Market Update – December 21

The USD Index stuck at 103.50 bottom. Stocks pick up overnight, after they were pummeled Tuesday by the BoJ’s surprise hawkish tweak in its yield curve control. Yields: JGB 2-year rose above zero for the first time since 2015. 10-year Treasury yield cheapened 11 bps to hit 3.706%. The curve inversion unwound another 10 bps on the day to -57.9 bps and compares to the -84 bps two weeks ago.
EUR -jumps 20 pips at the EU open higher to 1.0630. German GfK consumer confidence improved to -37.8, a tad better than anticipated. All in, a number that ties in with expectations for a shallow and short-lived recession, rather than a protracted slowdown.
JPY – trimmed -4% to 130.55. – Higher yields at home could make it more attractive for Japanese investors to repatriate some funds.

Stocks – Nikkei lost a further -0.7% after the BoJ’s curve ball yesterday. The ASX bounced 1.3%, and China bourses are also higher – as are stock futures across Europe and the US. The NASDAQ flat at 33,230, with the S&P 500 at 3,868, & the Dow up by 0.25%. #TSLA collapse continues -8% yesterday.
USOil – flat at $75, with Brent trading at $80.01 per barrel.
Gold – higher held at $1,815.

Today – Canadian Inflation & US Consumer Confidence. Ukrainian President Volodymyr Zelenskiy is expected to travel to Washington to meet President Joe Biden.

Biggest FX Mover @ (07:30 GMT) NZDUSD (-0.67%). Turned below 20-DMA. Intraday MAs flattened, MACD histogram & signal line negative and falling. RSI 40 & rising indicating a possible recovery or steadiness, H1 ATR 0.00151, Daily ATR 0.0084.

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Andria Pichidi

Market Analyst

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