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
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EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.