EURUSD
- The EUR/USD faces selling pressure, dipping below the key 1.0900 psychological mark on Monday. This decline follows surprisingly low inflation figures in major economies, prompting expectations of a European Central Bank (ECB) interest rate cut in the coming year.
- Traders are betting on a deeper easing cycle by the ECB, spurred by the weak inflation data. The anticipation of future monetary policy adjustments contributes to the selling sentiment surrounding the euro.
- The dollar weakened after dovish comments from Fed Chairman Jerome Powell on Friday. Powell's statements supported the belief that the Federal Reserve is concluding its interest rate hiking cycle and may shift towards an easing posture in 2024.
- The US manufacturing sector shows signs of weakness in November, with the Institute for Supply Management (ISM) reporting that the Manufacturing PMI remained subdued at 46.7, below expectations. This adds to the narrative of a less robust economic recovery.
- Market participants are closely monitoring the upcoming speech by ECB President Christine Lagarde. These events are poised to provide further direction for the EUR/USD pair.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The EUR/USD experiences downward pressure amid concerns about low inflation, potential ECB rate cuts, and a dovish stance from the Fed. Key economic indicators and ECB commentary today are crucial in determining the future trajectory of the currency pair.
GBPUSD
- The GBP/USD exhibits strength, supported by hawkish remarks from Bank of England (BoE) officials. The comments underline the commitment to maintaining higher interest rates for an extended period.
- Monetary Policy Committee (MPC) member Megan Greene emphasizes the need for a restrictive monetary policy for an extended duration to achieve the BoE's 2% inflation target. She expresses concerns about the persistence of inflationary pressures.
- Another BoE MPC member, Jonathan Haskel, highlights that low unemployment levels may contribute to keeping interest rates elevated. This viewpoint adds to the overall hawkish sentiment within the Bank of England.
- The Nationwide Housing Prices report for the UK in November shows a 0.2% month-on-month increase, surpassing expectations. Positive data in the housing sector contributes to the overall positive outlook for the Pound.
- S&P Global releases the final estimate of the November Manufacturing PMI for the UK, which is upwardly revised to 47.2 from the preliminary estimate of 46.7. This indicates a slightly improved manufacturing sector.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The GBP/USD remains buoyant, propelled by hawkish signals from BoE officials, positive housing prices data, and an upward revision in the Manufacturing PMI. The focus is on sustained monetary policy tightening and economic indicators supporting the Pound's strength against the US Dollar.
GOLD
- Gold prices are consolidating below $2,100, retracing from the recent all-time high of around $2,145 observed early Monday.
- The precious metal gained support from renewed safe-haven flows, triggered by geopolitical tensions between Yemen and the US over the weekend, adding to existing concerns in the Middle East due to a failed truce between Israel and Hamas.
- Despite the geopolitical risks, the US Dollar (USD), another safe-haven asset, didn't see significant gains. This lack of response is notable as markets increasingly price in a 60% probability of a March Fed rate cut, reflecting diminished confidence in the Fed's hawkish stance.
- Fed Chair Jerome Powell's attempts on Friday to counter expectations of a policy pivot in 2024 faced skepticism. The market appears unconvinced by Powell's hawkish rhetoric, particularly amid signs of cooling inflation in the US.
Closing statement: Gold is in a consolidation phase below $2,100, primarily driven by renewed safe-haven demand amid geopolitical tensions. The limited response of the US Dollar and skepticism towards Powell's hawkish stance suggest ongoing uncertainty and caution in the market.
CRUDE OIL
- Western Texas Intermediate (WTI) is down to $73.60, marking a third consecutive day of negative performance.
- WTI prices are influenced by the OPEC+ decision, where the organization agreed to implement voluntary output cuts for the first quarter of 2024.
- Declining WTI prices are linked to uncertainties surrounding global fuel demand growth. The market is closely monitoring factors influencing the future trajectory of demand.
- Mixed economic data from China contributes to the negative sentiment. While the Caixin Manufacturing PMI exceeded expectations, NBS Manufacturing and Services PMI fell below estimates, creating a nuanced outlook for oil demand.
- Traders are attentively observing recent developments in geopolitical tensions in the Middle East, as such events have the potential to impact oil prices.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The recent decline in WTI prices is driven by a combination of OPEC+ decisions, concerns about global fuel demand, mixed Chinese economic data, and geopolitical tensions in the Middle East. Continued monitoring of these factors is crucial for oil market participants.
DAX
- Friday's positive session kick-started with better-than-expected manufacturing sector data from China, with the Caixin Manufacturing PMI rising from 49.5 to 50.7 in November.
- The Euro area manufacturing sector PMI numbers provided reassurance. Upward revisions in both German and Eurozone Manufacturing PMIs indicated improving conditions within the sector.
- Late in the European session, sentiments were bolstered by Fed Chair Powell's remarks, dispelling speculation about an H1 2024 rate cut and enhancing the appeal of riskier assets.
- Germany's trade surplus expanded to €17.8 billion in October, up from €16.5 billion the previous month, according to data from the Federal Statistical Office Destatis, reinforcing positive economic indicators.
- With recent inflation and manufacturing PMI data in mind, investors are focusing on ECB commentary. ECB President Christine Lagarde is scheduled to speak, and her insights will be pivotal for market direction.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX experienced positive momentum fuelled by favourable Chinese manufacturing data, upbeat Eurozone manufacturing indicators, Powell's statements, and an expanding German trade surplus. Moving forward, attention is on ECB commentary, particularly Christine Lagarde's upcoming speech.