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09/01/2025 - 08:58 UTCThe U.S. dollar posted moderate gains against most major currencies on Wednesday, with the dollar index up by 0.29% of its value, hovering around yearly highs amid positive manufacturing and employment data from the US that raises conviction that the Fed will cut interest rates at a slower pace in 2025 than initially anticipated.
Wall street painted a mixed picture on Wednesday, as the three main stock indices closed with mixed results. The US 500 experienced a modest decline even though technology stocks recovered some of their losses. This followed a period of stabilization in Treasury yields, despite the Federal Reserve's December meeting minutes suggesting a slower pace of interest rate reductions. While most major technology companies saw their stock prices decline, they managed to close above their session lows. Apple, Alphabet, Meta Platforms, and NVIDIA all experienced losses, with NVIDIA trading near unchanged. Palantir Technologies continued its downward trend, fueled by concerns about its high valuation. The stock has fallen significantly since reaching a record high last month.
Oil prices declined sharply on Wednesday with the two main benchmarks WTI and Brent down by 1.95% and 1.4% respectively due to the anticipated increase in oil production from countries outside the Organization of the Petroleum Exporting Countries (OPEC). This, combined with decreased demand from China, could lead to an oversupply of oil in the market this year. However, prices had risen last week due to worries about reduced oil exports from Russia and Iran following recent international sanctions.
On the cryptos front, Bitcoin and Ethereum continue to tumble for a second consecutive session on Wednesday, down 1.95% and 1.61% respectively, with Bitcoin dropping as low as $92.5K mark, its lowest in the last two weeks. This move reflects the growing expectations that the Fed will follow a much more conservative stance regarding interest rate cuts and the increase of money supply than initially anticipated.
For Thursday markets will most likely be focusing on Eurozone’s Retail Sales data to gauge economic health in the region while later in the day, speeches from FOMC members Harker, Breeden, Barkin, Schmid and Bowman will be in focus. Investors are eagerly awaiting the Friday’s Non-Farm Payrolls and unemployment reports, to gauge the Federal Reserve's interest rate path.
The EUR/USD pair slipped back into the 1.0300 range on Wednesday as traders balanced mixed European economic data against the backdrop of Friday’s highly anticipated US Nonfarm Payrolls (NFP) release.
European data offered a mixed bag early Wednesday. German Retail Sales and the pan-European Producer Price Index (PPI) posted improvements from prior readings, but the gains were tempered by below-average results overall. Notably, EU PPI inflation remained in contraction territory, underscoring persistent challenges.
Across the Atlantic, the ADP Employment Change for December signaled a slowdown in hiring, coming in at 122,000 jobs added—well below the 140,000 forecast and the 146,000 reported for November. Adding to the mix, the Federal Reserve's latest meeting minutes revealed heightened apprehension over trade and economic policies.
Gold prices advanced on Wednesday after the US Federal Reserve (Fed) released its December meeting minutes, striking a neutral-to-slightly hawkish tone.
Market sentiment was also influenced by a CNN report suggesting that President-elect Donald Trump is considering declaring a national economic emergency. Such a declaration could allow for the imposition of tariffs on both adversaries and allies, adding to market uncertainties.
Despite mixed US labor market data, bullion buyers pushed gold prices higher. Looking ahead, gold traders are focused on Friday’s US Nonfarm Payroll (NFP) report and the University of Michigan (UoM) Consumer Sentiment Index.
Oil prices dropped more than 1% on Wednesday, pressured by a stronger US dollar and unexpectedly large builds in US fuel inventories. The decline reversed earlier gains driven by tightening supplies from Russia and other OPEC members.
The US Energy Information Administration (EIA) reported a significant rise in gasoline inventories, which increased by 6.3 million barrels last week to 237.7 million barrels—far exceeding analysts’ expectations of a 1.5 million-barrel build. Meanwhile, crude oil inventories declined by 959,000 barrels to 414.6 million barrels, a larger draw than analysts’ expectations for a 184,000-barrel decrease.
Adding to the downward pressure, a stronger US dollar made oil more expensive for holders of other currencies.
The U.S. main indexes posted a mixed picture on Wednesday while the Federal Reserve's December meeting minutes indicating a slower pace of future rate cuts.
Minutes from the Federal Reserve’s December 17–18 meeting revealed policymakers' preference for slowing the pace of rate cuts amid concerns about stalling disinflation.
Tech stocks rebounded from session lows, supported by the stabilization of Treasury yields after they surged to multi-month highs earlier this week. Despite the recovery, most megacap tech stocks ended the day in the red.
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