US indices closed up on Wednesday, lifted by the Semiconductors & Semiconductor Equipment (+1.92%), Capital Goods (+0.81%) and Technology Hardware & Equipment (+0.78%) sectors. On the economic data front, the Mortgage Bankers Association’s Mortgage Applications rose 3.8% for the week ending December 6th, up from a decline of -9.2% the week before. The Consumer Price Index rose 0.3% for the November month over month change, above the 0.2% consensus, down from a rise of 0.4% a month earlier. The Monthly Budget Deficit rose to 208.8 billion dollars, just above the consensus for November, compared to 204.9 billion dollars in October. The Fed met for the last time this year where chairman Powell stated that monetary policy is well positioned for this expanding economy, the outlook is unchanged, the jobs market is expected to remain strong and inflation remains moderate. The Fed kept interest rates the same.
On Thursday, economists expect the Producer Price Index Final Demand month over month change to rise 0.2% for November, down from 0.4% the month before, Initial Jobless Claims are anticipated to increase to 214K for the week ending December 7th, up from 203K the week before. Continuing Claims are expected to fall to 1678K for the week ending November 30th, down from 1693K the prior week. Finally, Bloomberg Consumer Comfort Index data for the week ending December 8th is expected.
European markets are expected to open on a flat note.
Foreign Exchange
The US dollar was bearish against all of its major pairs on Wednesday. On the economic data front, the Mortgage Bankers Association’s Mortgage Applications rose 3.8% for the week ending December 6th, up from a decline of -9.2% the week before. The Consumer Price Index rose 0.3% for the November month over month change, above the 0.2% consensus, down from a rise of 0.4% a month earlier. The Monthly Budget Deficit rose to 208.8 billion dollars, just above the consensus for November, compared to 204.9 billion dollars in October. The Fed met for the last time this year where chairman Powell stated that monetary policy is well positioned for this expanding economy, the outlook is unchanged, the jobs market is expected to remain strong and inflation remains moderate. The Fed kept interest rates the same. On Thursday, economists expect the Producer Price Index Final Demand month over month change to rise 0.2% for November, down from 0.4% the month before, Initial Jobless Claims are anticipated to increase to 214K for the week ending December 7th, up from 203K the week before. Continuing Claims are expected to fall to 1678K for the week ending November 30th, down from 1693K the prior week. Finally, Bloomberg Consumer Comfort Index data for the week ending December 8th is expected.
The Euro was bullish against most of its major pairs with the exception of a NZD and AUD. In Europe, there was no major economic data released.
The Australian dollar was bullish against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (JAN 20) was about flat to $58.84. The contract was above its 20D MA (@ $57.63) and above its 50D MA (@ $55.92). The US Department of Energy reported that, for the week ended 6 December, crude oil inventories increased 822k barrels compared to the previous week.
Gold was up $10.9 to $1475.2. The precious metal was above its 20D MA (@ $1466) and below its 50D MA (@ $1481).
Copper Future (MAR 20) on Comex was up 2.8c to 279.3c/lb. The contract was above its 20D MA (@ 267.75c) and above its 50D MA (@ 265.85c). In Europe, the London Metal Exchange reported its copper inventories decreased 3500 tons to 178200 tons.