Market news for 12/21/2023
In an interview with Spanish daily 20 Minutes on Thursday, European Central Bank Vice President Luis de Guindos said it was too early to begin easing monetary policy, according to Reuters.
De Guindos also said the ECB does not foresee a technical recession in the eurozone and that it would be happy to see an agreement on EU fiscal reform as it would remove uncertainty in the market.
Markets are awaiting the release of the final revision of the US Bureau of Economic Analysis's third-quarter GDP figures, as well as weekly jobless claims and December manufacturing statistics from the Philadelphia Fed.
The U.S. Dollar Index rebounded after falling early Wednesday to finish the day marginally higher. The demand for the dollar during the American session was facilitated by the negative dynamics of the main Wall Street indices, indicating an flight from risks. Positive statistics on consumer sentiment and housing construction also helped the US currency. The dollar index appears to have entered a period of consolidation below 102.50. In Europe on Thursday morning, US stock index futures were trading higher, with the yield on the 10-year US Treasury note rising again to 3.9%. In the third quarter, US GDP growth is forecast to be confirmed at 5.2% year-on-year.
Speculation that the Fed will cut lending rates sooner than expected sent USD/JPY to 143.50.
The broader dollar index is expected to remain under pressure, even though the Fed has not declared an absolute victory over inflation. Concerns that the strength of the United States economy could make price pressures unrelenting are leading Fed policymakers to maintain a restrictive stance on interest rates.
Going forward, investors will focus on the core US personal consumer expenditures (PCE) price index for November, which will be released on Friday.
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The information contained in this material should not be construed as trading recommendation. The analytical forecast is the subjective opinion of the author and cannot guarantee income.
