On Friday, November 15, Asian markets experienced a mixed performance, affected by disappointing Chinese economic data and a negative close on Wall Street the previous day. While China saw an increase in Retail Sales, Industrial Production and Fixed Asset Investment numbers fell short of expectations, causing uncertainty and volatility in the markets. The US Federal Reserve’s future interest rates also remain uncertain, with expectations of a rate cut in December decreasing after Fed Chair Jerome Powell’s hawkish comments and the release of hot Producer Price Index data.
Powell emphasized the need for caution in reducing rates, citing ongoing economic growth, a strong job market, and stable inflation as reasons to proceed carefully. This caution has led to a drop in market expectations for a rate cut next month, with the likelihood of a 25 basis points reduction declining from 83% to 69%. The change in sentiment towards fewer rate cuts has boosted the US Dollar and Treasury bond yields, with traders eagerly awaiting US Retail Sales and Industrial Production data for further direction. Additionally, a couple of Fed policymakers are scheduled to speak later in the trading day.
In terms of currency performance, the US Dollar was strongest against the Japanese Yen, while other major currencies experienced mixed changes against the USD. The UK is set to release third-quarter GDP data and Manufacturing Production numbers, with markets closely watching European Central Bank officials amid expectations of aggressive policy easing. USD/JPY reached four-month highs before retracing gains, while Antipodeans like AUD/USD and NZD/USD recovered from multi-month lows. GBP/USD remains below 1.2700, awaiting key data releases from the UK and the US.
Gold faces resistance at $2,545 as the US Dollar remains in demand. Overall, market sentiment remains cautious amid mixed economic data and uncertainty surrounding the Fed’s interest rate decisions. Traders are closely monitoring developments in the US and global economy for potential trading opportunities.
