), the lowest since November 2014, from 91 in November (revised from 92).
The Australian dollar was higher against most of its major pairs except for the NZD and the EUR.
Commodities
After the close of Wall Street, WTI Crude Future (FEB 19) was up $2.4 to $52.16. The contract was above its 20D MA (@ $48) and below its 50D MA (@ $53.43). The US Department of Energy reported that, for the week ended 4 January, crude oil inventories fell 1680k barrels compared to the previous week.
Gold was up $7.9 to $1293.1. The precious metal was above its 20D MA (@ $1269) and above its 50D MA (@ $1244).
Copper Future (MAR 19) on Comex was about flat to 265.95c/lb. The contract was below its 20D MA (@ 268.52c) and below its 50D MA (@ 272.93c). In Europe, the London Metal Exchange reported its copper inventories increased 325 tons to 132675 tons