Archive for Economics & Fundamentals – Page 2

The SNB unexpectedly cut the interest rate by 0.5%. Natural gas prices reached a two-week-high

By JustMarkets 

The Dow Jones Industrial Average (US30) was down 0.53% on Thursday. The S&P 500 Index (US500) decreased by 0.54%. The Nasdaq Technology Index (US100) fell by 0.68%. The losses came amid signs of stagflation after US weekly jobless claims unexpectedly rose to an 8-week high, and November Producer Prices rose faster than expected, the fastest pace in nearly 2 years.

US weekly jobless claims unexpectedly rose by 17,000 to an 8-week high of 242,000, indicating a weaker labor market than expected down to 220,000. The US final Consumption Goods and Services Price Index for November rose by 3.0% y/y, exceeding expectations of 2.6% y/y and the largest increase in over a year. In addition, the November Price Index, excluding food and energy, was unchanged from October at 3.4% y/y, exceeding expectations of 3.2% y/y. Markets estimate the odds of a 25 bps rate cut at the December 17–18 FOMC meeting at 95%.

Adobe (ADBE) fell more than 13%, topping the list of losers in the S&P 500 and Nasdaq 100, after estimating 2025 revenue of $23.30-$23.55 bln, weaker than the consensus projections of $23.78 bln.

Equity markets in Europe were mostly flat yesterday. Germany’s DAX (DE40) rose by 0.13%, France’s CAC 40 (FR40) closed down 0.03%, Spain’s IBEX 35 (ES35) fell by 0.21%, and the UK’s FTSE 100 (UK100) closed up 0.12%. The ECB, as expected, cut the deposit rate by 25 bps to 3.00% from 3.25% and abandoned previous language that monetary policy will remain “sufficiently restrictive for as long as necessary.” The ECB lowered its 2024 eurozone GDP estimate to 0.7% from a previous projection of 0.8% and its 2024 Eurozone inflation prognosis to 2.4% from a previous one of 2.5%. ECB President Lagarde said the latest information indicates that the eurozone economy is losing momentum and will strengthen more slowly than expected.

The Swiss National Bank (SNB) cut its key rate by 50bps to 0.5% in December 2024, beating market expectations for a smaller 25bps cut. This is the fourth consecutive rate cut and the sharpest since January 2015, bringing borrowing costs to the lowest since November 2022. The decision came amid a decline in inflation from 1.1% in August to 0.7% in November. Inflation is projected to average 1.1% in 2024, 0.3% in 2025, and 0.8% in 2026, staying within the SNB’s target range. Swiss GDP growth is expected to be around 1% this year, rising slightly to 1–1.5% in 2025, supported by recent rate cuts.

Oil prices are targeting their first weekly rise in three weeks, helped by the prospect of tighter sanctions and hopes for improved Chinese demand following Beijing’s pledge to ease monetary policy next year. OPEC also cut its 2024 demand growth prognosis again, the fifth consecutive month of lower demand growth.

The US natural gas prices (XNG/USD) climbed above $3.4/MMBtu to the highest level in more than two weeks, driven by larger-than-expected withdrawals from storage reported by the EIA. For the week ending December 6, US utilities withdrew 190 billion cubic feet of gas from storage, well above the 170 billion cubic feet prognosis. This withdrawal was well above last year’s 72 Bcf and the five-year average of 71 Bcf for the same period.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell by 1.09%, China’s FTSE China A50 (CHA50) rose by 1.38%, Hong Kong’s Hang Seng (HK50) gained 1.28%, and Australia’s ASX 200 (AU200) was negative 1.37%.

The New Zealand dollar fell as low as 0.575 USD on Friday, ending at its weakest level in two years under pressure from a strong US dollar. The US dollar strengthened after US Producer Inflation rose more than expected, pushing Treasury yields higher. Domestically, expectations of a significant rate cut by the Reserve Bank of New Zealand have further weighed on the local currency. Markets currently see a 66% chance of a 50bp rate cut at the central bank’s February meeting, with the rate prognosis to fall to 3.10% by the end of 2025.

S&P 500 (US500) 6,051.25 −32.94 (−0.54%)

Dow Jones (US30) 43,914.12 −234.44 (−0.53%)

DAX (DE40) 20,426.27 +27.11 (+0.13%)

FTSE 100 (UK100) 8,311.76 +10.14 (+0.12%)

USD Index 106.97 +0.26 (+0.25%)

News feed for: 2024.12.13

  • Japan Tankan Manufacturing (q/q) at 01:50 (GMT+2);
  • Japan Non-Tankan Manufacturing (q/q) at 01:50 (GMT+2);
  • German Trade Balance (m/m) at 09:00 (GMT+2);
  • UK GDP (m/m) at 09:00 (GMT+2);
  • UK Industrial Production (m/m) at 09:00 (GMT+2);
  • UK Manufacturing Production (m/m) at 09:00 (GMT+2);
  • Eurozone Industrial Production (m/m) at 12:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

The Bank of Canada cut the rate again by 0.5%. Today, traders’ attention is directed to the SNB meeting

By JustMarkets

At the end of Wednesday, the Dow Jones Index (US30) fell by 0.22%. The S&P 500 Index (US500) is up 0.82%. The Nasdaq Technology Index (US100) jumped 1.85% to an all-time high. The US stocks extended early gains, reversing earlier session declines this week as inflation data offered no surprises and bolstered bets that the US Federal Reserve will cut rates next week. Markets rate the odds of a 25bp rate cut at the December 17–18 FOMC meeting at 95%. The US Consumer Price Index for November rose by 0.3% m/m and 2.7% y/y, which aligns with expectations. In addition, the Consumer Price Index, excluding food and energy, rose by 0.3% m/m and 3.3% y/y, which aligns with expectations.

Technology stocks led the gains, helped by low bond yields and bets that the incoming Trump administration may reduce sector regulation. Tesla (TSLA) jumped 3.6%, up nearly 70% since the November election, while Meta (META) added 5.3%, Nvidia (NVDA) jumped 2.6%, and Broadcom (AVGO) gained 5%.

At its December meeting, the Bank of Canada (BoC) cut its key interest rate by 50 bps for the second consecutive time, as expected by the markets. This brought the cumulative rate cut to 175 bps from this cycle’s peak of 5%. Nevertheless, the rhetoric of Central Bank policymakers suggests that there will be no more aggressive rate cuts next year, and officials have backtracked on the statement that borrowing costs will be reduced if the base case scenario continues. The sharp interest rate cut followed data that Canada’s GDP grew at a 1% annualized rate in the third quarter, below the Central Bank’s projections, and fourth-quarter growth risks also falling short of estimates.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 0.34%, France’s CAC 40 (FR40) closed higher by 0.39%, Spain’s IBEX 35 (ES35) fell by 1.47%, and the UK’s FTSE 100 (UK100) closed up 0.26%.

The Swiss National Bank (SNB) is expected to meet today. Most economists expect a 25bps rate cut, but some economists expect a 0.5% rate cut. This is even though the current rate is at 1%. The Swiss franc has declined slightly over the past few months, but mainly because markets expect a significant rate cut towards the lower boundary of zero. A 0.25% rate cut is already factored into the price, so it will only add volatility to currency pairs with the CHF. But if the SNB surprises and goes for a 0.5% rate cut, the franc could come under selling pressure.

WTI crude oil prices jumped 2.5% to $70.29 a barrel on Wednesday, driven by the European Union’s approval of a new package of sanctions targeting Russian oil flows, adding to supply concerns. However, gains were tempered as the US EIA reported a larger-than-expected increase in gasoline and distillate inventories, signaling weak domestic fuel demand. Adding to market uncertainty, OPEC cut its estimates for global oil demand growth in 2024 and 2025 for the fifth consecutive month, citing weak demand in China and rising non-OPEC+ supply. OPEC+ had earlier postponed plans to increase production, reflecting cautious market dynamics.

The US natural gas prices (XNGUSD) climbed above $3.25/MMBtu, the highest in more than a week, mainly due to projections of colder weather and increased heating demand. In addition, export liquefied natural gas (LNG) plants are receiving more natural gas, averaging 14.0 Bcf/d in December compared to 13.6 in November.

Asian markets were relatively flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.01%, China’s FTSE China A50 (CHA50) gained 0.44%, Hong Kong’s Hang Seng (HK50) fell by 0.77%, and Australia’s ASX 200 (AU200) was negative 0.47%.

Australia’s seasonally adjusted unemployment rate fell to 3.9% in November 2024 from 4.1% in the previous three months, defying market estimates of 4.2%. It was the lowest unemployment rate since March as the number of jobless fell by 27,000 to an 8-month low. Market sentiment shifted sharply after the data release, as the implied probability of a February rate cut fell to around 50% from 68% before publication.

S&P 500 (US500) 6,084.19 +49.28 (+0.82%)

Dow Jones (US30) 44,148.56 −99.27 (−0.22%)

DAX (DE40) 20,399.16 +70.00 (+0.34%)

FTSE 100 (UK100) 8,301.62 +21.26 (+0.26%)

USD Index 106.65 +0.25 (+0.23%)

News feed for: 2024.12.12

  • Australia Unemployment Rate (m/m) at 02:30 (GMT+2);
  • Sweden Inflation Rate (m/m) at 09:00 (GMT+2);
  • Switzerland SNB Interest Rate Decision at 10:30 (GMT+2);
  • Switzerland SNB Monetary Policy Assessment at 10:30 (GMT+2);
  • Switzerland SNB Press Conference at 11:00 (GMT+2);
  • Eurozone ECB Interest Rate Decision at 15:15 (GMT+2);
  • Eurozone ECB Monetary Policy Statement at 15:15 (GMT+2);
  • US Producer Price Index (m/m) at 15:30 (GMT+2);
  • US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • Eurozone ECB Press Conference at 15:45 (GMT+2);
  • US Natural Gas Storage (w/w) at 17:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Inflation is rising in Germany. Silver prices hit a one-month high

By JustMarkets

The Dow Jones (US30) was down 0.35% on Tuesday. The S&P 500 Index (US500) closed negative 0.30%. The Nasdaq Technology Index (US100) fell by 0.34%. Investors were cautious ahead of Wednesday’s expected consumer inflation report, which could significantly impact Federal Reserve policy. Despite the market decline, the indices remain near record highs, driven by optimism that the inflation data could reinforce expectations of a soft landing and pave the way for a Fed rate cut in December. The Consumer Price Index is expected to rise slightly to 2.7% y/y in November from 2.6% y/y in October. Meanwhile, the Core CPI (excluding food and energy) is expected to be unchanged from October at 3.3% y/y in November.

Oracle (ORCL) is down more than 6% after reporting adjusted second-quarter revenue of $14.06 billion, below the consensus estimate of $14.12 billion. EBay (EBAY) shares are down more than 2% after Jefferies downgraded the stock to “unweighted” from “hold” with a $52 price target. Alphabet (GOOG) is up more than 5% and led the Nasdaq 100 stocks higher after it disclosed a breakthrough in quantum computing with its new Willow quantum chip.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 0.08%, France’s CAC 40 (FR40) closed down 1.14%, Spain’s IBEX 35 (ES35) dropped 0.38%, and the UK’s FTSE 100 (UK100) closed down 0.86%. Investor sentiment was dampened by disappointing trade data from China, which partially offset optimism from China’s announcement of fiscal and monetary policy easing for next year. Traders also refrained from making big bets ahead of tomorrow’s release of the US Consumer Price Index and Thursday’s ECB monetary policy decision.

German annual inflation rose to 2.2% in November 2024 from 2% in October, which is in line with preliminary estimates and the highest in four months. Core inflation, which excludes volatile food and energy prices, hit a six-month high of 3% in November. Norway’s annualized consumer inflation rate fell to 2.4% in November 2024 from 2.6% in the previous month. Meanwhile, the tax-adjusted Consumer Price Index excluding energy (CPI-ATE) rose to 3% year-over-year in November after rising 2.7% in October.

Silver prices (XAG/USD) traded near $32 an ounce on Tuesday, remaining near one-month highs as Chinese policymakers unveiled plans for additional economic stimulus, boosting demand prospects in the world’s top metals consumer. Like other precious metals, Silver also benefited from rising expectations that the US Federal Reserve will cut interest rates again this month.

WTI crude oil prices rose to around $69 a barrel on Wednesday, rising for the third consecutive session amid an improved demand outlook. This came after China announced plans to implement a sufficiently loose monetary policy next year to revitalize its economy, which could boost energy demand from the world’s largest oil importer. In support of that projection, China’s crude oil imports rose in November for the first time in seven months, rising more than 14% year-on-year.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.53%, China’s FTSE China A50 (CHA50) gained 1.04%, Hong Kong’s Hang Seng (HK50) fell by 0.50%, and Australia’s ASX 200 (AU200) was negative 0.36%. In Asia, market attention turned to China’s annual Central Economic Work Conference, which began today. This closed-door meeting, which usually lasts two to three days, is an opportunity for China’s top leaders to assess the state of the economy and set priorities for the coming year.

The Reserve Bank of New Zealand (RBNZ) has already cut the official money rate by 125 bps this year to 4.25%. Markets are now pricing in a 59% chance of another 50bp rate cut at the Central Bank’s next meeting in February, further weighing on the local currency.

S&P 500 (US500) 6,034.91 −17.94 (−0.30%)

Dow Jones (US30) 44,247.83 −154.10 (−0.35%)

DAX (DE40) 20,329.16 −16.80 (−0.08%)

FTSE 100 (UK100) 8,280.36 −71.72 (−0.86%)

USD Index 106.41 +0.26 (+0.24%)

News feed for: 2024.12.11

  • US Consumer Price Index (m/m) at 15:30 (GMT+2);
  • Canada BoC Interest Rate Decision at 16:45 (GMT+2);
  • Canada BoC Monetary Policy Statement at 16:45 (GMT+2);
  • Canada BoC Press Conference at 17:30 (GMT+2);
  • US Crude Oil Reserves (w/w) at 17:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

The RBA kept the rate at 4.35%. China plans to actively stimulate the economy in 2025

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) was down 0.54%. The S&P 500 Index (US500) fell by 0.61%. The Nasdaq Technology Index (US100) lost 0.84%. Stocks in the US started the week lower as Nvidia shares fell amid an antitrust investigation in China, and investors were cautious ahead of a crucial inflation report. The Consumer Price Index is expected to rise slightly to 2.7% y/y in November from 2.6% y/y in October. Meanwhile, the Consumer Price Index, excluding food and energy, is expected to be unchanged from October at 3.3% y/y in November.

Advanced Micro Devices (AMD) shares closed down more than 5% after Bank of America Global Research downgraded the stock to “Neutral” from “Buy,” citing downside risks to the company’s 2025 expectations. Nvidia (NVDA) fell more than 2% after China Central Television reported that China’s State Administration of Market Regulation has begun inspecting the company over suspected antitrust violations.

In Mexico, November inflation fell short of expectations, with core inflation falling to 4.55% year-on-year, the lowest in eight months, and core inflation falling to 3.58%, the lowest since April 2020. With economists expecting a sharper decline, the report came out positive for the Mexican peso (MXN) as it maintains flexibility in the Bank of Mexico’s rate-cut cycle.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) fell by 0.19%, France’s CAC 40 (FR40) closed higher by 0.72%, Spain’s IBEX 35 (ES35) lost 0.50%, and the UK’s FTSE 100 (UK100) closed up 0.52%. The DAX Index (DE40) retreated from a record high on Monday as traders await Thursday’s decision by the ECB, which is expected to announce a fourth rate cut of 25 basis points. Swaps discount the odds of a 25 bps ECB rate cut at the Dec. 12 meeting by 100% and a 50 bps rate cut at the same meeting by 7%.

WTI crude oil prices rose above $68 a barrel amid optimism over China’s move to looser monetary policy and geopolitical uncertainty in the Middle East. China, the world’s largest oil importer, signaled a “moderately loose” monetary policy for 2025, marking the first major turn toward faster economic growth in over a decade. The move boosted risk sentiment and helped crude oil prices. Geopolitical tensions also provided support as reports of Syrian President Bashar al-Assad’s ouster raised fears of further instability in the Middle East.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 0.18%, China’s FTSE China A50 (CHA50) gained 1.31%, Hong Kong’s Hang Seng (HK50) rose by 2.76%, and Australia’s ASX 200 (AU200) gained 0.03%. On Monday, Asian stock markets received support from China’s monetary policy changes. China’s Politburo, the 24 most senior officials of the ruling Communist Party led by President Xi Jinping, announced today that it would pursue a “moderately loose” monetary policy strategy next year and promised to be “more active” on fiscal policy, signaling further easing is coming. Investors will now turn their attention to this week’s Central Economic Work Conference, where China is expected to outline its economic priorities and targets for 2025.

The ASX 200 Index (AU200) fell by 0.36% on Tuesday to close at 8,393 after the Reserve Bank of Australia (RBA) left the rate unchanged at 4.35% for the ninth consecutive meeting, as expected. However, the central bank said it had “some confidence” that inflation was returning to target. RBA chief Michele Bullock also emphasized that the change in the wording of the statement was intentional and reflected softening economic data. The RBA added that it will continue to base its decisions on the data and its evolving assessment of risks, including geopolitical uncertainty.

S&P 500 (US500) 6,052.85 −37.42 (−0.61%)

Dow Jones (US30) 44,401.93 −240.59 (−0.54%)

DAX (DE40) 20,345.96 −38.65 (−0.19%)

FTSE 100 (UK100) 8,352.08 +43.47 (+0.52%)

USD Index 106.15 +0.10 (+0.09%)

News feed for: 2024.12.10

  • Australia NAB Business Confidence (m/m) at 02:30 (GMT+2);
  • China Trade Balance (m/m) at 05:00 (GMT+2);
  • Australia RBA Interest Rate Decision at 05:30 (GMT+2);
  • Australia RBA Monetary Policy Statement at 05:30 (GMT+2);
  • Australia RBA Press Conference at 06:30 (GMT+2);
  • German Consumer Price Index (m/m) at 09:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

USDInd steady ahead of US CPI report

By ForexTime 

  • USDInd ↑ 0.3% WTD, trapped in range
  • Over past year US CPI triggered moves of ↑ 0.7% & ↓ 0.4%
  • ECB decision could spark more volatility
  • Technical levels = 105.50 & 106.80

FXTM’s USDInd is on standby mode ahead of the US inflation report on Wednesday 11th December.

Bulls have held their ground despite last Friday’s soft US jobs report boosting Fed cut bets.

DXY

Note: FXTM’s USDInd tracks the US Dollar Index.  This measures how the dollar performs against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

 

The US November job report revealed:

  • Nonfarm payrolls increased 227,000 last month from 12,000 in October.
  • The unemployment rate edged to 4.2% from 4.1%.
  • Average hourly wages unchanged at 4.0% YoY and 0.4% MoM.

This report reinforced bets around lower US rates with traders now pricing in an 86% probability of a 25-bps cut in December.

Still, FXTM’s USDInd is up roughly 0.3% week-to-date and trading around 106.30 as of writing.

Geopolitical risk in the Middle East and political uncertainty in Korea could be factors supporting the dollar.

In addition, the European Central Bank, Bank of Canada and Swiss National Bank are expected to cut interest rates this week.

Note: The Euro accounts for almost 60% of the USDInd weighting, 9% of the Cad and roughly 4% of the Franc.

A weaker euro, cad and franc could push the dollar index higher and vice versa.

 

Redirecting our attention back toward the inflation reading:

US November CPI report

The November US Consumer Price Index (CPI) report on Wednesday, December 11th may impact bets around how aggressively the Fed cuts rates in the new year.

  • CPI is projected to rise 0.3% month-on-month in November from 0.2% prior.
  • Rise 2.7% year-over-year from the 2.6% prior.
  • Core: to remain unchanged at 0.3% month-on-month.
  • Core: unchanged at 3.3% year-on-year.

Over the past year, the US CPI report has triggered upside moves of as much as 0.7% or declines of 0.4% in a 6-hour window post-release.

  • The USDInd could slip on signs of cooling price pressures.
  • A hotter-than-expected CPI report could push the USDInd higher.

 

Keep an eye on the technicals

Prices remain in a range on the daily charts with support at 105.50 and resistance at 106.80.

  • A sold breakout above 106.40 may signal a move toward 106.80 and 107.60.
  • Should prices slip below 105.80, bears may be encouraged to target 105.50 and the 50-day SMA at 104.80.

USDInd9


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

The NFP report increased the likelihood of a Fed rate cut next week. China still fails to stoke inflation with stimulus

By JustMarkets

At the end of Friday, the Dow Jones (US30) was down 0.28% (for the week -0.63%). The S&P 500 Index (US500) was up 0.25% (for the week +0.83%). The Nasdaq Technology Index (US100) added 0.92% (up +3.10% for the week). The S&P 500 and Nasdaq indices set new record highs on Friday, helped by a stronger-than-expected November employment report reinforcing optimism for a Federal Reserve rate cut this month. Nonfarm Payroll Employment rose by 227,000, exceeding the estimate of 214,000, recovering from the bad weather and strikes seen in October. Following the report, traders raised the probability of a December rate cut to 90% from 70%. The rally was led by major technology stocks, with Amazon (+2.9%), Tesla (+5.3%), and Meta (+2.5%) all rising, reflecting confidence in the labor market and potential Fed policy changes.

The Canadian dollar weakened to 1.41 per dollar in December, the lowest level since April 2020, as investors embraced softer-than-expected labor market data. Canada’s unemployment rate rose to 6.8% in November from 6.5%, beating projections of 6.6% and marking the highest level since September 2021. This is in line with the Bank of Canada’s concerns about a weakening labor market and increased expectations of a 50 bps rate cut this week. In addition, tariff threats by US President-elect Donald Trump, including tariff hikes of 25% for Canada and Mexico and 10% for China, dampened sentiment given Canada’s reliance on US energy and auto demand.

Equity markets in Europe traded flat on Friday. Germany’s DAX (DE40) rose by 0.13% (for the week +4.08%), France’s CAC 40 (FR40) closed 1.31% higher (for the week +3.91%), Spain’s IBEX 35 (ES35) fell by 0.39% (for the week +4.27%), and the UK’s FTSE 100 (UK100) closed down 0.49% (for the week +0.26%). Economists seem to have missed the political situation in France, where President Macron has promised to appoint a new Prime Minister in the coming days and form a new “government of common interests.” In Germany, despite economic woes and political problems at home, the benchmark DAX Index (DE40) has shown surprising resilience, achieving roughly a 20% gain over the past year. This strength is due to globally oriented companies benefiting from international revenue streams and a weakening euro, which improves export competitiveness.

The Eurozone economy grew by 0.4% in Q3, the strongest pace in two years, following 0.2% growth in Q2 and in line with previous estimates. Among the largest economies, Germany’s GDP grew by 0.1%, down from 0.2% in the preliminary estimate but avoided recession. In addition, France’s GDP grew by 0.4%, and the Spanish economy remained resilient (+0.8%). On the other hand, the Italian economy stalled, and the Dutch economy slowed down (+0.8%).

According to banks and industry consultants, OPEC+’s decision to postpone the resumption of supply until April will reduce global oil production next year, which will tighten the balance somewhat, but a glut is still expected. Nevertheless, rising supply, especially from non-OPEC+ countries in the Americas, and weak demand from China remain major concerns. Morgan Stanley raised its estimates for Brent crude oil prices for the third and fourth quarters of 2025 to $70 a barrel from $68 and $66, respectively. ING Groep NV raised its prognosis for Brent to $71 a barrel from $69.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 2.29%, China’s FTSE China A50 (CHA50) gained 1.13%, Hong Kong’s Hang Seng (HK50) added 2.18%, and Australia’s ASX 200 (AU200) was negative 0.18%.

China’s annual inflation rate unexpectedly fell to 0.2% in November 2024 from 0.3% in the previous month, missing market estimates of 0.5% and the lowest since June. The slowdown showed the country’s growing deflation risks despite recent government stimulus measures and the Central Bank’s supportive stance on monetary policy. Inflation remains subdued, which will require continued stimulus.

S&P 500 (US500) 6,090.27 +15.16 (+0.25%)

Dow Jones (US30) 6,090.27 −123.19 (−0.28%)

DAX (DE40) 20,384.61 +25.81 (+0.13%)

FTSE 100 (UK100) 8,308.61 −40.77 (−0.49%)

USD Index 105.97 +0.26 (+0.24%)

News feed for: 2024.12.09

  • Japan GDP (q/q) at 01:50 (GMT+2);
  • China Consumer Price Index (m/m) at 03:30 (GMT+2);
  • China Producer Price Index (m/m) at 03:30 (GMT+2);
  • Mexican Inflation Rate (m/m) at 14:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

OPEC+ countries postponed production cuts until spring. The Reserve Bank of India (RBI) unexpectedly lowered the cash reserve ratio

By JustMarkets 

The Dow Jones Industrial Average (US30) was down 0.55% at Thursday’s close, the S&P500 Index (US500) decreased by 0.19%, and the Nasdaq Technology Index (US100) fell by 0.31%. Liquidation of long positions and profit-taking before Friday’s release of the monthly payroll report negatively impacted stocks. In addition, hawkish comments from San Francisco Fed President Daly on Wednesday evening weighed on stocks when she stated that the Fed has “no sense of urgency” to cut interest rates.

Economic news out of the US on Thursday was mixed for stocks. Weekly initial jobless claims rose by 9,000 to a 6-week high of 224,000, indicating a weaker labor market than expected at 215,000. The US trade deficit for October narrowed to $73.8 billion from $83.8 billion in September, better than expectations of $75.0 billion and a positive for Q4 GDP.

Equity markets in Europe rallied on Wednesday. Germany’s DAX (DE40) rose by 0.63%, France’s CAC 40 (FR40) closed higher by 0.37%, Spain’s IBEX 35 (ES35) added 1.57%, and the UK’s FTSE 100 (UK100) closed 0.16% yesterday. Eurozone retail sales for October fell by 0.5% m/m, weaker than expectations of 0.3% m/m and the biggest decline in 4 months. S&P’s German Construction PMI for November fell 2.2 to 38.0, the steepest decline in 7 months. German factory orders for October fell by 1.5% m/m, which was a smaller decline than expectations of 2.0% m/m. In France, markets remained stable despite political turmoil.

The World Gold Council reported that China, a major gold consumer, saw a decline in physical demand in 2024 while investment remained strong. The council also forecast that both sectors could stabilize, with demand for gold jewelry likely to increase and gold investment likely to slow in 2025.

WTI crude oil prices extended their recent decline to around $68 a barrel on Friday as OPEC+’s decision to postpone restoring halted production failed to lift market sentiment amid expectations of oversupply next year. On Thursday, the producer group postponed a supply increase for another three months, gradually increasing in April and gradually cutting output over 18 months at a slower pace than originally planned. Experts believe that oil will show moderate growth over the next week after a sharp drop in the previous week.

Asian markets traded without any dynamics. Japanese Nikkei 225 (JP225) rose by 0.30%, Chinese FTSE China A50 (CHA50) fell by 0.61%, Hong Kong Hang Seng (HK50) fell by 0.92%, and Australian ASX 200 (AU200) was positive 0.15% yesterday.

The offshore yuan held steady at 7.26 per dollar, supported by rising expectations of potential additional stimulus measures from the Chinese authorities during key policy meetings in mid-December, notably the Politburo meeting and the annual Central Economic Work Conference. Goldman Sachs and Morgan Stanley forecast a 40 bps cut in the Chinese central bank’s main discount rate in 2025, which would be the largest interest rate cut in a decade.

The Australian dollar fell as low as $0.643 on Friday, nearing four-month lows, as disappointing economic growth data fueled speculation that the Reserve Bank of Australia (RBA) may take a softer stance at next week’s monetary policy meeting.

The Reserve Bank of India (RBI) unexpectedly cut the cash reserve ratio (CRR) by 50 basis points to 4.0%, the first cut since April 2020. The RBI governor said the decision was in line with the central bank’s neutral policy, reflecting a balanced approach to liquidity management while ensuring economic stability. India’s GDP growth slowed to 5.4% year-on-year in September 2024 from 6.7% in the previous quarter, the weakest since December 2022. At the same time, annual inflation rose to 6.21% in October 2024, the highest in 14 months, and exceeded the central bank’s upper tolerance limit of 6% for the first time in a year.

Vietnam’s annual inflation rate fell to 2.77% in November 2024, down from 2.89% in the previous month. The decline was mainly due to softening inflation on food and catering services. Meanwhile, the annual core inflation rate, which excludes volatile goods, rose to a seven-month high of 2.77%, up from 2.68% in October.

S&P 500 (US500) 6,075.11 −11.38 (−0.19%)

Dow Jones (US30) 44,765.71 −248.33 (−0.55%)

DAX (DE40) 20,358.80 +126.66 (+0.63%)

FTSE 100 (UK100) 8,349.38 +13.57 (+0.16%)

USD index 105.83 +0.12 (+0.11%)

News feed for: 2024.12.06

  • German Industrial Production (m/m) at 09:00 (GMT+2);
  • Eurozone GDP (q/q) at 12:00 (GMT+2);
  • Canada Unemployment Rate (m/m) at 15:30 (GMT+2);
  • US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
  • US Unemployment Rate (m/m) at 15:30 (GMT+2);
  • US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Week Ahead: Central banks galore

By ForexTime

  • ECB, BoC, SNB expected to CUT interest rates
  • RBA seen leaving rates unchanged
  • EU50: Over past year ECB triggered moves of ↑ 1.1% & ↓ 0.6%
  • USDCAD near 4 year high, ↑ 6% YTD
  • AU200 & USDCHF on breakout watch

Central bank decisions could spark fresh trading opportunities in the week ahead.

The European Central Bank (ECB), Bank of Canada (BoC), Reserve Bank of Australia (RBA) and Swiss National Bank (SNB) will be under the spotlight.

These high-impact events will be complemented with inflation data from the United States and Europe’s largest economy among others:

Monday, 9th December 

  • CN50: China PPI, CPI
  • JP225: Japan GDP, current account
  • TWN: Taiwan trade

Tuesday, 10th December

  • AU200: RBA rate decision
  • CN50: China trade
  • GER40: Germany CPI
  • ZAR: South Africa manufacturing production

Wednesday, 11th December

  • CN50: Central Economic Work Conference
  • CAD: Canada rate decision
  • JP225: Japan PPI
  • ZAR: South Africa CPI, retail sales
  • USDInd: US CPI

Thursday, 12th December

  • AU200: Australia unemployment
  • EU50: ECB rate decision
  • CHF: SNB rate decision
  • US500: US initial jobless claims, PPI

Friday, 13th December

  • FRA40: France CPI
  • EUR: Eurozone industrial production
  • JP225: Japan industrial production, Tankan index
  • NZD: Manufacturing PMI
  • UK100: UK industrial production

Here are 4 assets that could be impacted by key 4 bank announcements:

 

    1) RBA meeting: AU200

FXTM’s AU200 could be influenced by the Reserve Bank of Australia rate decision.

Note: This index tracks the underlying ASX 200 Index

Markets widely expect the central bank to leave rates unchanged at its meeting on 10th December.

Cooling inflation may keep RBA doves at bay, but weak economic growth could support the argument for rate cuts in 2025.   

Traders are pricing in a 58% probability of a 25 bp RBA cut by February 2025 with a move fully priced in by April 2025.

Note: Over the past 12 months, the RBA decision has triggered upside moves of as much as 0.8%, or as much as 0.1% declines in a 6-hour window post-release.

Looking at the charts, key levels of interest can be found at 8533.6, 21-day and 50-day SMA.

au200

 

    2) BoC meeting: USDCAD

The Bank of Canada is expected to cut interest rates by 25 or 50 bps at its meeting on 11th December.

This is based on weak economic growth and rising inflation which hit 2% in October.

Traders are currently pricing in an 85% probability of a 50-basis point BoC cut in December.

Note: Over the past 12 months, the BoC decision has triggered upside moves of as much as 0.3%, or as much as 0.2% in declines in a 6-hour window post-release.

Looking at the charts, the USDCAD remains bullish and is trading near 4-year highs. Should the BOC move ahead with a jumbo-sized rate cut, this could push the USDCAD to fresh 4-year highs beyond 1.4178.

usdcad

*This was published before the US jobs report on Friday 6th December.

 

    3) ECB meeting: EU50

The ECB will likely cut interest rates by 25 bps at its next meeting on December 12th.

With political risk and Trump’s tariff threats threatening the growth outlook, Lagarde is expected to strike a dovish note – signaling further rate cuts in 2025.

Traders have fully priced in a 25 bps move by December with another rate cut expected by January 2025.

Bets around lower EU rates could support FXTM’s EU50 which tracks the Euro Stoxx 50 index. As of writing, the index has gained almost 10% YTD.

Prices are pushing higher on the daily charts with the next key level of interest at 5000.

Note: Over the past 12 months, the ECB decision has triggered upside moves of as much as 1.1%, or as much as 0.6% in declines in a 6-hour window post-release.

eu50

 

    4) SNB meeting: USDCHF

The Swiss National Bank is expected to cut interest rates at its meeting on 12th December. But markets are divided on whether it will be a 25 or 50 bp cut.

With the economy under pressure and exposed to political risk, more rate cuts could be on the cards.

Traders are pricing in a 45% probability of a 50-bps cut by December.

Note: Over the past 12 months, the SNB decision has triggered upside moves of as much as 1.1%, or as much as 0.4% in declines in a 6-hour window post-release.

Looking at the charts, the USDCHF is under pressure on the daily charts with resistance below the 200-day SMA. Key levels of interest can be found at 0.8900, 0.8850 and 0.8715.

usdhcf

*This was published before the US jobs report on Friday 6th December.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Bitcoin has surpassed the $100,000 mark for the first time. Today, the focus of oil traders is on the OPEC+ meeting

By JustMarkets

At the end of Wednesday, the Dow Jones Index (US30) rose by 0.69%. The S&P 500 Index (US500) was up 0.61%. The Nasdaq Technology Index (US100) was up 1.24%. All three major US stock indices closed at record highs. Market sentiment was buoyed by strong momentum in the technology sector and encouraging earnings reports from major companies. In addition, traders closely followed the statements of Fed Chairman Powell. At the DealBook summit, Powell reiterated that the Central Bank is in no hurry to cut interest rates, emphasizing that the US economy remains resilient but continues to face inflationary pressures.

Bitcoin prices soared above the key $100,000 mark on Thursday, hitting new all-time highs, as Donald Trump’s imminent return to the White House sparked optimism for a more favorable regulatory environment for the digital assets industry. Trump’s selection of Paul Atkins to replace outgoing SEC Chairman Gary Gensler, who has introduced tougher rules to regulate digital assets, has further fueled that optimism. Atkins, a strong advocate of digital assets, has broad support from market participants.

Equity markets in Europe rallied on Wednesday. Germany’s DAX (DE40) rose by 1.08%, France’s CAC 40 (FR40) closed up 0.66%, Spain’s IBEX 35 (ES35) rose by 0.49%, and the UK’s FTSE 100 (UK100) closed down 0.28%. The French government will resign for the first time since 1962. The French Parliament backed a vote of no confidence in Michel Barnier’s government. He will leave office after serving the shortest term as prime minister in modern French history. Amid the political chaos, more lawmakers are demanding the resignation of Macron, whose term lasts until 2027.

OPEC+ representatives will meet today. The alliance is expected to extend the current production cuts until the first quarter of 2025, but analysts emphasize that the tone and details of Thursday’s meeting could significantly affect prices. Despite the drop, the market received some support from a larger-than-expected decline in US crude oil inventories, as reported by the Energy Information Administration. Geopolitical tensions also impacted market dynamics, including a fragile ceasefire between Israel and Hezbollah, political unrest in South Korea after a brief declaration of martial law, and an escalating conflict in Syria that could involve oil-producing countries.

Asian markets were flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.07%, China’s FTSE China A50 (CHA50) gained 0.52%, Hong Kong’s Hang Seng (HK50) fell 0.02% and Australia’s ASX 200 (AU200) was negative 0.38%.

PMI reports for November showed a second consecutive month of growth in China’s manufacturing sector, although growth in the services sector slowed. Meanwhile, Beijing recently banned exports of critical military minerals to the US, a retaliation to Washington’s recent actions against China’s microchip industry.

The Australian dollar stabilized near $0.643 on Thursday after data showed that Australia posted its largest trade surplus in eight months in October, driven by higher exports. However, the Australian dollar remained near four-month lows after falling nearly 1 percent on Wednesday. Weak GDP data fueled expectations of an interest rate cut by the Reserve Bank of Australia soon.

The kiwi remains under pressure in New Zealand due to the Reserve Bank of New Zealand’s dovish stance. The RBNZ cut its benchmark interest rate by 125bps this year to 4.25% and said it would further ease monetary policy early next year, possibly by another 50bps if economic conditions evolve as estimated.

Thailand’s annual inflation rate accelerated to 0.95% in November 2024 from 0.83% in October, the highest since May. However, the result fell short of market expectations of 1.12% and remained outside the Central Bank’s target range of 1% to 3% for the sixth month. The annualized core inflation rate, which excludes volatile items such as food and energy prices, rose to 0.80%, the highest since July 2023 and above estimates of 0.77%.

S&P 500 (US500) 6,086.49 +36.61 (+0.61%)

Dow Jones (US30) 45,014.04 +308.51 (+0.69%)

DAX (DE40) 20,232.14 +215.39 (+1.08%)

FTSE 100 (UK100) 8,335.81 −23.60 (−0.28%)

USD Index 106.29 −0.03 (−0.03%)

News feed for: 2024.12.05

  • Australia Trade Balance (m/m) at 02:30 (GMT+2);
  • Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
  • UK Construction PMI (m/m) at 11:30 (GMT+2);
  • Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
  • OPEC+ meeting at 13:00 (GMT+2);
  • US Trade Balance (m/m) at 15:30 (GMT+2);
  • US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • Canada Trade Balance (m/m) at 15:30 (GMT+2);
  • Canada Ivey PMI (m/m) at 17:00 (GMT+2);
  • US Natural Gas Storage (w/w) at 17:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Market round-up: Bitcoin hits $100k, OPEC+ delay output hike

By ForexTime

  • Bitcoin smashes through $100k
  • “OG” crypto boasts $2 trillion market cap, ↑ 140% YTD
  • OPEC+ delay oil production hikes until April
  • Brent trapped in range – support at $70, resistance at $76

Bitcoin surpasses the $100,000 milestone while oil turns choppy following the OPEC+ decision.

Here is what you need to know:

 

    1) Bitcoin’s $100k dream becomes reality

Bitcoin’s $100k dream became a reality on Thursday morning…

Prices jumped over 6%, smashing through this key milestone as investors cheered Trump’s pick to lead the Securities and Exchange Commission.

Crypto advocate Paul Atkins is set to replace Chair Gary Gensler, boosting hopes for more relaxed regulations in the crypto space.

Sentiment towards the crypto space has also been boosted by recent comments from Fed Chair who compared Bitcoin to gold but “only its virtual, it’s digital”.

Hitting $100,000 is certainly a major milestone and something that could support gains for the remainder of 2024.

The next key event that could rock Bitcoin may be Friday’s NFP report which is likely to influence Fed cut bets.

Traders are currently pricing in a 74% probability of a 25-basis point Fed cut in December. Any changes to these bets may influence cryptocurrencies which have shown sensitivity to US interest rates.

Looking at the charts, Bitcoin is firmly bullish – boasting a year-to-date gain of over 140%.

  • A strong weekly close above $100,000 may signal further upside.
  • However, should prices slip below this key level – bears may target $95,000.

bitc

 

    2) OPEC+ kicks can down the road…

Oil prices initially slipped on Thursday after OPEC+ decided to delay oil production hikes by three months. However, losses were clawed back as investors perused the details of the new output plan.

The cartel has decided to unwind output cuts at a slower pace over an 18-month period starting from April 2025.

Nevertheless, OPEC+ is in a tricky position with production hikes down the road leading to potentially lower prices.

Even if they opt to delay production beyond April, this could spark internal disputes while raising the risk of a price war.

In addition, Trump’s return to the White House adds another element of uncertainty for the cartel ranging from tighter sanctions on OPEC members to tariffs impacting China’s demand.

The next OPEC+ meeting is scheduled for May 28, 2025 according to a statement from OPEC.

Looking at the technical picture, Brent remains in a range on the weekly charts with support at $70.00 and resistance at $76.00. A breakout could be on the horizon.

brent


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com