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Trends & Analysis
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GBP/USD recovers following wage report

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Trends & Analysis
News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Keep an eye on these key S&P 500 levels

News

US big banks report better-than-expected earnings

News

Crude oil declines on profit taking

News

US stocks edge higher, on track for yearly gains

 

Friday, December 29, 2023

Today’s headlines

What’s happening: US stocks closed mostly higher on Thursday, as investors digested recent economic reports.

What happened: Wall Street stock indices are on track to closing the year on a strong note, with just one trading session left for 2023.

US stocks are also set to notch gains for the ninth week, as investors look forward to rate cuts by the Federal Reserve.

Why it matters: US equity markets hovered close to record high levels on Thursday, boosted by economic reports that signalled rate cuts by the Federal Reserve in March. The S&P 500 is trading close to its highest settlement level of 4,796.56, which was recorded in January 2022.

Data released on Thursday showed the number of persons filing for jobless benefits increased by 12,000 to 218,000 in the week ending December 23, compared to market views of 210,000. The softening of the US labour market fuelled further speculations of rate cuts by the central bank.

Trade deficit in goods widened to $90.3 billion in November, compared to a gap of $89.6 billion a month ago. Exports declined by 3.6% to $165.1 billion, while imports contracted 2.1% to $255.4 billion. Wholesale inventories fell by 0.2% in November, while pending home sales came in flat for November versus market estimates of a 1% gain.

With just a single trading session remaining for the year, all major indices are on track to wrap up 2023 on a strong note. The Dow Jones index is up around 13.8% year to date, while the S&P 500 has added 24.6%. The tech-heavy Nasdaq is on course to recording its best year since 2003.

All three major stock indices are also on track to recording the ninth consecutive week of uptrend, recovering strongly from a negative third quarter. The S&P has gained 11.6% for the quarter and is on course to notching its strongest quarter in three years.

The Dow Jones index gained 53.58 points, or 0.14%, to close at 37,710.10 on Thursday, while the S&P 500 rose 0.04% to 4,783.35 and the Nasdaq 100 slipped 0.05% to settle at 16,898.47.

What to watch: Investors will watch Fed’s rate cuts next year as well as inflation data.

Data on Chicago PMI, due to be released on Friday, will also remain in focus. The Chicago Business Barometer, also known as the Chicago PMI, which surged to 55.8 in November, is expected to decline to a reading of 50 in December.

The markets today

The British pound will be in focus today ahead of the release of the Nationwide House Price Index

Context: The GBP/USD forex pair moved lower on Thursday, after hitting a five-month high earlier in the session.

Details: The GBP/USD forex pair surged to a new five-month high during Thursday’s session but turned lower after a rebound in the US dollar.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell to its lowest level in five months in early trading, with traders expecting rate cuts by the Federal Reserve in March next year.

However, the index recovered strongly later in the session on Thursday, exerting pressure on the GBP/USD forex pair. The US dollar index gained more than 0.2% to reach 101.23 on Thursday.

Data released recently also showed inflation easing in the UK, with British CPI showing an unexpected decline in November.

Earlier this month, the Bank of England kept interest rates unchanged at its final policy meeting of the year. Markets expect the BoE to cut rates by around 150 basis points during 2024, although there are wide speculations of UK’s central bank leaving interest rates unchanged at its February meeting.

The GBP/USD forex pair fell around 0.5% to 1.2733 on Thursday, after climbing to 1.2825 earlier in the session, its strongest level since August 1.

The FTSE 100 fell by 0.03% to close at 7,722.74, with energy stocks trading lower amid a continued decline in crude oil prices.

What to watch: Traders await the release of economic data on Nationwide housing prices from the UK today. The Nationwide House Price Index in the UK, which rose by 0.2% in November, is expected to decline by 0.1% in December.

Other Markets: European indices closed lower on Thursday, with the DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.24%, 0.48% and 0.11%, respectively.

The news shaping the markets

A Moscow court sentenced two men to prison for reading poems against Russia’s invasion of Ukraine. The news sent the RUB/USD pair higher this morning.


Singapore bank loans increased to S$792.9 billion in November, from S$791.5 billion in the prior month. This being the largest reading since June lent support to the SGD/USD forex pair.


Vietnam’s industrial production rose 5.8% year-over-year in December, accelerating from 5% growth a month ago. This also represented the eighth straight month of growth and sent the VND/USD pair higher in forex trading this morning.


The Philippines said that producer prices increased 0.3% year-over-year in November, versus a 0.4% decline in the earlier month, exerting pressure on the PHP/USD forex pair.


South Korea’s consumer price index eased to 3.2% year-over-year in December, from 3.3% in the prior month. The figure also came in lower than market estimates of 3.26%, which sent the KRW/USD pair lower in forex trading this morning.

What else to watch today

Russia’s manufacturing PMI, services PMI, composite PMI, money supply M2 and consumer price index, South Africa’s money supply M3, private sector credit, government budget value and balance of trade, Turkey’s balance of trade, Spain’s inflation rate and current account, India’s value of loans, value of deposits, money supply M3, external debt, infrastructure output and central government budget value, Brazil’s unemployment rate, US Baker Hughes crude oil rigs, as well as China’s current account.


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