• CL-OIL


  • Cocoa-C


  • View more

The Fed said the economy can handle more tightening


US equities dropped on Thursday, as investors digested data validating the Federal Reserve’s assertion that the economy is robust enough to withstand more tightening.

Technology stocks were battered after a gloomy outlook from chipmaker Micron Technologies Inc. weighed on sentiment. Data released on Thursday painted a picture of a resilient economy, stoking concern that the Fed has a long way to go to subdue inflation. Initial jobless claims rose less than forecast in the week ended Dec. 17, underscoring the strength in the labour market. Third-quarter gross domestic product was revised to 3.2% – compared with a previously reported 2.9% advance – on firmer spending.

The benchmarks, the S&P500 dropped by 1.45% daily for the day, and the tech-heavy Nasdaq 100 declined as much as 4% but pared its drop to end Thursday down 2.5%. All eleven sectors in the S&P 500 stayed in the negative territory, and Consumer Discretion performed the worst among all groups, falling with 2.59% daily losses on Thursday. The Dow Jones Industrial Average fell 1%, but the MSCI world index rose 1.2% for the day.

Main Pairs Movement

The US Dollar edged higher by 0.23% daily on Thursday, as US third quarter Gross domestic product showed the resilience of the US economy, which mounting the bets of aggressive tightening policy. The DXY index witnessed some selling in the first half of Thursday, then managed to rebound to a daily high level of around 104.6 during the middle of US trading hours.

The GBPUSD tumbled with 0.36% daily losses for the day, as strong-than-expected US economic data weighed on the British pounds pair. The pair had slid since the middle of the UK trading session and dropped as much as 1%, but mildly climbed back to the 1.2030 level. In the meantime, the EURUSD was moving lower with 0.08% daily losses for the day.

The gold fell dramatically by 1.21% daily on Thursday, as strong US GDP data triggered a plunge in the dollar-denominated gold. The XAUUSD has fallen below the $1800 critical level during the American trading session.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
USDCore Durable Goods Orders (MoM) (Nov)21:300.1%
USDCore PCE Price Index (MoM) (Nov)21:300.2%
CADGDP (MoM) (Oct)21:300.1%
USDNew Home Sales (Nov)23:00600K
HolidayUnited Kingdom – ChristmasEarly close at 12:30N/A
HolidayNew Zealand – ChristmasEarly close at 12:45N/A
HolidayAustralia – ChristmasEarly close at 14:30N/A