Market Watch AU – 14th December 2023
The Fed Reserve held rates steady at the conclusion of their two day meeting overnight and also signalled that the tightening cycle of the last two years is coming to an end and lower borrowing costs to be expected in 2024. In a fresh statement Fed Officials made explicit attention to the fact that inflation “has eased over the past year”. The Fed’s dot plot projection implies 75 basis points of cuts in 2024 from its current level. Markets have responded favourably to the projection and with that the AUDUSD has rallied to 0.6670’s on the news, as the US-dollar slumps with US Treasury yields. Ahead today for the local market is the November Employment data, which is expected to show an uptick in the Unemployment rate of 3.8%, from 3.7%, while additional jobs is expected to slump to just +11k for the month. The AUDUSD pair returns to familiar congestion levels in the high 0.66-cents and will look to consolidate above the 200dma, currently around 0.6575.
Wall Street stocks surged higher after the US Fed announced no change to the interest rates and hinted at lower borrowing costs in 2024 suggesting that its tightening cycle of the last two years is at an end. The DJI was up +1.4%, the S&P500 gained +1.4% and the Nasdaq climbed just +1.4% by close. Australian shares are expected to open higher tracking the US market and raised enthusiasm.
Gold prices were up over 1% for the session after the Fed flagged an end to its rate hike cycle.
Copper prices were softer ahead of the Fed meeting announcement but expected to get a lift from a softer US-dollar when markets open again today. Iron Ore futures on the Dalian exchange declined once again after a widely-watched government policy meeting in China concluded without any major new stimulus pledges.
Crude Oil prices recovered some of its previous session losses following a much larger than expected draw on US Crude inventories and an attack to a tanker in the Red Sea that potentially threatens supply.
Open today 0.6662
Yesterday’s Range 0.6542 / 0.6673
Open today 0.6175
Yesterday’s Range 0.6084 / 0.6214
Yesterday’s Range 1.0686 / 1.0767
Yesterday’s Range 0.6069 / 0.6133
Yesterday’s Range 4.7102 / 4.7693
Yesterday’s Range 0.5214 / 0.5287
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