Wednesday will likely see heightened volatility, with traders reacting to Fed meeting minutes and US housing data. Retail stocks, interest-sensitive sectors, and energy markets are expected to see significant activity as markets digest economic signals and policy implications.
Investors will also keep a close eye on global macroeconomic developments, setting the stage for year-end positioning.
KEY INDICATORS
Federal Reserve meeting minutes
The Fed’s meeting minutes, due for release later in the day, will be the focal point for market participants.
Insights into the Fed’s discussions on inflation and future rate paths could lead to volatility, particularly in interest-rate-sensitive sectors like tech and financials.
European economic updates
Eurozone consumer confidence and industrial production data are scheduled, providing key insights into regional economic resilience.
European equity markets and the euro may react to these updates, influencing global market sentiment.
Oil and energy markets
Energy prices remain a wildcard as geopolitical tensions and OPEC production signals impact crude oil prices.
Movements in oil could influence inflation expectations and energy stock performance globally.
MARKET MOVERS
XAU/USD
Possible short preference Short positions below 2617.54 with targets at 2608.16 & 2590.84 in extension. Alternative scenario Above 2637.13 look for further upside with 2641.98 & 2665.94 as targets. The RSI is bearish and calls for further decline.
Pound, gold and oil prices in focus: commodity and currency check, 20 November
The pound rose slightly against the dollar in early European trading on Wednesday, up 0.1% to USD 1.2692. This comes after the latest UK inflation data came in hotter than expected, rising to 2.3% in October.
Gold prices dipped slightly lower on Wednesday morning, easing back after a rebound in the previous session amid geopolitical concerns.
Spot gold fell 0.3% to USD 2,625 per ounce.
US gold futures were down by 0.1% to USD 2,627 per ounce.
Oil prices surged on Wednesday morning, driven higher by geopolitical concerns.
Brent crude futures were up 0.7% at USD 73.83 a barrel.
US West Texas Intermediate (WTI) (CL=F) jumped 1% to USD 70.15.
Crude Oil WTI
Possible long indication Long positions above 69.75 with targets at 71.03 & 70.41 in extension. Alternative scenario Below 69.16 look for further downside with 68.65 & 67.46 as targets. The RSI is bullish and calls for further upside.
EUR/USD
Possible short preference Short positions below 1.05348 with targets at 1.05227 & 1.05078 in extension. Alternative scenario Above 1.05726 look for further upside with 1.05894 & 1.06091 as targets. As long as 1.05726 is resistance, look for choppy price action with a bearish bias.
TODAY’S NEWS HEADLINES
Euro-dollar parity is back in focus as Trump win sparks trade jitters
The prospect of the US introducing a swathe of new tariffs under President-elect Donald Trump has led some economists to predict a return to euro-US dollar parity.
Trump’s fiscal plan could spur domestic inflation and cause the Federal Reserve to exercise more caution in monetary easing — while slowing exports increase the chance of rate cuts in the euro area.
A weak euro zone economic outlook and a spike in geopolitical tensions in Russia are also seen weighing on the euro.
The euro has declined rapidly, meanwhile, briefly dipping below USD 1.05 on 14 November for the first time since October 2023. Just two months ago, it was trading around USD 1.17.
UK consumer inflation rose more than expected in October
UK inflation rose more than expected last month, climbing back above the Bank of England’s target and potentially stalling further interest rate cuts.
Annual consumer price inflation climbed to 2.3% in October from 1.7% in September, which had been the lowest reading since April 2021, above the 2.2% expected.
The monthly rate soared 0.6%, a jump from the flat reading the prior month.
Core CPI, which excludes volatile energy and food prices, rose 0.4% on a monthly basis, meaning the annual rate rose to 3.3% from 3.2% in the prior month.
The annual core figure had actually been expected to fall to 3.1% in October.
Asia FX muted as China keeps rates unchanged, dollar steadies from recent dip
Most Asian currencies moved in a tight range on Wednesday with the yuan treading water after China left benchmark rates unchanged, while the dollar steadied from recent losses.
The Chinese yuan moved little on Wednesday, with the USD/CNY pair hovering around three-month highs.
The People’s Bank of China left its benchmark loan prime rates unchanged as widely expected, after trimming the rate last month.
Traders were seen pricing in a 61% chance the Federal Reserve will cut interest rates by 25 basis points in December, and a 39% chance rates will remain unchanged.
