Australian Dollar Extends Gains on Chinese Data

The Australian dollar has extended its gains on Friday. In the European session, AUD/USD is trading at 0.6713, up 0.23%. It has been an excellent week for the Aussie, which has gained 2.07% on the back of the dovish Fed announcement and strong employment data at home.

Euro Dips on Soft Services PMI

Eurozone Services PMI eased in December, indicating that the economy continues to struggle. The PMI fell from 48.7 to 48.1 and missed the consensus estimate of 49.0. This marked a fifth straight month of contraction in the services sector, with 50 separating contraction from expansion. Germany, the largest economy in the eurozone, also reported a decline, with the PMI falling to 48.4, down from 49.6 in November and short of the consensus estimate of 49.8.

British Pound Steady after Mmixed PMIs

British PMIs were a mixed bag in December. The Manufacturing PMI eased to 46.4, down from 47.2 and shy of market expectations of 47.5. Manufacturers are pessimistic as the UK economy is struggling and demand for UK exports has weakened.

Sunset Market Commentary

Today’s PMIs marked the end of a busy week. They would either confirm or challenge yesterday’s ECB en BoE case for signaling steady rates for the foreseeable future. It turned out to be the latter for Frankfurt, triggering Bund outperformance vs US Treasuries.

Week Ahead – BoJ Meets for the Last Time in 2023, US Core PCE and UK CPIs Also On Tap

Yen traders await BoJ decision for pivot clues US core PCE index the highlight of the US agenda UK CPI numbers to be the pound’s next test Loonie and aussie await Canada’s CPIs and RBA minutes Will BoJ policymakers hint at the end of negative rates? Following a barrage of central bank decisions this week […]

Bank of Japan Meeting: Another Baby Step to Exiting Negative Rates?

The Bank of Japan is the only major central bank that has not yet raised interest rates, as despite inflation running above its 2% target for the past one-and-a-half years, Japan has yet to be declared free of deflation.

The Weekly Bottom Line: Cuts! The Herald Angels Sing

Central banks have given investors an early Christmas present. With economic momentum fading and inflation decelerating more decisively, central banks' tone has shifted dramatically. The higher for longer narrative is being dampened, with expectations for policy rate cuts coming into greater focus (Chart 1). This has set off a Santa Claus rally in both equity and bond markets.

Weekly Economic & Financial Commentary: A Win for the Doves

As widely expected, the FOMC left the fed funds target range unchanged at 5.25%-5.50% in a unanimous vote. The decision marked the third consecutive meeting that the Committee held policy steady. While the rate decision came as no surprise, this week's meeting shaped up to be one of the clearest messages yet that the torrid hiking cycle that began in March 2022 has come to an end.

Commodities Year Ahead 2024: Fed Policy to Drive Gold, Oil to Dance to Rhythm of OPEC+

After a dull 2022, gold staged a decent comeback in 2023, entering uncharted territories twice and appearing to be headed for a more than 10% yearly gain. The only period where the precious metal trended lower was between May and early October, but after hitting a six-month low of $1,810 on October 6, the bulls took charge and drove the metal to a new record of around $2,145 in early December, although it corrected lower thereafter.

Forex and Cryptocurrencies Forecast

The fate of EUR/USD was determined by two events last week: the FOMC (Federal Open Market Committee) meeting of the US Federal Reserve and the meeting of the Governing Council of the European Central Bank (ECB), which took place a day later. As a result, the euro emerged victorious: for the first time since November 29, the pair rose above 1.1000.