1. Dollar Benefits From Rate Hike Sentiment
The US dollar rose against all major currencies last week and added more gains on Monday morning as the US Federal Reserve is now widely expected to hike interest rates for the fourth time in December. The dollar edged marginally higher against the CAD and JPY, adding 0.03% against both rivals as of 7:45 GMT. It should also be noted that the US and China trade war is further boosting the safe haven appeal in the USD. Meanwhile, the sterling continues to remain under heavy pressure amid major Brexit developments. UK Prime Minister Theresa May survived a challenge from within her party last week, but the way forward is not clear and is a source of pressure on the sterling. EURGBP was last seen trading 0.1% higher at £0.8994 as of 7:45 GMT.*
2. US Brent Recovers After Demand Concerns
Brent crude prices slipped recovered on Monday after recording steep losses on Friday amid concerns over demand in the wake of weaker growth in major economies. Specifically, Chinese oil refinery output in November dropped, suggesting an easing in oil demand. U.S. oil markets managed to recover some of last week’s losses after news that U.S. drilling activity also fell to its lowest level in about two months. Specifically, International Brent crude oil futures (CL_BRENT) were last seen at $60.38 per barrel at 7:45 GMT, up 14 cents, or 0.2 percent, from their last close. U.S. West Texas Intermediate (USOIL) crude futures were last seen at $51.62 per barrel, up 15 cents, or 0.3 percent.**
3. US Stock Markets Record Steep Losses – Last Week’s Biggest Losers
US stock markets finished last the week in the red with all three major indices ending with big declines. Specifically, The Dow Jones Industrial Average (US30), closed down 497 points or 2%, while the S&P 500 (SPX500) Index fell 1.9% and the Nasdaq Composite Index (NAS100) declined 2.3% after economic data out of China missed economists’ forecasts. Friday’s three biggest losers were Johnson & Johnson (J&J), the stock finished Friday 10.04% lower at $133.00, Adobe (ADBE) shed 7.19% to close at $230.00, while Amazon (AMZN) dipped 4.01% at $1591.91. It is important to note that US Indices Futures point to slight recovery at the US open today.***
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*Source: Investing Dec 17, 2018 2:48 AM ET
**Source: Forbes Dec 17, 2018 5:53 AM ET
***Source: CNBC Dec 17, 2018 03:07 AM ET
