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There is some major intrigue around central bank decisions in December and the Bank of Canada will be one of the first ones off the starting blocks on December 11. At the moment, the market is leaning 70/30 in favour of 25 bps rather than 50 bps.

But that will swing based on today’s GDP data, which is due at the bottom of the hour. The consensus is +1.0% growth in a clear slowdown from 2.1% in Q2. Eyes will also be on the Sept monthly reading, which is expected at +0.3%.

Other than that, the economic calendar is bare for North American traders. US markets are open but it’s a de facto holiday so that should thin volumes but beware of month-end flows.

For what’s coming up next week, see the economic calendar.

This article was written by Adam Button at www.forexlive.com.

Headlines:

• USD/JPY tests 150.00 mark after Tokyo inflation speeds up
• Gold Technical Analysis – The path of least resistance remains to the upside
• Eurozone November preliminary CPI +2.3% vs +2.3% y/y expected
• France November preliminary CPI +1.3% vs +1.5% y/y expected
• Italy November preliminary CPI +1.4% vs +1.4% y/y expected
• France Q3 final GDP +0.4% vs +0.4% q/q prelim
• Switzerland Q3 GDP +0.4% v +0.4% q/q expected
• Germany November unemployment change 7k vs 20k expected
• Germany October retail sales -1.5% vs -0.3% m/m expected
• Germany October import price index +0.6% vs +0.1% m/m expected
• ECB consumer expectations survey shows inflation edging up slightly in the year ahead
• BOE governor Bailey: We are very supportive of growth

Markets:

• JPY leads, USD and EUR lag on the day
• European equities higher; S&P 500 futures up 0.3%
• US 10-year yields down 3.1 bps to 4.211%
• Gold up 0.9% to $2,664.48
• WTI crude down 0.2% to $68.60
• Bitcoin up 2.3% to $97,375

The big mover so far today remains the Japanese yen, after it surged higher in Asia trading following stronger Tokyo inflation data. That owed in part to the lapse of government energy subsidies but nonetheless, traders are taking it as a signal for a potential rate hike by the BOJ next month.

USD/JPY dipped under 150.00 before weaving in and around the figure level after, with the low touching 149.55 in European morning trade. But now, the pair is hugging close to the figure level again but still down roughly 1% on the day at 150.08.

Besides that, major currencies didn’t get up to much otherwise. The dollar is trading lightly changed against the rest of the bloc with EUR/USD and GBP/USD pretty much flat at 1.0551 and 1.2684 respectively. That said, both pairs did hold higher early on before easing back a little now ahead of US trading.

In terms of data releases, we did get the preliminary CPI figures for the Eurozone for November. The headline reading is higher amid base effects i.e. energy price developments but the core reading remained steady. Meanwhile, services inflation also eased a touch on the month. At the balance, it reaffirms a 25 bps rate cut by the ECB for next month.

Looking to broader markets, Treasury yields are keeping lower as we await the return of US traders from Thanksgiving. 10-year yields are down 3 bps to near 4.21% on the day, keeping the dollar in check. Meanwhile, US futures are pointing a little higher with tech shares looking to keep the upside run going.

But just keep in mind that liquidity conditions are likely to be thinner than usual as the Thanksgiving holiday period tends to usually carry through until the weekend. So, some market participants might not be in the picture for today. That even more so as we already arguably saw a month-end rush in terms of flows on Wednesday.

In other markets, gold is sitting higher as it looks to bounce back up going into December trading. The precious metal is still slated to end the month lower but is seen up nearly 1% to $2,664 on the day.

All in all, USD/JPY has been the standout mover in what otherwise has been a more sluggish week for the dollar. But how much of it has to do with month-end or a potential retracement to the post-election gains, we’ll have to wait to find out next week with the US jobs report also in focus then.

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 02/12/2024 first appeared on IC Markets | Official Blog.

• Prior +0.9%
• HICP +1.6% vs +1.5% y/y expected
• Prior +1.0%

The nudge higher owes to base effects, similar to the rest of the euro area. However, core annual inflation is also seen marginally higher on the month – up from 1.8% in October to 1.9% in November. That said, it is still holding under 2% so that’s some comfort for the ECB as compared to the likes of Germany.

This article was written by Justin Low at www.forexlive.com.

• Prior +2.0%
• Core CPI +2.7% vs +2.8% y/y expected
• Prior +2.7%

The headline estimate may have nudged higher in November, largely due to base effects, but the core estimate remains steady at 2.7%. If anything, it reaffirms a 25 bps rate cut for next month as the disinflation path remains bumpy in the euro area. Looking at the details, services inflation did come down a little from 4.0% in October to 3.9% in November.

This article was written by Justin Low at www.forexlive.com.

• Prior 65.65k; revised to 66.12k
• Net consumer credit £1.1 billion
• Prior £1.2 billion

Slight delay in the release by the source. That’s a notable jump in mortgage approvals, with the reading being the highest since August 2022. It reaffirms the strong sentiment surrounding the UK property market, with prospects likely to improve further as the BOE is still set to cut rates further. The ‘effective’ interest rate on newly drawn mortgages fell further by 15 bps to 4.61% in October. And that’s the lowest since May 2023.

This article was written by Justin Low at www.forexlive.com.

Inflation expectations for the next 12 months is seen at 2.5% and that is up from the 2.4% reading in September. That said, it is still keeping well lower than the readings in July and August of 2.8% and 2.7% respectively. Meanwhile, inflation expectations for three years ahead is seen at 2.1% – unchanged from September.

For the full release, you can check out the ECB post here.

This article was written by Justin Low at www.forexlive.com.

• Prior 27k
• Unemployment rate 6.1% vs 6.1% expected
• Prior 6.1%

This article was written by Justin Low at www.forexlive.com.

• Eurostoxx -0.1%
• Germany DAX +0.1%
• France CAC 40 flat
• UK FTSE +0.1%
• Spain IBEX -0.3%
• Italy FTSE MIB -0.1%

The changes are light but it reaffirms a more tentative mood in kicking off the final trading day of November. On the month itself, this is how regional indices are faring:

• Eurostoxx -1.6%
• Germany DAX +1.9%
• France CAC 40 -2.3%
• UK FTSE +2.2%
• Spain IBEX -0.9%
• Italy FTSE MIB -3.0%

US futures are sitting a little higher today though, but largely dragged up by tech shares. S&P 500 futures are up 0.3% with Nasdaq futures up 0.5%. Dow futures are only marginally higher by 0.1%.

This article was written by Justin Low at www.forexlive.com.

• Prior 99.5; revised to 99.7

It’s an improvement to the month before but the recent trend points to more sideways momentum in the Swiss economy. And that suggests flagging economic conditions with a more challenging outlook surrounding Europe in general going into next year.

This article was written by Justin Low at www.forexlive.com.

• Prior +0.7%; revised to +0.6%

The Swiss economy continued to expand modestly in Q3 but headwinds are building in the final quarter of the year. With the euro area economy also slowing down in general, Switzerland won’t be able to escape that plight as well.

This article was written by Justin Low at www.forexlive.com.

• Prior +1.2%
• HICP +1.7% vs +1.7% y/y expected
• Prior +1.6%

This just confirms a slight uptick in French consumer prices on the month. It is largely to do with base effects but looking at the details, services inflation is also seen nudging higher from 2.3% previously to 2.5% in November. That might be a worry if it starts to feed into the core reading more meaningfully as well when we get to see the final estimate.

This article was written by Justin Low at www.forexlive.com.