Global markets are navigating a complex landscape marked by ECB caution on rate cuts, BOJ hints at potential policy shifts, and resilient US economic data.
The Euro gained modestly against the dollar, supported by ECB official Isabel Schnabel’s remarks against excessive easing, while the yen steadied amid speculation of a December rate hike. Precious metals saw mixed movements as geopolitical risks and US labor market strength influenced investor sentiment. Meanwhile, silver rebounded, and the pound approached $1.26 despite ongoing pressure from weak UK economic data and heightened global trade tensions.
Time | Cur. | Event | Forecast | Previous |
13:00 | EUR | German CPI (YoY) (Nov) | 2.30% | 2.00% |
13:00 | EUR | German CPI (MoM) (Nov) | -0.20% | 0.40% |
13:00 | EUR | ECB's Elderson Speaks | | |
17:00 | EUR | ECB's Lane Speaks | | |
23:30 | JPY | Tokyo Core CPI (YoY) (Nov) | 2.00% | 1.80% |
The euro climbed past $1.051, moving further away from a two-year low of $1.046 on Nov 21, after ECB official Isabel Schnabel cautioned against excessive rate cuts. She warned that borrowing costs are nearing neutral levels, and over-easing could waste policy options, prompting markets to lower expectations for ECB rate reductions through 2025. The debate over the ECB’s approach intensifies as inflation nears the 2% target amid Eurozone economic challenges. Global uncertainty grows with President-elect Donald Trump’s protectionist trade agenda, including proposed tariffs of 10% on Chinese goods and 25% on imports from Mexico and Canada. In France, bond risks surged to levels last seen during the Eurozone debt crisis, fueled by fears that PM Michel Barnier may fail to pass next year’s budget, adding to investor concerns about political instability in the region.
R1: 1.0530 | S1: 1.0450 |
R2: 1.0600 | S2: 1.0400 |
R3: 1.0660 | S3: 1.0330 |
The Japanese yen eased to around 151.5 per dollar on Thursday in a likely technical correction after surging to its highest level in over five weeks the previous session. The recent rally was fueled by speculation that the Bank of Japan may raise interest rates again as early as next month. BOJ Governor Kazuo Ueda recently indicated the possibility of a rate hike in December, citing concerns over the yen’s weakness. Markets are now pricing in a roughly 60% chance of a 25 basis point rate hike in Japan next month, up from around 50% just a week ago. Now, the focus is on Tokyo's inflation data, due on Friday, which could provide additional insights into the future direction of BOJ policy. Externally, the yen gained support from a broad decline in the US dollar, as US PCE inflation data matched expectations, signaling little change in the Federal Reserve's approach to rate cuts.
Technically, the first resistance level will be 152.00, and if broken, the next levels to watch will be 153.00 and 153.60. On the downside, 150.90 is the first support level, and if it breaks, the levels to watch will be 150.20 and 148.70.
R1: 152.80 | S1: 152.00 |
R2: 153.90 | S2: 150.90 |
R3: 154.60 | S3: 150.20 |
Gold fell below $2,630 per ounce on Thursday, trimming recent gains as investors continued to assess the latest batch of US economic data. Both PCE and core PCE prices showed that inflation progress had stalled, reinforcing the Federal Reserve's cautious stance on further rate cuts. Additional data suggested that the economy remains strong, following the release of the second estimate for third-quarter GDP. The employment data indicated continued resilience in the labor market, with the number of Americans filing for unemployment benefits falling below expectations. This data further limited the Fed's room to lower rates next year. On the geopolitical front, traders continued to monitor developments in the Middle East. While the recent ceasefire deal between Israel and Hezbollah eased some of the metal’s safety appeal, uncertainty persists following strong comments from Israeli Prime Minister Netanyahu.
Technically, the first resistance level will be 2660, and if broken, the next levels to watch will be 2675 and 2710. On the downside, 2630 is the first support level, and if it breaks, the levels to watch will be 2600 and 2575.
R1: 2650 | S1: 2630 |
R2: 2675 | S2: 2600 |
R3: 2710 | S3: 2575 |
The British pound gained some ground to approach $1.26, after tumbling to six-month lows early in the month, although investors remain cautious and assess the potential impact of a second Donald Trump administration. Trump doubled down on his threats to raise tariffs, mentioning a 10% tariff increase on China and a 25% hike on Mexico and Canada. Meanwhile, disappointing economic data for the UK increased bets for the Bank of England rate cuts. Retail sales fell by a surprizing 0.7% in October and flash PMIs also came below forecasts, pointing to a fractional decline in business activity during November. On the price front, the annual inflation rate went up to 2.3% in October, the highest in six months, compared to 1.7% in September, exceeding both the BoE's target and market expectations of 2.2%. Most analysts expect the BoE to leave borrowing costs steady in December.
Technically, the first resistance level will be 1.2680, and if broken, the next levels to watch will be 1.2720 and 1.2750. On the downside, 1.2615 is the first support level, and if it breaks, the levels to watch will be 1.2540 and 1.2500.
R1: 1.2620 | S1: 1.2530 |
R2: 1.2680 | S2: 1.2500 |
R3: 1.2720 | S3: 1.2475 |
Silver prices climbed above $30.50 per ounce on Wednesday, recovering some losses from earlier in the week as the dollar pulled back from recent highs. Investors were also awaiting key US economic data to assess the outlook for potential Federal Reserve interest rate cuts. Minutes from the Fed’s November meeting showed officials were optimistic about easing inflation and a resilient labor market, supporting the case for further rate cuts. However, they indicated a preference for gradual adjustments. Markets are currently pricing in a 63% chance that the Fed will reduce rates by another 25 basis points next month. Meanwhile, investors continued to assess the impact of Trump’s tariff threats on demand for safe-haven assets, as well as the sustainability of a ceasefire deal between Israel and Hezbollah.
Technically, the first resistance level will be 30.20, and if broken, the next levels to watch will be 31.00 and 31.40. On the downside, 29.80 is the first support level, and if it breaks, the levels to watch will be 29.10 and 28.80.
R1: 31.10 | S1: 30.20 |
R2: 31.55 | S2: 29.85 |
R3: 32.10 | S3: 29.30 |
The U.S. private sector added 146,000 jobs in November 2024, according to the latest ADP® National Employment Report™. Produced by ADP Research in collaboration with the Stanford Digital Economy Lab, the report also highlighted a 4.8% year-over-year increase in annual wages.
Detail Eurozone Economic Outlook Dims as Contraction Deepens (12.04.2024)The Eurozone economy slipped back into contraction in November, according to the latest HCOB PMI survey data.
Detail Political Uncertainty and Central Bank Actions Shape Market Moves (12.04.2024)Global markets grapple with heightened political and economic risks, as the euro struggles with Eurozone instability.
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