Eurozone Disinflation Accelerates as Markets Price in April Rate Cut

Eurozone inflation fell much further than expected in October, leaving the headline HICP rate within touching distance of the ECB's 2% target.

Disinflation Continues in Euro Area

The Euro area HICP inflation declined more as expected as also hinted by early country releases. The monthly decline of euro area HICP by 0.5 % m/m versus consensus of -0.2% m/m translated into a yearly growth rate of just 2.4% y/y, even below the market pricing of 2.5%.

US Manufacturing ISM Taking Center Stage

In the US, the Manufacturing ISM is taking center stage. A slight improvement from 46.7 to 47.8 is expected. Of late, markets were mostly driven by (perceived) soft/negative data release. After yesterday’s surprise jump in the Chicago PMI, maybe we now should look at the market reaction function in case of an unexpected strong figure.

Swiss Franc Hits 4-month High, GDP Beats Forecast

The Swiss franc continues to power higher against a slumping US dollar. USD/CHF has fallen 1% this week and plunged 3.8% in November. On Thursday, USD/CHF touched a low of 0.8684, its lowest level since July 31.

USD/CAD Eyes Canadian Job Data, US PMI

The Canadian currency is poised to post a third straight winning week against the greenback and soared 2.25% in November. It is a busy Friday, with Canada releasing the employment report, the US publishing the ISM Manufacturing PMI and Fed Chair Powell speaking at an event in Atlanta.

USD Slips Below 200-DMA Despite Rebound in Yields

Last week ended on a positive note where the US equities advanced to fresh highs since summer on a holiday shortened trading week. The S&P500 gained for the 4th consecutive week and closed the week near 4560, the rate-sensitive and technology heavy Nasdaq 100 extended gains beyond the summer peak, and hit an almost 2-year […]

Dollar Stays in the Sefensive

The dollar stays in the defensive (DXY 103.30; USD/JPY 148.95). There are only second tier eco data today. ECB’s Lagarde speaks in the EU Parliament. The US Treasury sells $54 bln 2-y Notes and $55 bln 5-y notes.

Australian Dollar Moving Within an Uptrend

AUDUSD was rising during the Asian and early European session. Today's trading session is expected to be relatively quiet, as there are no major economic reports. However, Wednesday's Australian monthly inflation report will be important to watch. In addition, tomorrow's speech by the RBA governor Michele Bullock at 1:20 a.m. UTC may give clues on the future interest rate path.

Cryptocurrency Traders Pause after Growth

For example, the Bitcoin exchange rate was pulling back to $37.0K, having remained within an uptrend for over a month now, with the lower boundary now at $36.6K and the upper boundary at $38.3K. Only a decline below the lower boundary will question the sustainability of the uptrend. Until then, the prevalence of buying on declines in the major cryptocurrencies is very likely.

Has Inflation Fire Been Extinguished by ECB?

Ahead of this busy period, ECB members have been flooding the airwaves with their comments. They have been trying hard to convince the market that (1) rate hikes are not completely off the table, (2) rates will probably stay at the current levels for a while and it is too early to talk about rate cuts, (3) the current weak growth patch is expected to continue in 2024 but they do not expect a recession and (4) inflation is expected to edge a bit higher over the coming months.