News & Analysis

Strong moves post CPI – FED; FED increases rates to 1.5%; GOLD – EURUSD Jump; USD slammed; Dow Jones new records

Dec 14, 2017 | Daily Market Outlook

Today’s high impact news:

19:30 CHF Libor Rate – SNB Monetary Policy Assessment
20:00 CHF SNB Press Conference
20:30 GBP Retail Sales
23:30 GBP MPC Official Bank Rate Votes – Monetary Policy Summary – Official Bank Rate
23:45 EUR Minimum Bid Rate
00:30 EUR ECB Press Conference
00:30 USD Core Retail Sales m/m – Retail Sales m/m – Unemployment Claims
04:25 CAD BOC Gov Poloz Speaks

The FED sent the Dow Jones to new records overnight as it closed 80.63 points higher at 24,585.43. The NASDAQ added 13.48 points higher but the S&P500 closed slightly lower losing 1.26 points. CPI data came in as expected, Core CPI fell to 0.1%. The FED raised the fund’s rate to 1.5% as expected. The central bank also raised its 2018 GDP estimate to 2.5 percent from 2.1 percent in September.

European markets closed lower on Wednesday, the FTSE slightly lower losing 3.90 points the DAX finished 57.89 points lower. Utilities ended up being the worst performers, with the sector slipping 2.11 percent by the end of trade.

Forex, volatility returned on Wednesday, the USD fell after the Federal Reserve hiked interest rates by 0.25 percent in a widely expected move, but left its rate outlook for the coming years unchanged. Core CPI also added as it missed 0.2% expectations coming in at 0.1%. Majors jumped to the USD, the EURUSD +85 pips breaking its downtrend. The AUDUSD continued its higher move adding 82 pips to hit 4-week highs. .7624 level has been reached and may offer resistance. The USDJPY lost 100 pips, buyers have been active this morning adding 20 pips. Gold surged adding $11.90. Oil fell overnight, rising U.S gasoline stockpiles countered a fall in crude stockpiles. Crude inventories fell by 5.1 million barrels in the week to Dec. 15, compared with analysts’ expectations for a decrease of 3.8 million barrels. Gasoline stocks rose by 5.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.5 million-barrel gain. Distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels, versus expectations for a 902,000-barrel increase, the EIA data showed.

The data feast continues tonight, UK is expected to hold rates steady at 0.5%. With the amount of high impact news coming out markets can see increased unexpected volatility, traders should factor this into their risk management.

USDJPY was flattened as sellers moved onto the USD post-CPI and Federal Reserve funds rate.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST


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