Daily summary: Wall Street retreats as FED remains hawkish

• European indices extended gains for a third consecutive session on Wednesday, with DAX adding 2.18% amid signs that inflation in the Eurozone may have reached its peak.

• Inflation in France unexpectedly eased in December, in line with German figures released yesterday, Meanwhile composite PMIs for the major economies from the Old continent continued to point to a contraction in December, although the rate of decline slowed and was smaller than initially expected.

• Three major Wall Street indices trimmed early gains and are now trading around the flatlines as latest FOMC minutes showed that no participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023 and hawkish approach will be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2%.

• Data from the US turned out to be mixed. US job openings fell slightly to 10.45 million in November but remained at considerably high levels, suggesting that wages would increase further as companies try to attract employees.

• On the other hand, the ISM Manufacturing PMI fell for a second consecutive month to 48.4 last month, however the sub-component-Employment Index increased by 51.4, returning into expansion, which may be a sign of potential improvement in the labor market.

• WTI crude fell over 5.0% after Reuters reported Saudi Arabia planning to lower crude prices for deliveries to Asia. Also the uncertain covid situation in China sparks additional demand concerns.

• Mixed moods prevail on the precious metals market. Gold pulled back from session high at $1865 per ounce, however still trades 0.90% higher, while silver once again failed to stay above psychological resistance at $24.00 per ounce

• The dollar index remains above the 104.00 level as investors digest latest FOMC Minutes and US data. The EURUSD pair continues to hover around major support at 1.0600. Greenback strengthened against JPY however weakened sharply against risk sensitive currencies like AUD and CAD.

• Major cryptocurrency are trading higher despite rather negative sentiment. Bitcoin gains around 1.0% while Ethereum briefly jumped 5.0%, however buyers failed to break above local resistance at $1270.

CHNComp jumped over 5.0% during today's session, moving further away from key support at 6700 pts. If current sentiment prevails, upward move may accelerate towards local resistance at 7765 pts, which coincides with 38.2% Fibonacci retracement of the downward wave launched in February 2021. Source: xStation5