An all-time high of 22 billion pounds are borrowed by the UK in November
Asian stock market closes in red on Tuesday. The Shanghai Composite is down 1.07% at 3073.77. Overall, the Singapore MSCI is down 1.17% at 287.88. Over in Hong Kong, the Hang Seng Index is down 1.33% at 19094.80. In Japan, the Nikkei 225 is down 2.46% at 26568.03. While the Topix index is down 1.54% at 1905.59 South Korea’s Kospi is down 0.80% at 2333.29. Australia S&P/ASX 200 dup 1.15% at 7104.90.
Top News of the Day: –
British public borrowing rose to its highest for any November since records began, at 22.017 billion pounds ($26.77 billion), reflecting higher costs for energy subsidies, figures from the Office for National Statistics showed on Wednesday.
Economists polled by Reuters had forecast public sector net borrowing, excluding state banks, of 13.0 billion pounds for the month.
Public borrowing for the first eight months of the financial year, from April to November, totalled 105.4 billion pounds, up by 7.6 billion pounds from the same period in 2021.
The government’s Office for Budget Responsibility forecast last month that borrowing would reach 177 billion pounds this financial year, equivalent to 7.1% of gross domestic product, and remain high at 5.5% of GDP in 2022/23.
Public sector net debt, excluding state banks, rose to 98.7% of GDP in November from 98.2% in October, equivalent to 2.478 trillion pounds in cash terms.
Market Summary as per 20/12/2022:
European equities Tuesday closing. The DAX futures contract in Germany traded down 0.42% at 13884.66, CAC 40 futures down 0.35% at 6450.43. UK 100 futures contract in the U.K. up 0.13 at 7370.62
In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 0.28% at 32849.74. The S&P 500 up 0.10% at 3821.62 and the Nasdaq 100 up 0.01% at 10547.11, NYSE closes 0.42% up at 15000.62.
Top Market News Today:
In the Forex market, GBPUSD down 0.19% at 1.2158. The USDJPY up 0.06% at 131.77, The USDCHF down 0.01 at 0.9262. EURUSD up 0.03% at 1.0622. EUR/GBP up 0.22% at 0.8737. The USD/CNY up 0.14% at 6.9701 at the time of writing.
In the Commodity market U.S. Gold futures down at 0.14% $1,814.92. Elsewhere, Silver futures down 1.06% at $23.88 per ounce, Platinum down 1.20% at $999.62. per ounce, and Palladium up 0.45% at $1740.79.
Brent Crude Oil up 0.05% at $80.14 per barrel.
In the Cryptocurrency Markets, Bitcoin at 16810.90 down at 0.51%, Ethereum down 0.74% at 1208.64, Litecoin at 64.810 down 0.18%, at the time of writing.
Top Market Segment to Watch Out Today:
AUDUSD: – AUD/USD gains some positive traction on Wednesday.
The AUD/USD pair struggles to capitalize on its modest intraday gains on Wednesday and faced rejection near the 0.6700 round-figure mark. The pair, however, sticks to a mildly positive bias through the early European session and is currently trading around the 0.6675-0.6680 region, just above the 100-day SMA support.
A goodish recovery in the global risk sentiment – as depicted by the upbeat tone around the equity markets – is seen as a key factor lending some support to the perceived riskier Aussie. That said, the emergence of some US Dollar buying keeps a lid on any meaningful upside for the AUD/USD pair and warrants some caution for bullish traders.
US: – The U.S. economy is “already being impacted” by China’s latest COVID developments and energy shortages in Europe, Deputy Treasury Secretary Wally Adeyemo said on Tuesday, but it is in better shape than in the past to withstand such pressures.
Adeyemo, in a phone interview with Reuters, said he was feeling confident about the state of the U.S. economy after his trip to Europe last week, given continued momentum in job creation and economic growth, easing inflation and huge investments that would help reduce supply chain shortages in coming years.
A reversal in China’s zero-COVID policies has led the World Bank to cut economic growth estimates and U.S. officials to worry about supply chain and other economic repercussions. Meanwhile, a sharp slowdown is forecast in Europe because of energy shortages linked to Russia’s invasion of Ukraine.
“We’re already being impacted by those headwinds … but we’re more able to withstand that and power through it because of the policy choices we’ve made,” he said.
Adeyemo noted that U.S. consumers had less debt than during the 2008-2009 global financial crisis, and company balance sheets were healthier, in part due to subsidies from early in the pandemic.
President Joe Biden enters the new year atop a mixed-picture economy that investors and CEOs warn could wither under global pressure and domestic price spikes, while facing a slim Republican majority in the U.S. House of Representatives likely to block major economic proposals.
Adeyemo said Treasury would focus heavily in 2023 on implementing $270 billion in tax credits provided under the Inflation Reduction Act to combat climate change, as well as parts of the bipartisan infrastructure law written to mitigate supply crunches.
Euro Zone: –
Euro zone government bond yields rose on Tuesday, echoing weakness in the Japanese market, where yields hit a seven-year high after the central bank surprised investors by loosening some of its strict controls over long-term interest rates.
The Bank of Japan kept broad policy settings unchanged, but widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.
Shares dropped and the yen and bond yields spiked following the decision, which investors had not expected to materialise before April, when Governor Haruhiko Kuroda steps down.
Treasury yields rose by as much as 13 bps in Asia, which made for a weaker session in the U.S. and Europe, where German 10-year yields rose 10.5 bps to 2.30%.
Euro zone bonds have already been under intense pressure in the past few months, particularly since last week, when the European Central Bank raised interest rates, as expected, but sounded a far more hawkish note about the outlook for inflation and monetary policy than investors anticipated.
German 10-year yields have risen for five days in a row, as bonds marked their longest stretch of price losses since August.
ECB President Christine Lagarde said the central bank would need to deliver “significant” rate increases at a steady pace.
Top Economic Releases Today:
- USD: CB Consumer Confidence (Dec) Forecast 101.0, Previous 100.2 at 20:30
- USD: Existing Home Sales (Nov) Forecast 4.20M, Previous 4.43M at 20:30
- CAD: Core CPI (MoM) (Nov) Forecast 0.2%, Previous 0.4% at 19:00
- NZD: Trade Balance (MoM) (Nov) Actual –1863M, Previous 2129M at 03:15
- USD: Crude Oil Inventories Forecast –1657M, Previous 10.231M at 21:00
GBPUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 1.22233, TAKE PROFIT AT 1.23373, SL AT 1.21032
EURUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 1.06234, TAKE PROFIT AT 1.06723, SL AT 1.05774
AUDUSD TECHNICAL ANALYSIS
TRADE SUGGESTION– SELL AT 0.66809, TAKE PROFIT AT 0.66382, SL AT 0.67287
USDJPY TECHNICAL ANALYSIS
TRADE SUGGESTION- SELL AT 133.641, TAKE PROFIT AT 131.717, SL AT 135.106
DOW JONES INDEX TECHNICAL ANALYSIS
TRADE SUGGESTION – SELL AT 32947, TAKE PROFIT AT 32579, SL 33128
WTI CRUDE OIL TECHNICAL ANALYSIS
TRADE SUGGESTION– SELL AT 75.74, TAKE PROFIT AT 74.61, SL 76.63
SILVER TECHNICAL ANALYSIS
TRADE SUGGESTION– BUY AT 23.440, TAKE PROFIT AT 23.928, SL 23.247
LITECOIN TECHNICAL ANALYSIS
TRADE SUGGESTION- SELL AT 63.2191, TAKE PROFIT AT 59.2932, SL AT 65.6836