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The markets sustained a risk appetite outlook as some markets moved past the BoJ Euphoria. Traders however maintain a cautious tone as markets experience thin liquidity drawing into the Christmas holiday. The European economic docket was light, and investors shift their focus to the US economic data which include Housing Data, CB Consumer Confidence and the Current Account for Q3. Canada will also release its inflation data for November later in the New York session.
GBPUSD plunged by -0.45% ahead of US Consumer Sentiment data for December. The Sterling slipped as UK public borrowing hits the November record. The Public sector Net borrowing jumped to 21.20B from 13.37B in November. Investors seem to be taking the data negatively ahead of UK GDP data due for release on Thursday. The US will also be releasing its GDP data on Thursday. The pair extended losses below the 1.2200 level and the next key support to watch out for is the 1.1950 level.
EURCAD was steady at +0.04% ahead of the Canadian inflation data. The Euro was boosted by the small improvement in the German Consumer Sentiment for January. The German Consumer Climate rose to -37.8 vs -38.0 surveyed. The Canadian dollar was also strengthened by a rebound in energy prices along with better-than-expected Retail Sales released on Tuesday. The pair took a breather from the 1.4550 level, a 10-months high and a plunge below the 1.4450 level could trigger selling pressure towards the 1.4350 level, a 10-day low.
NZDJPY sank by -0.88% following a miss in New Zealand’s Trade balance. The Trade Balance YoY data for November fell to -14,630M vs -13,860M underpinning investors’ global growth worries. The Japanese Yen held onto gains below the 84.00 level as hawkish BoJ sentiments loom. Upside gains are capped by the 84.00 level and the downside 81.50 level remains the near-term support level.
European stocks edged higher on Wednesday as consumer sentiment picked up in German. FTSE100 surged by +0.36% extending its 3-day rally from 7300 support and bulls could target the 7500 level if they manage to hold gains above the 7400 level. CAC40 soared by +0.93% after bouncing off the 6400 level. A break above the 6500 level could strengthen bullish appetite towards the 6600 level. DAX added +0.31% gains after breaching the 14000 and the key levels to watch out for are the 14200 resistance and 13700 support levels.
US stock futures extended rebound ahead as US companies beat wall street expectations. S&P500 futures advanced by +0.50% as bulls hold above the 3800-support area. Upside gains are capped by the 3900 level. Nasdaq100 futures rose by +0.46% towards the 11300 near-term resistance level. The key support level to watch out for is at the 11000 psychological level. DJIA index futures were higher by +0.52% from the 32500-support level and bulls are challenged by the 33500 level.
In commodities, oil markets extended gains for the 3rd day on US stockpiles declining. The US API Weekly Crude Oil stocks dropped to -3.069M vs -0.167M estimated confirming rising demand amidst supply worries.
USWTI crude oil futures rose by +1.43% towards the 77.50 resistance level after bouncing off the 74.00 immediate support level. Brent crude oil surged by +1.53% and key levels to watch out for are the 79.00 support and 82.50 resistance level. There will be a release of US Crude Oil inventories later in the day.
