Daily summary: European equities extend rally

7:15 PM November 24, 2022
  • European indices extended gains for a third session Thursday, with DAX added 0.78% to 14,547, the highest since June 7th after the latest data showed German business morale improved more than expected in November. 
  • ECB policymakers agreed that the central bank should continue normalizing and tightening monetary policy to combat high inflation, even in the event of a shallow recession, latest minutes showed. Today's release did not cause any major moves on the markets\

  • Investors also digested comments from several ECB members. ECB's Schnabel said price pressure is unlikely to ease quickly. She stressed the risk of opposing monetary and fiscal policies, caused mainly by energy prices. Expect to further raise interest rates as long as it is needed to bring inflation back to 2%. Meanwhile BOE's Ramsden expects that further increases to the bank rate are going to be required

  • Cash session on Wall Street did not take place today as US traders are off for the Thanksgiving holiday. Futures linked to major US indices rose slightly.

  • Oil prices also recorded small gains as Russia reaffirmed that it will not supply oil to countries supporting the price cap. Also surging Covid cases in China stoked fears of even tighter movement restrictions that could hurt energy demand in the world’s top crude importer. Brent manages  to stay above $85.00 level, while WTI bounced off key support at $76.20. 

  • NATGAS pulled back from recent highs amid uncertainties related to the Freeport LNG terminal and price cap on Russian gas. EU officials decided to postpone the approval of a proposed gas price cap at €275/MWh to mid-December. 

  • The dollar index plunged below 106 on Thursday, sliding for the third straight session toward its lowest levels since mid-August. Index is approaching key support at 105.30. Currently JPY and GBP are the best performing major currencies while USD and CHF lag the most.

  • GBP caught a bid following comments from BoE Deputy Governor Ramsden which said that he is biased towards further tightening.  

  • Major currencies jumped slightly on Thursday. Bitcoin briefly rose to $16750 area while Ethereum is testing key resistance at $1200. 

Despite overall dollar weakness, the USDCHF pair not only managed to stay above the long-term upward trendline, but also erased all losses and is currently trading slightly above the flatline. Source: xStation5

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