Wall Street climbs amid optimism for the banking sector
US stock indices climbed on Wednesday amid optimism for the US banking sector following statements by US Treasury Secretary Janet Yellen.
Yellen said that liquidity in the US banking sector remains good, and added the US economy remains strong as consumer spending strengthens.
Yellen expects US authorities to carry on efforts to control and cut down inflation in 2024 and 2025.
Allianz chieft economist Muhammad Al-Aryan said that while concerns about a US debt default have subsided, markets now are looking forward to the Fed's efforts to contain inflation.
Despite risks surrounding high interest rates in the last 15 months, the tech sector was particularly brilliant amid the AI industry boom.
Otherwise, earlier US data showed the goods trade deficit declining by 23.9% y/y, as exports rose 5.8%, and imports tumbled 2.3% in April.
On trading, Dow Jones rose 0.1%, or 33 points as of 15:22 GMT to 33,606, while S&P 500 climbed 0.1%, or 4 points to 4,288, as NASDAQ added 0.1%, or 21 points to 13,297.
Palladium declines amid expectations of oversupply concerns in 2024
Palladium prices declined on Wednesday even as the dollar dipped against most major rivals, but the industrial metals faced pressures amid expectations of oversupply next year.
Oversupply
The Russian Nornickel company expects the palladium market to shit to a surplus of 300 thousand ounces in 2024, compared to a deficit of 200 thousand ounces in 2023 .
Nornickel wasn't targeted by direct western sanctions, and alone it produces 40% of the global palladium output, used to reduce exhaust fumes in automobiles.
Nornickel noted that the automotive industry, which uses 80% of the global palladium supply, is slowly recovering following Covid 19 and the supply shocks of 2020 and 2021, and this demand on metals is expected to grow 1% this year.
The company noted that the increased consumption of palladium in 2022 and 2023 has been compensated with sales of accumulated inventories by car companies, with such inventory clearing efforts wrapping up in the second half of the year.
The major company, which witnessed a 16% collapse in net profits during 2022, expects a global deficit in the palladium market by 300 thousand ounces in 2023.
As for nickel, the company expects a surplus of 180 thousand tones in the nickel market during 2024.
Otherwise, the dollar index fell 0.4% to 103.7 as of 15:06 GMT, with a session-high at 104.3, and a low at 103.6.
On trading, palladium futures due in September fell 0.1% as of 15:07 GMT to $1,413.5 an ounce.
Loonie extends gains to four-week high ahead of Bank of Canada's decisions
Canadian dollar rose in European trade on Wednesday against a basket of major rivals, extending gains for another session against US dollar and hitting four-week high ahead of Bank of Canada's policy decisions.
Bank of Canada is likely to maintain interest rates unchanged for the third straight meeting, but it's possible for it to raise interest rates by 25 basis points.
USD/CAD fell 0.2% to 1.3375, the lowest since May 11, after closing up 0.3% on Tuesday against US dollar, the fourth profit in five days as global oil prices surged.
Bank of Canada is expected to issue its decision and policy statements at 14:00 GMT.
Canadian Rates
Canadian interest rates are standing at 4.5% currently, the highest since October 2007 before the financial crisis.
Estimates
Naturally, a surprise rate hike from BoC will bolster the loonie heavily against major rivals, however a decision in line with expectation wouldn't move the needle much.