Daily summary: Santa Claus rally threatened by central banks

• European indices finished today's session deeply in the red, with  DAX falling 3.28% as hawkish ECB spooked investors. 

• The European Central Bank lifted rates by 50 bps to the highest level since early 2009 and further significant increases are expected. Policymakers will start reducing the €5 trillion bond portfolio from March. President Lagarde made it clear that the ECB will not pivot and will not look at FED actions. 

• SNB and BoE both hiked rates by 50 bps to the highest since 2008, signaling more tightening may be needed to bring inflation back to the target.  

• Sharp sell-off can also be observed on Wall Street, where Dow Jones fell 2.70%, while S&P500 and Nasdaq lost 2.80% and 3.3% respectively and hover near 5 week lows. Fresh data showed retail sales and industrial production fell more than expected in November, raising concerns that Fed's relentless interest rate hikes will push the economy into a recession. 

• Netflix Inc (NFLX.US) fell 8% after a report that its new ad-supported subscription tier was falling behind the viewership goal it promised advertisers.

• Tesla (TSLA.US) stock erased early losses and is trading slightly above the flatline after Elon Musk sold another $3.6 billion in shares.

• NATGAS price jumped 10% to above the $7/MMBtu following a bigger-than-expected draw from reserves while fresh data showed that gas flowing towards US LNG terminals rose to 13 bcf per day on Thursday, the most since June, pointing to strong external demand.

• Oil prices fell 0.50% in a volatile session as hawkish central banks and disappointing Chinese factory data piled onto demand concerns.

• Precious metals fell in tandem with global equities amid a stronger dollar. Gold dropped over 1.5% and is trading around $1778 per ounce, while silver retreated to $23.00 mark.

• Dollar index bounced off 6-week lows above 104.50 level as investors turned towards safe haven assets. This dollar's strength was seen across the board, with some of the most pronounced buying activity against risk-sensitive currencies such as the Australian and New Zealand dollars. 

• GBPUSD pair dropped by over 200 pips. Hawkish ECB only briefly boosted the Euro against the greenback. The most popular currency pair jumped to fresh high at 1.0738 only to pull back sharply to key support at 1.0600. Currently USD and CHF are the best performing currencies while GBP and AUD lag the most.

• Major crypto currencies also retraced amid general risk aversion. Bitcoin fell 3.0% below $17400, while Ethereum lost nearly 4.0% and is trading around $1265 level.

AUSDUSD pair fell nearly 2.5% today and is currently testing key support at 0.6700, which managed to fend off sellers several times in the past. Source: xStation5