FUNDAMENTAL NEWS AND TECHNICAL ANALYSIS REPORT – 30 DECEMBER 2022

30 Dec 2022

Dollar anticipates the best year since 2015; Fed rate path, China reopening to set the tone

Asian stock market closes in red on Thursday. The Shanghai Composite is down 0.44% at 3073.70. Overall, the Singapore MSCI is down 0.31% at 289.19. Over in Hong Kong, the Hang Seng Index is down 0.79% at 19741.14. In Japan, the Nikkei 225 is down 0.94% at 26093.67. While the Topix index is down 0.72% at 1895.27 South Korea’s Kospi is down 1.93% at 2236.40. Australia S&P/ASX 200 down 0.94% at 7020.10.

Top News of the Day:

The dollar was on track for its best performance in seven years on Friday, having been buoyed by the Federal Reserve’s aggressive monetary policy tightening and concerns about the global growth outlook.

The U.S. dollar index, which measures the greenback against a basket of currencies, has surged more than 8% this year, the most since 2015. It was last 0.05% lower at 103.93.

The Fed has raised rates by a total of 425 basis points since March to curb surging inflation, a move that has kept the dollar in bid for most of the year.

But expectations that the central bank may not have to raise rates as high as previously feared have caused the greenback to unwind its towering rally. The U.S. dollar index has fallen over 7% this quarter.

“I expect the king dollar to lose its crown and the dollar to make a more decisive turn by the middle of next year,” Bank of Singapore currency strategist Moh Siong Sim said.

Conversely, an ultra-dovish Bank of Japan in the face of a hawkish Fed, has spelled pain for the Japanese yen. It has fallen more than 13% year to date, its worst performance since 2013.

Market Summary as per 29/12/2022:

European equities Thursday closing. The DAX futures contract in Germany traded up 1.05% at 14071.72, CAC 40 futures up 0.97% at 6573.47. UK 100 futures contract in the U.K. up 0.21 at 7512.72

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 1.13% at 33248.50. The S&P 500 up 1.80% at 3851.36 and the Nasdaq 100 up 2.61% at 10480.34, NYSE closes 1.36% up at 15241.21.

Top Market News Today:

In the Forex market, GBPUSD down 0.12% at 1.2039. The USDJPY down 0.23% at 132.69, The USDCHF up 0.06 at 0.9234. EURUSD down 0.04% at 1.0657. EUR/GBP up 0.12% at 0.8851. The USD/CNY down 0.06% at 6.9580 at the time of writing.

In the Commodity market U.S. Gold futures up at 0.11% $1,816.55. Elsewhere, Silver futures up 0.29% at $23.96 per ounce, Platinum down 0.04% at $1055.10 per ounce, and Palladium down 0.51% at $1803.27.

Brent Crude Oil up 0.23 at $83.66 per barrel.

In the Cryptocurrency Markets, Bitcoin at 16595.60 down at 0.23%, Ethereum down 0.31% at 1196.07, Litecoin at 66.80 up 0.14%, at the time of writing.

Top Market Segment to Watch Out Today:

GOLD: – Gold price defends the previous day’s bullish bias despite recent struggle around daily top.

Hopes of economic recovery, lower rates could keep gold buyers on the table even as Covid, geopolitics probe immediate upside.

old price (XAU/USD) replicates the sluggish market conditions during early Friday, despite printing mild gains around the intraday high near $1,818 by the press time. The reason could be linked to the year-end holiday mood and a light calendar, as well as mixed headlines surrounding the recent key risk catalysts.

Economic News:

US: – President Joe Biden signed a $1.66 trillion bill funding the U.S. government for fiscal year 2023, the White House said in a statement.

Biden signed the bill, which passed Congress last week, while vacationing on the Caribbean Island of St. Croix.

The legislation includes record military funding, emergency aid to Ukraine, more aid for students with disabilities, additional funding to protect workers’ rights and more job-training resources, as well as more affordable housing for families, veterans and those fleeing domestic violence.

The 4,000-plus page bill passed the Senate on a bipartisan vote of 68-29, with the support of 18 of the 50 Senate Republicans. It passed the House of Representatives on a largely party-line vote of 225-201.

Euro Zone: –

Bank lending to euro zone companies slowed in November, easing back from the sector’s biggest borrowing binge in over a decade as rising interest rates and a looming recession appear to be taking a toll, European Central Bank data showed on Thursday.

Lending to businesses in the 19-country euro area expanded by 8.4% in November after an 8.9% reading a month earlier while household credit growth slowed to 4.1% from 4.2%.

The monthly flow of loans to companies was also sharply lower at minus 1 billion euros after a 24 billion euro reading a month earlier.

Growth in the M3 measure of money circulating in the euro zone meanwhile slowed to 4.8% from 5.1%, coming below expectations for 5.0% in a Reuters survey.