Market Update – December 1 – Powell Sparks Stock & Treasury Rally & Sinking USD

The USD Index has tanked to 105.30 lows today from over 107.10 as Chair Powell more or less confirmed a 50bp hike at the next FED meeting, was sanguine about the terminal rate being over 5% and reiterated (again) that the fight to bring down inflation was far from over. He was as Hawkish as had been expected.  Stocks & Treasuries ripped higher with optimism about China’s reopening prospects even after mixed US data yesterday.
EUR – retakes 1.0450 from under 1.0300 lows yesterday..  
JPY – collapsed to under 136.00 today from 139.85 highs yesterday – 
GBP – Sterling rallied over 200 ppips from  1.1900 support and lows to 1.2110 now.
Stocks – Wall Street erupted higher 2.18%-4.41% (NASDAQ best performer) – US500 +122.48 (+3.09%) closed over 4000 at 4080, has gained 13.8% in 2 months  and is over it’s 200 MA first time in 7 months. FUTS trades at 4085 now. 

USOil – Rallied to $81.50 and trades at $80.00 now. Inventories showed a huge 12.6m drawdown. 
Gold – Rallied to $1780 from $1745 lows, trades at $1776 now.     
BTC Sentiment woes continue, SFB “I didn’t try to commit fraud”.. Weaker USD takes it over 17K. 

Today – German Retail Sales, EZ, UK & US Final Manufacturing PMI, US ISM, Weekly Claims, PCE Price Index, EU Council President Michel visits China, Speeches from Fed’s Barr, Bowman & Logan, ECB’s Lane & Elderson

 

Biggest FX Mover @ (07:30 GMT) NZDUSD (+1.57%) rallied from under 0.6200 yesterday and trades at 0.6320 now, next resistance at 0.6350. MAs aligning higher, MACD histogram & signal line positive & rising,  RSI 65.00 & falling having been OB, H1 ATR 0.00203, Daily ATR 0.0083.

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Stuart Cowell

Head Market Analyst

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