Global Economic Daily - 18/01/2024
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Quote of the Day: Living well is the best revenge. – George Herbert
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Equities:
Stocks fell Wednesday as Treasury yields tracked higher following the release of stronger-than-expected U.S. economic data. The?Dow Jones Industrial Average?declined 94.45 points to close at 37,266.67. This marked the third straight day of losses for the 30-stock index. The?S&P 500?slid 26.77 points to close at 4,739.21, and the?Nasdaq 100?lost 94.43, ending the session at 16,736.28. Retail sales data?for December came in stronger-than-expected, indicating a resilient consumer and putting aggressive rate cuts from the Federal Reserve into doubt. Retail sales were up 0.6% from November, and gained 0.4% month-over-month, excluding autos. Economists polled by Dow Jones had estimated a 0.4% month-to-month increase in retail sales and 0.2% ex-autos. The 10-year Treasury yield was last trading nearly 4 basis points higher at 4.102%, continuing its rise from Tuesday after Federal Reserve Governor Christopher Waller warned easing monetary policy may come slower than anticipated. So far, traders are pricing in a roughly 57% chance that the Federal Reserve begins cutting rates in March as hopes mount for a pivot. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.
Crude Oil:
Oil prices were near flat on Wednesday as severe cold that disrupted some U.S. oil production offset disappointing economic growth in China that stoked worries about energy demand. In North Dakota, a top oil-producing U.S. state, below-zero degrees Fahrenheit temperatures caused oil output there to fall by 650,000 to 700,000 barrels per day, more than half its typical output, the state said. Those supply concerns caused U.S. crude futures to pare losses late in the session, after earlier falling by over $1 a barrel. U.S. domestic crude stockpiles rose last week by 480,000 barrels, according to market sources citing American Petroleum Institute figures on Wednesday. U.S. government data on inventories is due Thursday. Weakening prices on Wednesday, China's economy in the fourth quarter?expanded by?5.2% year on year, missing analysts expectations and calling into question forecasts that Chinese demand will fuel 2024 global oil growth. he economic data doesn't end the headwinds over crude oil demand, the Chinese outlook for 2024 and 2025 is still bleak. China's oil?refinery throughput?in 2023 rose 9.3% to a record high, indicating elevated demand even if it lagged some analysts' expectations. Investors kept an eye on naval and air conflicts in the Red Sea, which so far has not supported oil prices despite?mounting concern?about tankers having to pause or reroute, raising shipping costs and slowing deliveries. Tensions remained high after the U.S. mounted fresh strikes against Iran-aligned Houthi militants in Yemen on Tuesday after a Houthi?missile?hit a Greek vessel. An optimistic OPEC stuck to?its forecast?for relatively strong growth in global oil demand in 2024. OPEC said that 2025 will bring a "robust" increase in oil use, led by China and the Middle East. TECHNICAL OUTLOOK - The crude is barely above the 14, 21 day moving average.
Metals:
Gold prices are near steady and silver a bit lower in early U.S. trading Wednesday, just ahead of a big batch of U.S. economic data releases that could impact today’s price action in the metals. Technically, the gold futures bulls have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in March futures above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. The silver bears have the overall near-term technical advantage. Prices are in a choppy, five-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $22.26. TECHNICAL OUTLOOK - The gold and silver are below the 14, 21 day moving average.
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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
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