Morning wrap (16.12.2022)

• US indices finished yesterday's trading significantly lower as hawkish ECB added to post-FOMC pressures. S&P 500 dropped 2.49%, Dow Jones moved 2.25% lower and Nasdaq slumped 3.23%. Russell 2000 finished trading 2.52% lower

• Indices from Asia-Pacific also traded lower. Nikkei dropped 1.9%, S&P/ASX 200 moved 0.8% lower, Kospi declined 0.2% and Nifty 50 dropped 0.4%. Major indices from China traded 0.2-0.8% lower

• DAXfutures point to a higher opening of the European cash session

• According to Philadelphia Fed quarterly report, US economy added just 10.5k new jobs in Q2 2022, instead of 1.05 million estimated earlier

• Reuters reports that ECB President Lagarde offered to conduct two back-to-back 50 bp rate hikes in order to win support from members who opted for a 75 bp rate move yesterday

• Major banks boosted forecasts for peak ECB rate following yesterday's hawkish meeting. JPMorgan now expects ECB rates to peak at 3.25% (2.5% previously), Societe Generale hiked their forecast from 3.00% to 3.75% while Goldman Sachs now expects ECB to hike by 50 bp in February and March, followed by 25 bp in May

• Japanese manufacturing PMI ticked lower in December, from 49.0 to 48.8 (exp. 49.0)

• Australian manufacturing PMI dropped from 51.3 to 50.4 in December, while services gauge moved from 47.6 to 46.9

• New Zealand manufacturing PMI dropped from 49.3 to 47.4 in December

• Cryptocurrencies trade higher although the scale of gains is relatively small. Bitcoin adds 0.4%, Ethereum trades 0.6% higher and Dogecoin gains almost 2%

• Energy commodities pull back with Brent and WTI trading 0.4% lower and US natural gas prices plunging 3%

• Precious metals gain amid USD weakening - gold adds 0.4%, silver gains 0.1% and platinum trades 0.5% higher

• NZD and JPY are the best performing major currencies while USD and AUD lag the most

Nasdaq-100 (US100) plunged yesterday as hawkish ECB added to post-FOMC pressures. US tech index slumped over 3% and is now testing 11,500 pts support zone, which acts as the lower limit of the ongoing short-term trading range. Source: xStation5