Articles

There have been multiple reports saying that the most likely OPEC+ result is an extension of production curbs through Q1, followed by the start of the planned return of barrels.

Normally, I would argue that’s priced in and tomorrow’s price action should be smooth if/when that’s announced. However, the oil market operates differently and there have been a multitude of ‘expected’ OPEC decisions where the oil price makes a big move anyway, usually to the downside.

With that in mind, crude is down $1.15 today after rising as much as 40-cents earlier in New York trade. And that comes despite a bullish weekly US inventory report.

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

A report yesterday said Atkins was reluctant to take the job. Coindesk reported that Atkins was hesitant to leave his global consulting firm to clean up what
he sees as a bloated agency mismanaged by departing SEC chair Gary
Gensler, citing a person familiar.

Atkins was SEC Commissioner from 2002-2008 under George W Bush.

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

RBC execs:

• Expect Canadian economy to continue softening in 2025 with GDP and population growth slowing
• Credit losses to be in the mid 30s and peaking in the second half of the year
• Canadian economy has been underperforming, expects BOC to continue cutting rates more aggressively than the Fed
• Backdrop in the US has been far more resilient
• Potential of expansive US fiscal policy could create uncertainty around the size and timing of monetary policy actions

National Bank execs:

• Canadian economy to experience slower growth in H1 as interest rates remain restrictive
• Economy will face uncertainties related to path of mon pol and divergence between the BOC and Fed
• Challenging credit environment expected to temper net income growth for financial markets segment

With the ECB essentially teeing up a 25 bps cut and the Fed leaning towards 25 bps, the Bank of Canada is shaping up to be the toughest central bank decision to handicap. The market is pricing a 53% chance of 50 bps and a 47% chance of 25 bps for the Dec 11 meeting.

Based on these comments, they would be wise to go big but that will further weigh on the Canadian dollar.

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

December is a bullish month for stocks historically and markets are following the script so far.

The Nasdaq is leading the way to, up 1.0% and hitting a new record. It’s a nice looking breakout and comes after a softer ISM services report underscores the likelihood of a Fed cut this month.

One of the winners within the index is Amazon, which is up nearly 3% to a new record at $220 per share.

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

• Prior was -1844K
• Gasoline inventories +2362K vs +639K expected
• Distillate inventories +3383K vs +940K expected
• Refinery utilization +2.8% vs +0.5% expected

Private inventories released yesterday:

• Crude +1232K
• Gasoline +4623K
• Distillates +1014K

The official numbers are better than the private data. WTI crude oil was down 27 cents to $69.69 ahead of the data.

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

The euro is at the highs of the day as part of a broad slump in the US dollar. It’s tempting to attribute this move to some kind of French politics move but it’s broad and comes after the ISM services data miss.

US 10-year yields are now flat at 4.23% compared to a high of 4.28% earlier.

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

• Source cited by Reuters said the aim is to name a new PM ahead of the reopening of Notre-Dame

The main thinking is that he will choose a technocrat or caretaker to nurse things along ahead of a July election.

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

• Prior was -0.5%
• Factory goods orders ex transportation +0.2% vs +0.1% prior
• Durable goods orders +0.3% vs +0.2% preliminary. Last month was -0.7%
• Durable goods ex transportation +0.2% vs +0.1% preliminary. Last month +0.1%
• Durable goods ex defense +0.5% versus -1.1% prior
• Durable goods nondefense capital goods orders ex-air -0.2% versus -0.2% preliminary. Last month +0.7%

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

• Prior was 56.0 (was best since Sept 2023)
• Employment 51.5 vs 53.0 prior
• New orders 53.7 vs 57.4 prior
• Prices paid 58.2 vs 58.1 prior
• Supplier deliveries 49.5 vs 56.4 prior
• Inventories 45.9 vs 57.2 prior
• Backlog of orders 47.1 vs 47.7 prior
• New export orders 49.6 vs 51.7 prior
• Imports 53.8 vs 50.2 prior
• Inventory sentiment 54.6 vs 53.0 prior

Comments in the report

• “Federal Reserve interest rate cuts have not had the desired effect
  on mortgage rates yet. With election results mostly determined,
  expansion of residential construction is anticipated, but the unknown
  effect of tariffs clouds the future.” [Construction]
• “All operations are normal at the moment. Nothing local or national
  that is having any major effect on our operations.” [Educational
  Services]
• “Higher level of activity is driving the need for additional resources.” [Finance & Insurance]
• “We have concern after the presidential election that tariffs will
  affect prices for electronics and components in 2025.” [Information]
• “Domestic lead times still seem very long. We are having to go to
  China for many electrical equipment requirements. Even after tariffs,
  the price is half, and so are the lead times.” [Management of Companies
  & Support Services]
• “Election results and the potential tariff changes would impact
  inventory and lead to higher prices in the hospital supply chain. What
  we saw during COVID-19 with startup U.S. production is a warning sign
  again.” [Professional, Scientific & Technical Services]
• “Construction materials are shorted or hard to get due to increased
  construction projects in the area and (in the) U.S. Sometimes projects
  are delayed due to this.” [Public Administration]
• “We finished a solid quarter and are planning on a similar holiday
  period. Not breaking any records, but positive.” [Retail Trade]
• “Still waiting to see how presidential cabinet picks shake out, if
  they are confirmed and how they will affect our operations going
  forward. Holding capital projects now until the cabinet is complete and
  we know how federal funds will be dispersed going forward.”
  [Transportation & Warehousing]
• “Even though we are reducing our spending and our employment levels,
  we have a positive outlook for 2025 performance with expected
  reinvestment of funds.” [Utilities]

This is a cool report and should bump up Fed cut odds while weighing on the US dollar. Current Fed cut odds are up to 75% from 70%. They’ll swing further on the Beige Book at 2 pm ET

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

• Prelim was 57.0
• Prior was 55.0
• Composite 54.9 vs 55.3 prelim (54.1 prior).

• Services PMI jumps to 56.1 in November from 55.0 in October
• Fastest expansion since March 2022
• New orders growth strongest since April 2022
• Employment falls for 4th straight month despite strong activity
• Output price inflation hits 4.5-year low

The ISM services report is due at the top of the hour.

Chris Williamson, Chief Business Economist at S&P Global
Market Intelligence

“Improved service sector output offset a further decline in
manufacturing during November, helping drive the overall
pace of growth of business activity to the fastest for over two
and a half years. The recent survey data are consistent with
GDP growing at an annualized 2.6% rate in the fourth quarter,
assuming a similarly robust expansion is seen in December.

“Companies have reported stronger demand for services
thanks to the clearing of political uncertainty following the
election, as well as brighter prospects for the economy in
2025 linked to the incoming administration and hopes for
lower interest rates. The latter, alongside strong market gains
in recent weeks, has helped drive an especially strong surge
in demand for financial services, though November also saw
robust growth for business and consumer services.

“It was surprising to see employment continue to fall, given the
strength in demand for services reported during November,
which hints at ongoing labor supply issues and the potential
for stubborn wage growth. However, despite another month
of above-average input cost inflation in the services sector,
average prices charged for services rose only very slightly amid
increased competition.”

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

• Composite PMI 51.5 vs 50.7 prior
• Services PMI rises to 51.2 from 50.4 in October, highest since April 2023
• Employment growth hits 14-month high
• Input costs remain elevated despite slowing from October peak
• Export orders decline accelerates amid global conflicts and cost pressures

Paul Smith, Economics Director at S&P Global Market
Intelligence, said:

“November proved to be a relatively positive month for
the Canadian service sector, with activity rising for a
second successive month and to a stronger degree than
in October. However, the upturn was limited to some
extent by almost no growth in new business volumes, and
firms remain concerned over the underlying strength of
business conditions despite the stimulative impact on
economic activity of lower interest rates.

“That said, firms retain some confidence in the outlook
amid hopes of a more stable geopolitical environment
and further reductions in borrowing costs in the year
ahead. However, it’s worth noting that the latest
survey took place before US President-elect Trump’s
announcement of changes to US trade policy in 2025.
Although the scope and nature of tariffs on Canadian
goods and services remains uncertain at this stage,
already fragile confidence and economic growth is likely
to be hit again in the coming months.”

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

The CEO of UnitedHealthcare was shot dead just before 7 am according to New York’s PIX11 news. Brian Thompson heads the group, which is one of the two main subsidiaries of United Health $UNH along with Optum.

The company was holding its investor day today and he was due to attend the conference today.

For some reason, the conference wasn’t delayed (hopefully because the company wasn’t informed), CNBC reported that parent group CEO Andrew Witty kicked off investor day saying “we’re going to demonstrate once again, that when the going gets tough, the tough get going.” Ouch.

Thompson was 50.

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