- European indices finished today’s session higher, with DAX 40 index jumped over 1% driven by gains among utilities and energy stocks, while adding 1% this week to post its seventh consecutive weekly gain.
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President Christine Lagarde said the central bank would keep hiking interest rates and may even need to restrict growth to rein on inflation. Meanwhile, the ECB has announced that banks are due to repay €296 billion in multi-year loans from the ECB next week, less than the €500 billion expected by markets, in the first voluntary repayment window of the ECB's TLTRO.
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Wall Street indices erased early gains as most of the optimism about upbeat earnings was offset by persistent concerns about a Fed-induced downturn. FED Collins said 75 bp rate hike remains on table and emphasized that the US central bank most likely will have to raise interest rates even more. The Dow is virtually flat for the week, while the S&P 500 and Nasdaq have lost about 0.5% each.
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On the data front, existing home sales decreased ninth time in a row to 44.30 million in October from 47.10 million in September, still slightly above market estimates of 4.38 million. It is the lowest reading since December of 2011.
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Oil prices extended downward move on Friday as China reportedly asked the Saudis to ship less crude in December. Elsewhere the European Union plans to set a price cap on Russian oil on Wednesday.
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The New Zealand dollar, British pound and US dollar are currently the best performers in the Forex market, while CAD and EUR lag the most. Greenback strengthened following hawkish remarks from several FED members, which put pressure on precious metals. Gold fell below the $1750 mark, while silver hovers below $21.00 level.
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Yesterday, Bullard said that the interest rate is not restrictive enough and that the tightening cycle may end up in the range of 5-7%. It is worth remembering that 5% has already been priced in by the markets, which is not the case when it comes to 7%, therefore the dollar still has some space to move in the longer term.
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Cryptocurrencies pulled back slightly following the news that record number of BTC has been moved into Binance exchange, which raises concerns that long-term holders may want to sell their coins. On the other hand, Binance is considered as safest crypto exchange, which may be the reason behind today's transfers. Nevertheless Bitcoin price fell below $16600, while Ethereum is testing major support at $1200.
NZDUSD pair once again failed to break above key resistance at 0.6240. If sellers manage to regain control, retest of local lows at 0.6065 cannot be ruled out. Source: xStation5
