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It’s a patchy week of holidays, official and unofficial. The best trade idea might be to chill out and recharge, but different people have different ideas. If you would like to share trade ideas, this is the thread for you!

This article was written by Eamonn Sheridan at www.forexlive.com.

The bond market got a reprieve on Friday with the cooler PCE report. You would think today’s soft consumer confidence data would also help bring down yields but that’s not the case.

Instead, US 30-year bond yields are up 6.3 bps to 4.78%, which is the highest since May. The late-April high of 4.85% is now within striking distance and I suspect that would set off alarm bells.

I think this one is more about congress than the underlying economy. Trump made a big fuss about ditching the debt ceiling, which isn’t exactly a sign of fiscal restraint. Congress will have to decide how to extend the Trump corporate tax cut in the year ahead and we will also see how serious they are about bringing down the fiscal deficit, which is running around 7% of GDP.

Surely there is some low-hanging fruit in government but so much of the budget is now spent on interest, the military and entitlements that it’s tough to make a dent without any help on the revenue side. The fear is that we get some kind of Liz Truss moment and a jump in yields, particularly if we get more inflationary spending.

Despite all this angst, there is a contrarian call for buying bonds as just 2% of fund managers see government bonds as the best-performing asset class in 2025:

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

This was released earlier:

• Prior was +0.8%
• Nondefense capital goods orders ex-air +0.7% vs -0.1% prior
• Ex transport -0.1% vs +0.3%

The core orders number is the important one and it showed a nice rebound is November. The problem I’m seeing is that industrial company stocks have been plunging lately. Here’s Nucor, which is the largest steel producer in the United States. You would think there would be a Trump bump as he’s more likely to add tariffs but it’s been straight downhill after a post-election gap up.

Shares are at their lowest level in more than 2 years.

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

• Prior revised to -14.8% m/m
• Sales at 0.664m vs 0.660m expected
• Supply at 8.9 months vs 9.2 months prior
• Median price $402,600 vs $429,600 prior
• Median price -6.3% y/y

With 30-year fixed rates back up above 7%, it’s looking like 2025 will be a tough year in the housing market. This number is largely in line with expectations.

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

• Prior was 111.7 (revised to 112.8)
• Present Situation Index 145.2 vs. 140.9 prior
• Expectations Index 81.1 vs 92.3 prior
• 12-month inflation expectations vs 4.9% prior

This is a big disappointment and lands at the peak of shopping season.

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

• Prior was +1.1%
• Monthly PPI +0.6% vs +1.2% prior
• Raw materials price index +2.0% vs -2.8% y/y prior
• Raw materials price index -0.5% vs +3.8% m/m prior (revised to -2.6%)

The falling Canadian dollar is a big reason why this report as been climbing in the past two months as most commodities are priced in USD. These are the seeds of currency-driven inflation, though given the weakness in the Canadian economy, this isn’t the kind of thing that causes a wage-price spiral.

Some drivers:

• Prices for lumber and other wood products (+5.7%) posted the largest month-over-month increase since
  March 2022
• Energy and petroleum products rose 1.1% in November
• Prices for motorized and recreational vehicles rose 0.7% month over month in November
• The largest upward
  contributor to November’s year-over-year increase was unwrought gold, silver, and platinum group metals, and their
  alloys (+32.5%)

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

The estimate for November 0.1%

• Prior month 0.1%
• Canada GDP for October 0.3% vs 0.1% estimate
• November est is 0.1% Decreases in mining, quarrying, and oil and gas extraction, transportation and warehousing, and finance and insurance were partially offset by increases in accommodation and food services and real estate and rental and leasing.

Details:

• Goods-producing industries: Up 0.9%, led by mining, quarrying, and oil and gas extraction.
• Services-producing industries: Up 0.1%, driven by real estate and rental and leasing activity (fifth consecutive month of growth).
• Sector performance: 12 of 20 sectors expanded in October.

The Mining sector led the growth for the month.

• Mining, quarrying, and oil and gas extraction expanded 2.4% in October after three months of contraction.
• Oil and gas extraction:
  • Grew 3.1%, driven by oil sands extraction (+5.2%), the largest increase since December 2020.
  • Oil sands activity resumed after maintenance, with some facilities reaching record production.
  • Natural gas extraction increased, offsetting a decline in crude petroleum.
• Mining and quarrying (except oil and gas):
  • Grew 0.8%, led by metal ore mining (+1.4%).
  • Copper, nickel, lead, and zinc ore mining rose 2.3%.
  • Iron ore mining increased 1.3%, recovering from equipment failures in September.
  • Coal mining surged 4.1%, driven by thermal coal production in Alberta.
• Support activities for mining and oil and gas extraction:
  • Rebounded 1.3%, boosted by higher drilling and rigging activity

In other sectors:

• Real estate and rental and leasing up for the 6th consecutive month by 0.5%
• Constuction up for the 3rd month by 0.4%
• Wholesale trade up 0.5% for the 2nd increase in a row.
• Transportation and warehousing up by 0.2% for the 3rd increase in a row despite strike activity

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This article was written by Greg Michalowski at www.forexlive.com.

We’ve entered a traditionally-quiet time of the year in financial markets but it seems like Christmas traditions aren’t what they used to be. The FX market is lively so far today with USD/JPY up another 75 pips.

There is something of a sigh of relief in equities after Congress passed the bill to avoid the government shutdown late on Friday. S&P 500 futures are up 6 points with stocks in Europe modestly higher.

Treasury yields are up 1-3 bps across the curve and that’s helped to lift the US dollar broadly.

There are a few notable releases today starting at the bottom of the hour with Canadian October monthly GDP and the November PPI report.

Then at 10 am ET, the focus turns to US consumer confidence, which is expected to rise to 113.3 from 111.7. There hasn’t been as much of a Trump-bump in some of the data as I expected but it’s still early.

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

It is a holiday week with Christmas eve tomorrow and Christmas day on Wednesday breaking up the action. Nevertheless the markets will be open in the US on Monday and again on Tuesday for a portion of the day. The US stock market will close early on Tuesday at 1 PM ET, while the Bon market will close at 2 PM ET, and not be open until Thursday. Looking ahead to the New Years week, Bond markets will close early on Tuesday, Dec. 31, while stocks trade in regular hours. Both are closed on Wednesday, Jan. 1.

On Saturday, Congress passed and President Biden signed a stopgap spending bill to avert a government shutdown, extending funding until March 14 and providing over $100 billion in disaster relief and farm aid. House Speaker Mike Johnson overcame opposition from GOP critics, President-elect Trump, and Elon Musk to secure bipartisan support.

Key points:

• House vote: 366-34; Senate vote: 85-11.
• Key provisions: $100 billion for disaster relief, $10 billion for farmers, a one-year extension of the farm bill, and funding for the reconstruction of Baltimore’s Francis Scott Key Bridge.
• Removed provisions: China investment restrictions, lawmaker pay raises, “junk fees” crackdown, and a stadium site transfer to D.C.
• Trump’s demand for a debt ceiling increase was excluded, with GOP lawmakers pledging to address it in 2025.
• Johnson’s handling of the bill raised doubts about his re-election as Speaker, but Musk praised his efforts.
• Democrats emphasized their role in defeating extreme GOP demands to prevent economic harm.

In other Washington news, the Biden administration launched a trade investigation into Chinese-made “legacy” semiconductors, potentially leading to more tariffs on chips used in autos, appliances, and telecom gear. T

In Europe today UK GDP came in slightly weaker than expected :

• Q3 QoQ: 0.0% vs. expected 0.1% (Previous: 0.1%).
• Q3 YoY: 0.9% vs. expected 1.0% (Previous: 1.0%).

ECB (European Central Bank):

• Lagarde emphasizes vigilance and nearing the stage for inflation to meet the 2% target, stating progress depends on wages catching up with prices.
• Makhlouf indicates uncertainty for 2025 and prefers gradual rate adjustments over sharp changes unless justified by evidence.

Canada GDP for October is expected to show a 0.1% gain when it is released at 8:30 AM ET. The IPPI and RMPI will also be released at 8;30 AM with expectation of 0.3% and 0.4% respectively.

US consumer confidence will be released at 10 AM ET with expectations of 113.3 vs 111.7 last month

Looking at the markets, US stocks are up in premarket trading, The futures are implying:

• Dow is down -73 points after rising +498 points on Friday
• S&P is up 9.65 points after rising 63.77 points of Friday
• Nasdaq is up 104 points after rising 199 points on Friday

In the US debt market yields are higher by 1 to 3 basis points:

• 2 year 4.325%, up 1.3 bps
• 5 year 4.395%, up 1.7 bps
• 10 year 4.548%, up 2.4 bps
• 30 year 4.746%, up 3.1 bps

In the forex, the US dollar is higher across the board. The greenback is highest vs the CHF with a gain of 0.55%, and up the least vs the AUD (+0.19%) and NZD (+0.18%).

Crude oil is down -$0.38 or -0.80% at $69.11. Gold is down about -$8.00 or -031% at $2614.

Bitcoin is up $1000 on the day at $96,102, but is down from the Friday close at $97,760. The low for the weekend reached $93,639.European shares are mixed:

• German Dax unchanged
• France’s CAC +0.22%
• UK FTSE 100 +0.24%
• Spain’s Ibex Unchanged
• Italy’s FTSE MIB +0.23%

This article was written by Greg Michalowski at www.forexlive.com.

Gold is down 1.3% on the month and the decline this month largely stems from a more hawkish Fed from last week. Barring a stirring rally in the coming week or so, gold looks poised to snap its seven year win streak in December in 2024 trading.

In the past decade, December is the second best month for gold behind the usual January rush. The latter has been a bit mixed in recent years but December has proven to be quite a consistent trend. That is up until now I guess.

The difference this year for gold is that it has observed nine straight months of gains prior to November. It is quite an unprecedented run as seen with the monthly changes above. And even with the recent decline in the past two months, it is still up nearly 27% this year. That puts gold on course for its best performing year since 2010.

So, one can argue that the consistent hot streak this year sort of takes away from usual buying rush in December and perhaps next month in January. That especially with conditions lining up for some profit-taking amid a more hawkish Fed and some technical obstacles.

For now, gold is moving back up above its 100-day moving average of $2,609 as it trades at around $2,617 currently. That’s a key line in the sand to watch in the weeks ahead after the recent double top at the 25 November high of $2,721.

If sellers can push the boundaries to hold a break below the key level, that will set the foundations for another potential break of the seasonal indicator when we get to January trading.

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

The Biden administration has just announced a trade investigation into “legacy” Chinese-made semiconductors today. And that could see it lead to more tariffs on chips from China that are used for autos, washing machines and telecoms gear among other things. This “Section 301” probe is coming just less than a month before Trump takes office on 20 January 2025. The officials say that the investigation will then be handed over to Trump’s government for completion.

If anything, it just creates another avenue for Trump to impose hefty tariffs on China amid threats of a 60% tariff slap.

As for Biden, this builds on his escalation in this space over the last few months:

• US reportedly finalises steep tariffs on China, with many to begin on 27 September
• Latest US trade restrictions reportedly set to hit China’s semiconductor industry
• Biden administration to unveil more tariffs in parting gift to China

The USTR says that the latest probe will target mature-technology chips that power autos, appliances, medical devices, and other goods. The probe is supposedly based on evidence that “China is using anti-competitive, non-market policies to dominate global chip production”.

Once Trump takes office, the investigation will be handed over to his administration accordingly next month. The USTR will be accepting public comments on the probe as of 6 January before plans for a public hearing on 11-12 March next year.

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

The post Ex-Dividend 24/12/2024 first appeared on IC Markets | Official Blog.