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US Consumer Confidence boosted the sentiment


US equities rallied for a second day, as an improvement in consumer confidence and better-than-expected earnings boosted sentiment. Treasuries were mixed after Tuesday’s selloff following the Bank of Japan’s unexpected increase in its yield trading band ebbed. Market participants did not hear from Fed speakers this week, which also helped fuel the so-called ‘Santa rally’ in stocks.

The central bank’s policymakers are expected to become incrementally more dovish in 2023 with a new roster of senior officials. Apart from this, fresh US data on Wednesday also indicated that the Fed’s persistent rate hikes are serving their purpose by slowing the economy, but a recession may still be at bay. It’s also worth noting that Micron Technology, the largest US maker of memory chips, reported earnings after the markets closed on Wednesday.

The benchmark, both the S&P500 and the Dow Jones Industrial Average rose and the Nasdaq 100 snapped a five-day drop on Wednesday. All eleven sectors in S&P 500 stayed in the positive territory, especially the Energy sector performed the best among all groups, rising 1.89% daily for the day. Besides, the MSCI world index edged higher by 0.2% on Wednesday.

Main Pairs Movement

The US Dollar index edged higher by 0.27% daily for the day, as investors reassessed the Bank of Japan’s surprising increase in yield limit. The DXY index mildly moved upward on Wednesday, erasing part of the losses caused by a sudden policy adjustment by the Bank of Japan.

The GBPUSD tumbled by 0.83% daily for the day. In absence of an economic calendar, the pessimistic economic outlook dominated the movement of the pounds pair. The cables dropped hugely during the early US trading session. In the meantime, the EURUSD also edged lower by 0.18% on Wednesday.

The gold slid by 0.20% for the day, as the pair entered into a consolidation phase following a surge on Tuesday. The yellow metal has not made any decisive move on Wednesday, as the investors are awaiting more economic data for more clues.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
GBPGDP (QoQ)15:00-0.2%
GBPGDP (YoY)15:002.4%
USDGDP (QoQ) (Q3)21:302.9%
USDInitial Jobless Claims21:30222K