RADEX MARKETS-ийн талаар дэлгэрэнгүй уншина уу
Focuses returned to the US economy yesterday. A couple of data points in particular raised eyebrows, namely higher than expected job openings and stronger services PMI figures. According to the Bureau of Labour Statistics, there were 8.1 million job openings in November, much higher than the expected figure of 7.7 million. The ISM and S&P Global services PMI figures both confirmed a sector firmly in expansion at 54.1 and 56.8 respectively. The two data points point to potential inflationary pressures further down the line, which in turn are tempering expectations for interest rate cuts on the Dollar. The Fed has practically said as much. Markets are now pricing in a 95% chance of no change for the next Fed decision on the 29th of January. In fact, markets are not looking at a rate cut until the summer. US indices took the news poorly. The Dow lost 0.4% yesterday, the S&P 500 shed 1.1% and the Nasdaq fell 1.9%. The Euro and Pound Sterling clawed back some dignity over the last few sessions, but remain close to multi-month local lows. The Japanese Yen is also currently challenging six-month lows, with USDJPY breaching 158 this morning. Japanese monetary authorities were prompted into a response yesterday, stating that the government will take appropriate action against excessive FX moves, as it was forced to do last year. The Bank of Japan’s reluctance to hike rates on the Yen, coupled with the Fed’s newfound hawkish stance, mean that the differential between the two currencies is not likely to close just yet.
New Year – new beginnings. Financial markets are back in full swing after a well-deserved break over the festive season. The Dollar wasted no time in setting the tone, surging higher on the first trading day of the year and wreaking havoc on the major currency pairs. The Pound Sterling and the Euro recovered somewhat the following day but remain perched above multi-month and multi-year lows respectively. Gold appears uncommitted to a particular direction so far and remains below its pre-election record high. Nevertheless, the precious metal gained $18 last week to close at $2,640 an ounce. The more interesting development in commodities however is a potential uptick in interest in crude oil. After months of languishing in the doldrums, oil prices gained some ground last week, pushing Brent Crude to $76 and WTI to $73 a barrel. The cold weather front in much of the northern hemisphere is playing its part to increase demand in the immediate term, but on longer time frames oil markets are also factoring in the promise of economic stimulus measures in China. In a bid to encourage growth, Beijing plans to increase funding via the bond market whereas the People’s Bank of China will slash reserve requirements and reduce lending rates. Last year, oil imports decreased in Asia for the first time since 2021, with China in particular importing around 2% less than the previous year according to figures up until November. Then there is the possibility of sanctions against Iran, which could further tighten global oil supplies and increase prices as a result. Just like the rest of the financial world, the economic calendar is also finally emerging from winter hibernation. Services PMIs from around the world scatter the schedule today, before European CPI and employment data on Tuesday. FOMC minutes for the December meeting are set to be released on Wednesday, coupled with remarks from Fed Governor Christopher Waller. Many other board members will also deliver comments the following day. NFPs are back on the menu on Friday after being carried over from last week. Happy New Year.
Back to work. Markets have reopened following New Year revelries and by the looks of things, traders were desperate to get back to business. If the first trading day of the year is anything to go by, then 2025 will be the year of the Dollar. The Greenback continued its relentless push higher on Thursday, in a show of strength that was particularly detrimental to the Euro and Pound Sterling. The common currency closed at $1.026 yesterday and now sits at two-year lows versus the Dollar. The last time this happened, the Euro went on to fall below parity, something it has only done twice in its history. The situation is looking equally grim for Cable, which nose-dived down to an eight-month low of $1.237. European manufacturing data made for bleak reading yesterday, with France and Germany now reporting in the low 40s and the Eurozone in general reporting just 45. The UK manufacturing sector showed some degree of resilience last year but it too is now succumbing to structural pressure, falling to 47 on the latest release. On the other side of the pond, US manufacturing came in ahead of expectations at 49.4 according to S&P Global; the ISM figure will be published later today. Gold saw some positive momentum yesterday, gaining around $40 to close the day at $2,658 an ounce. Nothing earth shattering but a two-week high nevertheless. Bitcoin experienced a similar move, climbing up to $97k and dragging the rest of the crypto markets along with it. Very little to get excited about on the economic calendar today. Non-Farm Payrolls is delayed until Friday the 10th. Markets are not quite out of hibernation just yet.
Markets are in limbo. Christmas festivities are giving way to New Year celebrations and traders are in no hurry to return to their desks. Just as last week, much of the current will be occupied by market closures and low-liquidity conditions. International markets were predictably subdued over the Christmas period. Currencies had almost nothing to offer; the Dollar stayed strong but did not venture any further to the upside; the DXY remains around 108. The Greenback will be one of the major talking points as we move into 2025. Its resurgence over the past three months has been impressive to say the least – how long can the aggressive push be sustained? A strong Dollar extends far beyond mere currency trading; it affects financial markets in general and factors into the developing geopolitical landscape. With Donald Trump’s inauguration a mere three weeks away, there is no world in which the Dollar does not take centre stage. Gold wrapped up one of the most boring weeks it has had in a long time. The precious metal barely moved out of a $30 trading range all week, leaving behind an entirely unimpressive weekly candle. Gold is still over $100 down from the US election, illustrating the shift in sentiment towards the safe-haven narrative. If the incoming administration can indeed muster an aura of implacability, then flights to precious metals may potentially become less appealing. The economic calendar is looking as cold and gloomy as the weather outside, at least for those of us in the northern hemisphere. Bleak promises of manufacturing PMIs are the only thing on the menu for us wretched souls this week, starting with China tomorrow then Europe and America on Thursday.
Final update before Christmas. Last week, markets were once again at the mercy of the Dollar. Expectations regarding future rate cuts on the Greenback continue to be the dominant factor pushing currency pairs back and forth. Commodities and stocks were equally vulnerable to the whims of the Federal Reserve. So what did the Fed board members have to say? Essentially, that the unexpected resilience in the US economy and labour market, coupled with decreasing inflationary pressures, mean that the need for rapid rate cuts is simply not there. The same cannot be said for other economies around the world, hence the strength observed in the USD. In a well-telegraphed move, the Bank of England elected to maintain rates on the Pound at 4.75% last Thursday, however the decision to do so was less unanimous than economists had predicted. A small surprise, but one that caused Cable to test $1.25 for the second time in as many months. The Euro is facing its own battle, dipping below $1.04 once again and now perched precariously above the danger zone. The Yen also has its own problems to contend with, USDJPY remaining stubbornly high all year and creeping back up to the 160 level last week despite the Bank of Japan’s best efforts. A surging Dollar has put a lot of pressure on gold, which now sits more than $150 off its record high set in late October. Bitcoin has shouldered the pressure much more valiantly over the past couple of months, although it too suffered a harsh reality check last Wednesday following the Fed meeting, which forced it back down to five figures. The economic calendar is looking especially barren this week, as well it might. Time to focus on matters closer to home. Merry Christmas.
Brutal. Markets across the board suffered through a nasty correction following the latest Fed meeting. The decision itself was not unexpected – an interest rate cut from 4.75% to 4.5% was thoroughly priced in beforehand. The surprise came in the form of next year’s forecasts, which now predict fewer and slower rate cuts than had previously been assumed. The US Dollar shot up unilaterally, demolishing currencies pairs from America to Europe to Asia. The Euro smashed down to $1.035; Cable is down to $1.25; the Australian and New Zealand Dollars are hitting multi-year lows; the Korean Won is now matching prices from back in 2009. Greenback dominance pushed the DXY above 108 for the first time since 2022. Yesterday, the Bank of Japan and Bank of England both elected to forego any rate cuts of their own, as widely expected. Of course, a surging Dollar comes at the expense of everything else. US stock markets fell precipitously on Thursday, the Dow falling 2.6%, the S&P 500 losing almost 3% and the Nasdaq Composite faring the worst of all with a 3.6% loss. Major indices in Europe did not escape unscathed either. Gold took a devastating blow, falling over $60 on Thursday to $2,585 an ounce. Bitcoin plummeted back below $100,000 following the meeting, taking the wider crypto market along with it. A rough day in the office to say the least. The only real significant event remaining this week is the publication of the PCE price index later today. The figures have been known to influence the Fed decisions in the past, but the next FOMC meeting is not until the 29th of January. Next week has almost nothing to offer in terms of tradeable events either. Time to settle down for the year.
