Daily analysis 01 DESEMBER

  • Wall Street indices rallied yesterday as Powell paved a way for a smaller 50 basis point rate hike in December. S&P 500 gained 3.09%, Dow Jones moved 2.18% higher and Nasdaq surged 4.41%. Russell 2000 jumped 2.72%
  • Fed Chair Powell said that he does not want to over-tighten policy and moderating pace of rate hikes would make sense. However, he warned that any rate cuts are off the table in the near future
  • Indices from Asia-Pacific followed into footsteps of their US peers and also gained, although scale of moves was much smaller than on Wall Street
  • European index futures point to a higher opening of the cash session today with DAX futures trading around 200 points above yesterday’s cash close
  • US Treasury Secretary Yellen said that soft landing for the US economy remains possible
  • Chinese Vice Premier Chunlan said that coronavirus is becoming less severe and Chinese experience in fighting it may allow the country to enter a new stage of the pandemic. Those remarks were taken as a potential prelude to easing of restrictions
  • CNBC reports that White House considers release of emergency heating and crude oil reserves
  • Chinese Caixin manufacturing PMI moved from 49.2 to 49.4 in November (exp. 48.9)
  • South Korean exports plunged 14% YoY in November (exp. -11% YoY) while imports were 2.7% YoY higher (exp. 0.2% YoY). Semiconductor exports slumped 29.8% YoY
  • Cryptocurrencies jumped yesterday in the evening amid post-Powell increase in risk appetite. However, major coins are pulling back slightly today with Bitcoin dropping 0.2% and Ethereum trading 1% lower
  • Oil is trading slightly lower while precious metals benefit from USD weakening
  • JPY and NZD are the best performing major currencies while USD and CAD are top laggards

Nasdaq-100 (US100) rallied yesterday on dovish Powell and managed to break above the downward trendline.

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