Financial Breakfast on December 24: U.S. economic slowdown boosts risk appetite, dollar falls, Russia signals crude oil production cuts
On Saturday (December 24), Beijing time, the dollar fell once morest most currencies in volatile and light trading on Friday. Data showed that the U.S. economy is gradually cooling, which strengthened expectations that the Federal Reserve will raise interest rates more modestly, driving investors Gold prices rose on improved risk appetite; oil prices settled around $3 a barrel higher following Russia said it may cut crude output in response to G7 price caps on Russian exports.
Commodity closing situation:Brent crude settled at $83.92, up 3.6%, while U.S. crude settled at $79.56 a barrel, up 2.7%. Both benchmark contracts posted their biggest weekly gains since October. U.S. gold futures settled up 0.5 percent at $1,804.2.
U.S. stocks close:The Dow Jones index closed up 0.53% at 33203.93 points; the S&P 500 index closed up 0.59% at 3844.76 points; the Nasdaq composite index closed up 0.21% at 10497.86 points.
precious metal
Gold prices rose on Friday ahead of the long holiday weekend, as data showed U.S. inflation was cooling, though not so markedly that the Federal Reserve slowed rate hikes. Gold rose regarding 0.2% for the week, its best performance in three weeks.
U.S. consumer spending rose 0.1 percent in November following climbing 0.4 percent in October, while inflation cooled further. Jim Wyckoff, senior analyst at Kitco Metals, said gold was higher on fresh speculative buying ahead of the new year as inflation moved closer to expectations, on bets that larger funds might be long bullion at the start of the year.
Gold prices fell more than 1% on Thursday following U.S. gross domestic product data highlighted a faster rebound in the country’s economy than previously estimated, potentially making the Federal Reserve more eager to fight inflation. While gold is seen as an inflation hedge, higher interest rates have a big impact on non-yielding gold. Gold prices are on track for a second straight year of losses, down nearly 2%.
Spot silver rose 0.6% to $23.70 an ounce, platinum jumped 4.3% to $1,019.72 and palladium rose 3.6% to $1,741.75. All three precious metals were on track for weekly gains.
Oil prices settled around $3 a barrel higher on Friday following Russia said it may cut crude output in response to a Group of Seven price cap on Russian exports. Oil prices were set for a second straight week of gains.Russia may cut oil production by 5% to 7% in early 2023 as it deals with price caps, RIA Novosti quoted Deputy Prime Minister Novak on Friday.
Russia’s Baltic oil exports in December might have fallen 20 percent from the previous month following the European Union and the Group of Seven nations imposed sanctions and price caps on Russian crude starting Dec. 5, according to traders and Archyde.com calculations.
Eli Tesfaye, senior market strategist at RJO Futures, said, “”Russia may cut production or give more impetus to the bulls. If global demand continues at the current pace, this cut might have a significant impact. We may stay in the daily market.” Barrels in the $80 range. “
Crude oil demand and production are likely to fall in the coming days as a massive winter snowstorm is set to hit much of the U.S. and keep people at home. Several of the largest U.S. refineries were shut due to the extreme cold, while production facilities in Texas and North Dakota were also shut.
U.S. gasoline and ultra-low sulfur diesel futures both rose more than 5% on expectations of refinery cuts and a surge in demand for heating oil.
foreign exchange
The dollar fell once morest most currencies on Friday in volatile and thin trade as data showed the U.S. economy is gradually cooling, reinforcing expectations for smaller rate hikes by the Federal Reserve and improving investor risk appetite.
The U.S. personal consumption expenditures price index rose 0.1 percent in November following climbing 0.4 percent in October. In the 12 months through November, the PCE price index rose 5.5 percent following rising 6.1 percent in October.
Excluding volatile food and energy components, the PCE price index rose 0.2 percent in November following rising 0.3 percent in October. The core PCE price index rose 4.7 percent in November from a year earlier, following rising 5.0 percent in October. The Fed tracks the PCE price index to set monetary policy.
The S&P 500 and Dow Jones Industrial Average climbed on Friday, while commodity currencies such as the Australian, New Zealand and Canadian dollars, which are highly sensitive to risk sentiment, also rose once morest the greenback. Investors also sold safe-haven Treasuries, pushing yields higher.
Amo Sahota, executive director of Klarity FX, said, “The stock market feels more comfortable today, there seems to be no panic, the inflation data is moving in the right direction, but not fast enough, and the growth of the US economy has not been significantly hindered. Still growing slightly , so far there is no economic depression.”
The Fed is widely expected to raise rates by just 25 basis points at its next policy meeting following a number of aggressive hikes. In followingnoon trade, the euro rose 0.2% to $1.0616.
The Australian, New Zealand and Canadian dollars all gained once morest the U.S. dollar. The Australian dollar was up 0.4% at $0.6710 and the New Zealand dollar was up 0.6% at $0.6287. The U.S. dollar was down 0.4% once morest the Canadian dollar at C$1.3599.
According to Statistics Canada, the Canadian economy grew by 0.1% in October from September, in line with expectations, and GDP is expected to grow by another 0.1% in November. That also boosted the Canadian dollar.
USD/JPY rose 0.4% to 132.89. However, the yen was on track to gain 2.7 percent on the week following the Bank of Japan adjusted a key policy in the government bond market earlier this week.
A separate report on Friday showed new orders for U.S.-made capital goods edged up in November while shipments fell, suggesting business spending on equipment will slow this quarter as higher borrowing costs cool demand for goods.
Orders for nondefense capital goods excluding aircraft, a closely watched measure of business spending plans, rose 0.2% last month, data showed. Orders for core capital goods rose 0.3 percent in October. However, shipments of core capital goods fell 0.1 percent in November following rising 1.4 percent in October.
Separate data showed U.S. consumers expect price pressures to moderate next year, with a survey on Friday showing consumers’ one-year inflation expectations fell to their lowest level in 18 months in December. That was a key indicator mentioned by Fed Chairman Jerome Powell during a news conference. In a brutal year for global markets, the dollar has soared nearly 9 percent as the Federal Reserve aggressively raised interest rates to curb inflation.
Still, the dollar index has fallen more than 8 percent since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation fueling hopes that the Fed may soon end its tightening cycle. The U.S. dollar index was last little changed at 104.35.
market news
More than half of adults in the UK are buying less food and drink, survey says
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Germany to suspend aid to Iran
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In the first 11 months, my country’s absorption of foreign capital increased by 9.9% year-on-year
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Ukrainian Prime Minister: More than 200 batches of energy equipment have arrived in Ukraine
Ukraine’s Interfax News Agency reported on December 23 that Ukrainian Prime Minister Shmegal announced on the same day that more than 200 batches of energy equipment from partner countries had arrived in Ukraine. Shmegal said that these countries are currently assisting Ukraine with generators capable of powering important facilities including medical equipment and water company pumping stations. (CCTV News)
U.S. President Biden formally signs the National Defense Authorization Act for Fiscal Year 2023
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Russian Ministry of Emergencies: Snowstorm cuts power to 11 settlements in Primorsky Krai
According to the Russian Satellite News Agency, Alexander Kaplunov, deputy director of the Primorsky Territory Directorate of the Russian Ministry of Emergency Situations, said that the blizzard has raged in the region for the third consecutive day, nine settlements have completely lost power, and two other settlements have partially power off. Kaplunov noted that life support facilities are powered by backup power.
Thailand’s tourism industry exceeds target by 15% in year-end peak period
Thailand will exceed its latest foreign tourist arrival target by regarding 15%, driven by a surge in tourists from Europe and the United States at the end of the year, the Tourism Authority of Thailand said. Yuthasak Supasorn, head of the Tourism Authority of Thailand, said at least 11.5 million international tourists will come this year, out of a target of 10 million. The country had recorded 10.9 million foreign tourists as of Dec. 20, and an influx of tourists is expected in the final days of 2022, he said.
SNCF strikes deal with unions to cancel New Year holiday strike plans
On December 23 local time, the French National Railway Company (SNCF) announced that on the evening of the 22, the company’s top management had reached an agreement with the trade union to cancel the strike plan for railway employees during the New Year holiday. In addition, affected by the original strike plan, it is expected that during the traditional holidays this weekend, railway traffic will still be severely blocked, and the travel of French people will be affected. It is reported that the cause of the strike was that railway employees demanded higher wages.
Shanghai Disney will adjust ticket prices from June 23 next year: Regular day tickets will increase by 40 yuan
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