Will ECB Set the Stage for an Early 2024 Rate Cut?

This week is shaping up to be a cracking one as the final ECB meeting for 2023 will be held on Thursday, a day after the respective Fed gathering. Armed with the latest projections and, following two days of intense discussions at the Frankfurt tower, the ECB is expected to keep its interest rates unchanged, but it could give strong hints about its 2024 strategy.

Fed Decision and US Inflation Data Coming Up

It’s been a great year for the American economy. Real growth is on track to hit 3% with some help from resilient consumer spending and an enormous government deficit. Meanwhile, inflation has been falling steadily, fueling speculation that the economy can achieve the elusive ‘soft landing’ that the Fed has been hoping for. 

GBP/USD – Pound Edges Higher ahead of UK Job Data

The British pound is showing little movement at the start of the week. In Monday’s European session, GBP/USD is trading at 1.2576, up 0.22%.

The Flash Sell-off in Crypto?

A wave of profit-taking hit the cryptocurrency market on Monday morning. It seems that the failure of cryptocurrencies to rise over the weekend caused players to pull stop orders very close to market prices, and we saw a massive exit from long positions in low liquidity before the regular session in Asia. Strong demand for risk assets in traditional markets suggests that the market will try to get back on its previous growth track.

Sunset Market Commentary

The Japanese yen last week grabbed a lot of market attention over speeches by the Bank of Japan’s number 1 (governor Ueda) and shared number 2 (deputy governor Himino). Both fanned speculation over an imminent (ie December 19) policy shift, lifting Japanese yields and with it the yen.

Swiss Franc Shines, Turns to SNB Decision for Fuel

The Swiss economy hit a road bump lately. Economic growth almost came to a standstill in the third quarter, printing just 0.3% from a year earlier as the manufacturing sector continued to struggle.

Recent Inflation Data Probably Will Allow Fed to Remove a Final Rate Hike

The recent inflation data probably will allow Fed governors in the dots to remove a final rate hike. Question now is how much room for rate cuts they see in 2024. A maximum of 50 bps expected rate cuts might help to trigger some consolidation on the recent decline in yields.

GBP/USD Drifting Ahead of US Inflation

Tuesday’s UK employment report was notable for the decline in wage growth. Earnings excluding bonuses rose 7.3% in the three months to October, down from 7.8% in the three months to September. This was lower than the consensus estimate of 7.4%.

Japanese Yen Rebounds, US Inflation Looms

The Japanese yen has ended a two-day slide, in which it dropped 1.4% against the US dollar. In Tuesday’s European session, USD/JPY is trading at 145.21, down 0.66%.

US CPI Data: Dollar Down As Rate Uncertainty Sustains Volatility

As the clock ticks towards 13:30 GMT, financial markets are bracing for the release of the Consumer Price Index (CPI) data for November, a pivotal metric that provides a snapshot of the current state of the United States economy.