Global financial markets digested the verdict from the ECB meeting on Thursday

Danske Research Team Danske Bank A/S

Market movers today

Today, we have a very thin calendar with no major economic data releases.
In Scandinavia, focus turns to CPI data in Denmark. See more on the next page.

Selected market news

On Friday, global financial markets digested the verdict from the ECB meeting on Thursday. On the data front in the US, we got the preliminary consumer confidence index for December from the University of Michigan, which rose to 98.0 from 93.8. This is the highest level since January 2015 and the very high consumer confidence supports our view that private consumption will continue to be a main growth driver in the US.

In the US, this week’s main event is the FOMC meeting on Wednesday. Stronger growth in H2 supports our view that the Fed will raise the target range by 25 basis points to 0.50-0.75% (in line with consensus and market pricing). All eyes will be on indicators for next year’s hiking path.

Non OPEC oil producers this weekend agreed to cut output by 558kb/d with Russia delivering 300kb/d. This was about as expected. It is still uncertain what the reference point for Russia's cut will be and most of the remaining cut will come in the form of a natural decline. Hence, the market impact should be limited by the weak details. Saudi Arabia pledged to cut further than the 458kb/d agreed to on 30 November. Overnight, Brent oil has climbed further to around USD56.6/bbl at the time of writing.

In Italian politics, over the weekend, the president has given the current foreign minister Paolo Gentiloni the mandate to form a new government (set to be broadly unchanged), see FT.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.