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24
Nov

German Ifo Survey, ECB Minutes, BoE Speeches

calendar 24/11/2022 - 08:45 UTC

The dollar weakened against other major currencies with further weakness in the dollar seen after the release of the FOMC meeting minutes. Among emerging market currencies the sentiment was somewhat mixed. Pairs like the USD/MXN and USD/ZAR moved lower with the latter falling below the 17.0-mark to a new two months low. Other pairs like the USD/CNH and USD/INR meanwhile were not moving significantly.

U.S. markets were trading clearly higher for the second trading day in a row, while European markets like the Germany 40 and Europe 50 were almost unchanged. Asian markets like the Hong Kong 50 and Japan 225 Yen meanwhile also moved moderately higher.

On Thursday the European Central Bank (ECB) publishes its account (i.e. minutes) from the last meeting of the Governing Council at the end of October. Multiple speeches are expected also from Bank of England (BoE) officials. In the morning hours the results of the German Ifo survey on business climate and expectations will be released.

EUR/USD

As the dollar continued to weaken, the EUR/USD rate ended the day on Wednesday even above the 1.04-threshold. While it was expected that the Federal Reserve would eventually reduce its pace of rate hikes, the FOMC meeting minutes released on Wednesday confirmed these assumptions with officials indicating a "soon" switch to smaller increases in rates as some decision makers are increasingly worried about the impact on the economy and financial stability.

PMI data coming from Europe was meanwhile much better than expected with the indicators for the eurozone and Germany improving despite expectations that they would deteriorate. German manufacturing and services PMI improved to 46.7 and 46.4 respectively (previous 45.7 and 44.9) and for the eurozone indicators were at 47.3 and 48.6 (previous 46.6 and 48.2). It should be noted that this leading indicator value is supposed to be above 50 for overall positive expectations and as such the overall expectations remain moderately negative.

EUR/USD

Gold

Gold prices were for once up on Wednesday, thus ending the series of losses for bullish gold investors. Events in the money markets could have contributed to this move as the 10-year U.S. T-Note benchmark rate fell towards 3.7% following the FOMC minutes release and the dollar also weakened. Against the comparably stronger performing euro Gold (EUR) CFD rates continued to decline, reaching intraday a new two weeks low.

Other precious metals such as platinum, palladium and in particular silver also ended the session on Wednesday in the green.

Gold

WTI Oil

Oil prices closed on Wednesday at the lowest level in almost two months with the downside move starting in the morning hours and continuing throughout the day as for example the Weekly Petroleum Status Report from the Energy Information Administration (EIA) indicated a significant build in gasoline and distillate stockpiles amounting to 1.7 million barrels and 3.1 million barrels respectively.

Reports indicate that while EU countries do want to impose further restrictions against Russia with a oil price cap, there is so far a disagreement among member states at which level this cap should be implemented.

WTI Oil

US 500

Major stock market indices like the US 500 and US Tech 100 edged higher on Wednesday for the second day in a row with the former trading at its daily high very close to the high of last week. While markets traded initially a bit lower on first fundamentals coming out that day such as weekly jobless claims which rose to 240 thousand in the last reporting week, probably to some extent driven also by layoffs in tech companies such as Twitter, fundamentals seen later on were rather optimistic. New home sales data for October indicated an improvement compared to the previous month with 632 thousand new homes sold compared to 603 thousand before, while analysts feared that the metric would suffer a setback. Also the somewhat more dovish than expected FOMC minutes might have helped sustain the positive sentiment ahead of the Thanksgiving Holiday on Thursday.

Autodesk (-5.73%) was the worst performing component of the S&P 500 index on Wednesday as the stock price realised the losses sustained during the extended session on Tuesday following the release of the company's quarterly results. The company's guidance for fiscal Q4 where it expects earnings per share (EPS) (GAAP) to amount to $0.99 to $1.05 and revenue to reach $1,303 million to $1,318 million compared to EPS of $0.91 and revenue of $1,280 million in Q3 seemed to fall behind more optimistic expectations analysts and investors had before this call.

US 500

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