Fed on track for a rate hike in December

US stock market resumed the rally last week while the ICE US dollar index decline continued as the Federal Reserve minutes confirmed the central bank is on track for a rate hike in December. The SP 500 gained 0.9% and the ICE dollar index fell 1% for the week.

The ICE dollar index retreated in every session last week except Monday. It rose 0.4% on Monday as euro fell 0.5% on German coalition talks collapse Sunday. The dollar index plunged 0.7% Wednesday as the minutes raised the likelihood the Fed may slow the pace of rate increases in 2018 as some policy makers were worried about sluggish inflation. The slide continued next two sessions.

The SP 500 advanced in all sessions last week except Wednesday. It logged a record high jumping 0.7% Tuesday on positive economic data as existing home sales jumped 2% in October. The broad market closed at a fresh record high on Friday gaining 0.2% on preliminary estimates indicating higher sales in November compared to a year ago reading. SP 500, Dow and Nasdaq composite indexes posted their first weekly gain in three weeks with Dow adding 0.9% while the Nasdaq rose 1.6% over the four sessions.

The US GDP report and euro-zone inflation data with Chinese economic activity reports will be in the focus this week. Third quarter US GDP will be released on Wednesday, China’s manufacturing and composite purchasing managers indices and the euro-zone inflation report are due Thursday.