Indices at a Standstill
19 December 2023
As we step into another trading day, the market's pace seems to be gradually slowing down, reflecting the typical pre-holiday calm. While currencies exhibit some interesting dynamics, indices and stocks are entering a phase of reduced volatility and momentum. This trend is likely to intensify as we approach the festive period.
Starting with the currency market, today's spotlight falls on the stronger currencies from the antipodes – the New Zealand and Australian Dollars. Both are showing robust performance, contrasting with the Japanese Yen, which is currently the weakest link in the currency chain. This continuation of Monday's trend underscores a noteworthy correction in the Yen's trajectory.
Switching our attention to the indices, we observe a notable stagnation. Major indices like NASDAQ and S&P 500 hover around their long-term highs, exhibiting minimal movement. Conversely, European indices, particularly the DAX, are experiencing a mild downturn, albeit with marginal losses.
The commodities market presents a mixed scenario. Precious metals like gold and silver are replicating last week's downtrend. However, oil markets painted a different picture on Monday. Both Brent and WTI crude witnessed a bullish surge, breaking through the neckline of an inverse head and shoulders pattern. But today's session hints at a potential bearish correction, which could spell a false breakout from the neckline. If the prices decline further, it could signal a significant sell opportunity. Conversely, if the breakout is sustained, it indicates a solid buyer's market. The outcome of this tussle will be a key factor to watch.
On the economic front, the calendar is bustling with activity. We've already seen the release of the monetary policy meeting minutes from Australia and the monetary policy statement from Japan, with no changes in the interest rate. Looking ahead, the focus shifts to Canadian inflation data, expected to show a slight decrease on a monthly basis.