Market movers ahead
We expect the FOMC will replace ‘considerable time’ with ‘patient’ in their statement next week, but put a 20% probability on them waiting
In the euro area we look for higher figures for PMI, IFO and ZEW expectations in
December.The Chinese flash HSBC/Markit manufacturing PMI is likely to be unchanged in
December, but move higher in Q1.In Japan, Prime Minister Shinzo Abe and his coalition government will continue to be in a strong position after the election. The Bank of Japan is unlikely to ease again soon.
The Riksbank is under pressure to do something, and the first line of defence is likely to be signalling a ‘delayed hikes/lowered end point’ repo forecast.
Global macro and market themes
Markets correct, but it is likely to be temporary.
The short-term outlook for oil is weak. Lower oil prices give stronger baseline growth but higher tail risk.
Euro area is bottoming, US looks strong
Norges Bank delivered a surprise rate cut and its new interest rate path suggests a 50- 50 probability of a rate cut again before June.
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Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.