Summary:
Wall Street stocks mostly held on to their previous gains on Friday, while the dollar stayed near 15-month lows, after U.S. inflation data unleashed a wave of investor optimism that the Fed was nearing the end of its rate-hiking cycle.
Wall Street stocks mostly held on to their previous gains on Friday, while the dollar stayed near 15-month lows, after U.S. inflation data unleashed a wave of investor optimism that the Fed was nearing the end of its rate-hiking cycle.
The government reported that U.S. import prices dropped 0.2% last month, and U.S. consumer sentiment jumped to the highest level in nearly two years.
Oil prices fell more than a dollar a barrel. Gold prices eased, down about 0.3%, but were on track for their biggest weekly gain since April, after signs of slowing U.S. inflation.
Commodities
Prices softened after both benchmarks last week notched a third straight week of gains and touched their highest levels since April when output was shut at oilfields in Libya and Shell halted exports of a Nigerian crude, tightening supply.
In Russia, oil exports from western ports are set to fall by some 100,000-200,000 bpd next month from July levels, a sign Moscow is making good on its pledge for fresh supply cuts in tandem with OPEC leader Saudi Arabia, two sources said on Friday, citing export plans.
On the economic front, stronger-than-expected consumer sentiment data in the U.S. dampened expectations that the Federal Reserve was set to end its rate hiking cycle at next week's FOMC meeting, IG analyst Tony Sycamore said.
There is also some nervousness among traders ahead of another big week ahead for economic data from China, the UK and Japan, he added.
Forex
The dollar was down 2.3% last week, the biggest weekly decline since November. Markets are still pricing in a 95% chance of a 25 basis point hike from the Fed this month, CME's FedWatch tool showed, but no more for the rest of the year.
Investors have been betting on a turn lower in the dollar for months, with short positions more than doubling over the month to July 7, according to data from CFTC, although they remain far off the levels in 2021.
Sterling remained flat amid weak UK economic data and holiday trading, with a bearish outlook, though market movement remains limited.
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The Australian dollar stays near a two-year low despite China's stimulus plans, with strong fiscal support and robust iron ore demand offering relief.
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The euro is near a two-year low, with weak eurozone growth, falling German confidence, and the ECB cautious on easing despite inflation stabilization.
2024-12-24
