News & Analysis

Overnight on Wall Street: Thursday 12/12/19

diciembre 12, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

After a mixed start to the day, the FOMC statement helped major US equity benchmarks to close in positive territory.

  • Dow Jones Average Industrial fell by 30 points at 27,911.
  • S&P500 rose by 10 points at 3,142.
  • Nasdaq Composite added 38 points at 8,654.

As widely expected, the Federal Reserve kept interest rates unchanged in a target rate of 1.5% to 1.75%. The comments from the Chairman remain consistent with recent statements from the policymakers. However, the new dot plot shows that a 2020 hike seems unlikely which boosted the equity markets.

Currency Markets

In the FX market, major currencies were stronger against the greenback. The US dollar emerged as the weakest currency dragged by the comments from the Fed.

The Antipodeans were among the best performers in a US dollar selling environment. As a commodity currency, the Aussie dollar was also supported by higher iron prices. The AUDUSD pair is trading just below the 0.69 level as the prospects of planned tariffs on December 15 are likely keeping a lid on gains.

The British Pound continues to trade higher buoyed by the strong possibility of a majority win by the Conservative Party. However, the recent polls have shown that the lead between the Tory and Labour party has narrowed and Sterling traders should be careful as any unexpected outcome could send the Pound crashing.

The GBPUSD pair rose above the 1.32 level before retreating slightly to trade in the vicinity of 1.3197

GBPUSD (Daily Chart)


Source: Bloomberg Terminal

Commodities

The rally triggered mainly by deeper production cuts continues to provide some support to the oil market. Even though WTI and Brent Crude initially came under selling pressure after the EIA report showed a large build in crude oil inventories, oil prices managed to pare some losses.

As of writing, WTI and Brent Crude are currently in the region of $58 and $63 respectively. On the daily chart, they are both trading in a bullish channel.

USOUSD and UKOUSD (Hourly Chart)


Source: GO MT4

Gold was rising incrementally throughout the US session but the XAUUSD rallied in the final trading hours lifted by a weaker US dollar and the Fed’s comments.

XAUUSD (Hourly Chart)


Source: Bloomberg Terminal

Key upcoming events

Machinery Orders, Foreign Investment Bond and Investment Stocks (Japan)
Parliamentary Election and RICS Housing Price Balance (UK)
Consumer Inflation Expectations and RBA Bulletin (Australia)
European Council Meeting, Industrial Production, ECB Interest & Deposit Rate Decision and Monetary Policy Statement & Press Conference(Eurozone)
SNB Interest Rate Decision, Monetary Policy Assessment and Press Conference (Switzerland)
Producer Price Index, and Jobless Claims (US)
BoC’s Governor Poloz Speech (Canada)
Business NZ PMI (New Zealand)

Friday, 13th December 2019
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
010.1050.550.2630.09800
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
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Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

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