Articles

UPCOMING
EVENTS:

• Monday: China Caixin Services PMI, German CPI, Canada
  Services PMI.
• Tuesday: Switzerland CPI, French CPI, Eurozone CPI, US ISM
  Services PMI, US Job Openings.
• Wednesday: Australia Monthly CPI, Eurozone PPI, US ADP,
  FOMC Minutes.
• Thursday: Japan Average Cash Earnings, Eurozone Retail
  Sales, US NFIB Small Business Optimism Index, US Jobless Claims.
• Friday: Switzerland Unemployment Rate, Canada
  Employment Report, US NFP, US University of Michigan Consumer Sentiment.

Tuesday

The Swiss CPI Y/Y
is expected at 0.6% vs. 0.7% prior, while the M/M measure is seen at -0.1% vs.
-0.1% prior. As a reminder, the SNB cut its policy rate by 50 bps at the last decision bringing it to 0.50%
and dropped the language signalling further cuts in the coming quarters.

This suggests that
the central bank will likely slow the pace of easing which is something that
the market was already expecting with two 25 bps cuts priced in for this year.
The SNB has projected inflation to average 0.3% in Q1 2025, so this is going to
be the baseline for the next meeting in March.

The Eurozone CPI
Y/Y is expected at 2.4% vs. 2.2% prior, while the Core CPI Y/Y is seen at 2.7%
vs. 2.7% prior. As a reminder, the ECB cut the policy rate by 25 bps at the last decision bringing it to 3.00%.

The central bank
removed the passage saying that “it will keep policy rates sufficiently
restrictive for as long as necessary” implying that upside inflation risks have
faded. The market sees a 92% probability of a rate cut at the upcoming meeting
and a total of 102 bps of easing by year end.

The US ISM
Services PMI is expected at 53.0 vs. 52.1 prior. The S&P Global US Services PMI showed once again an acceleration in services
activity rising to a 38-month high. New orders rose at a rate not seen since
March 2022 and inflation remained subdued with prices rising at the slowest
pace since June 2020. Definitely a very good picture for the services sector.

The US Job
Openings are expected at 7.700M vs. 7.744M prior. The last report beat expectations with the quits rate rebounding but
the hiring rate falling back to the cycle lows. It’s a labour market where at
the moment it’s hard to find a job but there’s also low risk of losing one.
There’s a decent chance that things will improve this year though and there
have been some positive signs already.

Wednesday

The Australian
Monthly CPI Y/Y is expected at 2.3% vs. 2.1% prior. As a reminder, the RBA softened further its stance at the last policy decision as it nears
the first rate cut. The market is seeing a 52% chance of a 25 bps cut in
February although the first fully priced in cut is seen in April. We get the Q4
CPI and the Employment data before the February meeting which could see the
market strengthening the case for an earlier cut.

Thursday

The Japanese
Average Cash Earnings Y/Y is expected at 2.7% vs. 2.6% prior. As a reminder, the
BoJ left interest rates unchanged as expected at the last policy decision, but
Governor Ueda delivered a less hawkish than expected presser.

In fact, he placed
a great deal on wage data to decide on the timing of the next rate hike and
added that the trend will become clearer in March or April. This made the
market to price out the probabilities for a hike in January and push back once again to the next meeting which is
scheduled for March.

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
continue to hover around the cycle highs.

This week Initial
Claims are expected at 217K vs. 211K prior, while there’s no consensus for
Continuing Claims at the time of writing although the prior release saw a
decrease to 1844K vs. 1910K prior.

Friday

The Canadian
Employment report is expected to show 25.0K jobs added in December vs. 50.5K in
November and the Unemployment Rate to rise further to 6.9% vs. 6.8% prior. The
last report saw a strong headline number, but the details were negative pretty
much across the board.

CIBC
cited large public sector job gains, highest unemployment rate since 2016 and
private sector employment growth being less than half than labour force growth. In fact, the rise in unemployment since early 2023 has been mainly due to
increased difficulty finding a job. Layoffs have not played a large
role as it’s usually the case in a recession.

As a reminder, the
BoC cut the policy rate by 50 bps as expected at the last decision but
dropped the language indicating further rate cuts. This suggests that the
central bank has reached the peak in its dovish stance, and it will now slow
the pace of cuts conditional to the data. The market expects at least two more
25 bps cuts this year with a 71% probability of one coming already this month.

The US NFP report
is expected to show 160K jobs added in December vs. 227K in November and the
Unemployment Rate to remain unchanged at 4.2%. The Average Hourly Earnings Y/Y
is expected at 4.0% vs. 4.0% prior, while the M/M measure is seen at 0.3% vs.
0.4% prior.

The Fed projected
the unemployment rate to average 4.3% this year. They will likely tolerate
overshoots of 10 or 20 bps if inflation doesn’t cooperate. Nonetheless, the
focus switched back to inflation, so the next CPI report is going to have a
bigger influence than the NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Dear Client,

Please find our updated Trading schedule and general information related to the Martin Luther King Day on Monday, 20 January, 2025. 

Liquidity over the holidays is expected to be particularly thin so please take the necessary precaution to ensure that you are not affected by increased volatility, spreads and intermittent pricing.

All times mentioned below are Platform time (GMT +2).

Forex & Crypto Pairs:

Precious Metals:

Spot Energies:

Indices:

Energy Futures:

Soft Commodities Futures:

Indices Futures:

Bonds Futures:

Equities:

Kind Regards

IC Markets Global.

The post Martin Luther King Day Trading Schedule – 2025 first appeared on IC Markets | Official Blog.

The latest poll in Canadian from Angus Reid has the governing Liberals at 16%, in a result that could leave them with as few as 5 seats in parliament.

There have been a series of reports on various regional caucus revolts in the past few days and seems as though Prime Minister Justin Trudeau has is on his last legs.

Now, Globe & Mail columnist Lawrence Martin tweets:

Everybody’s gearing up for Trudeau’s resignation announcement, expected by Monday.

The wording on that report is somewhat cryptic and he’s not saying that Trudeau will step down or exactly who is ‘gearing up’ or ‘expecting’ it. He’s certainly well-connected as a political columnist at Canada’s leading newspaper for decades. He recently wrote that Trudeau was ‘finished’.

At Polymarket, the odds of a resignation before February are at 50% (though the site isn’t open to Canadians). There is other smoke here as well with a report saying Mark Carney has reached out to ‘dozens’ of Members of Parliament for a sense of his leadership chances.

What’s tricky here is that the Liberal Party won’t likely have time to run a proper leadership race as opposition parties can topple the government at the end of the month. That could lead to a situation where an interim leader like Carney tries to limit the damage and then tries to leverage whatever success he has (the bar is low vs current polling) to try to remain as leader.

A separate report says the Liberal caucus will meet on Wednesday.

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

Dear Client,

Please find our updated Trading schedule and general information related to the Australia Day on Monday, 27 January, 2025. 

Liquidity over the holidays is expected to be particularly thin so please take the necessary precaution to ensure that you are not affected by increased volatility, spreads and intermittent pricing.

All times mentioned below are Platform time (GMT +2).

Kind Regards

IC Markets Global.

The post Australia Day Holiday Trading Schedule 2025 first appeared on IC Markets | Official Blog.

Dear Client,

Please find our updated Trading schedule and general information related to the Chinese Lunar New Year on Wednesday, 29 January, 2025. 

Liquidity over the holidays is expected to be particularly thin so please take the necessary precaution to ensure that you are not affected by increased volatility, spreads and intermittent pricing.

All times mentioned below are Platform time (GMT +2).

Kind Regards

IC Markets Global.

The post Chinese Lunar New Year Holiday Trading Schedule 2025 first appeared on IC Markets | Official Blog.

• Major US indices snap losing streaks
• Fed Kugler: Economy ended 2024 in a good place. The economy is resilient
• Judge orders Trump to appear for sentencing on January 10 in hush money criminal case
• Crude oil futures settles higher at $73.96
• Johnson has returned to the House floor. Rep Self and Norman have switched vote to Johnson
• Baker Hughes total rig count unchanged at 589
• Bitcoin moves to new highs. Moves away from 100/200 hour MA at $94,800
• European indices declined across the board as money flows into the US stocks
• More from Fed’s Barkin: Still perceive core inflation is coming down nicely
• Atlanta Fed GDPNow growth estimate for Q4 2024 2.4% versus 2.6% on January 2
• More from Fed’s Barkin: US debt is large and growing and puts pressure on long rates
• Fed Barkin: Baseline outlook for 2025 is postive, with more upside than downside risks
• US ISM Manufacturing PMI for December 49.3 vs 48.4 estimate
• Tech stocks rally as NVIDIA and Amazon lead gains
• The USD is lower to start US trading day. What is moving the markets in trading today?
• ForexLive European FX news wrap: No dollar follow up to the gains yesterday.. yet

Market:

• S&P index up +1.26%
• NASDAQ index up +1.77%
• Crude oil up $0.86 and $73.98.
• Gold down $-19.08 or -0.72% at $2638.45
• Bitcoin is up $1400 at $98,314

In the US debt market, yields are higher with the shorter end up the most:

• US 2Y T-NOTE: Yield: 4.2807%, Change: 3.3 bps
• US 3Y T-NOTE: Yield: 4.3222%, Change: 3.8 bps
• US 5Y T-NOTE: Yield: 4.4136%, Change: 3.4 bps
• US 10Y T-NOTE: Yield: 4.5995%, Change: 2.5 bps
• US 30Y T-BOND: Yield: 4.8141%, Change: 1.6 bps

In the US trading session today, the ISM Manufacturing PMI came in stronger than expected of 49.3 versus 48.4 estimate.. That was a highest level since March when the index peaked at 50.3. Before March, the last time the index was above the 50 level was October 2022. The low for 2024 was in October at 46.5.

The forward new orders index reached 52.5 which equaled the highest level for 2024 (reached in January 2024). Both months were the highest levels going back to May. 2022. The low for 2024 was at 44.60.

The not-so-good was at the prices paid index reached 52.5. Although lower than the high level from April at 60.9, it is also above the low for the year at 48.0 reached in September.

The employment component softened to 45.3 with a 2024 low of 43.4 reached in July, and a 2024 high of 51.10 reached in May 2024.

Two Fed members spoke today. Richard Fed Pres. Barkin spoke in the morning. While Fed Governor Kugler spoke shortly after the US stocks closed with CNBC.

As for Barkin, he:

Conveyed a cautiously optimistic outlook for 2025, highlighting a positive baseline with more upside than downside risks to growth. He emphasized that strong employment and asset values are critical for sustaining consumer spending. While inflation remains above target and requires further work, Barkin noted that core underlying inflation is showing signs of improvement and expects 12-month inflation to decline due to base effects.

He pointed out that monetary policy in 2025 will likely take a back seat to economic fundamentals and geopolitics, with the Fed well-prepared to respond as needed. Barkin acknowledged reduced financial market uncertainty and a growing understanding that long-term rates may not decline as much as previously expected, partly due to the pressures of rising U.S. debt. He also mentioned healthy housing demand relative to supply and the likelihood of a labor market favoring increased hiring over layoffs.

Despite these positives, Barkin identified risks, including potential upside risks to inflation and businesses’ concerns about how changes will impact their operations. He stressed the need to remain restrictive for longer, given inflation risks, and indicated that conditions for rate cuts would require confidence in inflation’s return to 2% or a weakening of demand. Additionally, he noted that consumers are becoming more price-sensitive and that the pass-through of tariffs to prices is complex, depending on supply chains and consumer price elasticity. Overall, Barkin underlined the need for vigilance while navigating the economic challenges ahead.

For Fed’s Kugler, she:

Shared an optimistic outlook on the U.S. economy, emphasizing its resilience and strong end to 2024. She noted that the process of disinflation is ongoing, supported by a gradually cooling but stable labor market, with historically low unemployment and rising real wages. Kugler highlighted productivity as a key factor in maintaining a healthy economy with disinflation and expressed optimism about its future role. While immigration has been helpful in balancing the labor market, he acknowledged uncertainty around future immigration trends and the economic impact of tariffs, which may depend on their permanence.

Kugler also emphasized the Fed’s cautious approach, as it navigates a wide range of economic scenarios and monitors inflation pressures, which could remain sticky. She reiterated that policy decisions will remain data-driven and suggested that the Fed has the flexibility to take its time when considering future rate cuts. He declined to comment on the policies of the incoming administration, focusing instead on the broader economic picture.

The US dollar was lower versus all the major currencies with the exception of the CAD. The CAD was the strongest of the major currencies. A snapshot of the changes of the major currencies verse the US dollar shows:

• EUR -0.42%
• JPY -0.16%
• GBP -0.32%
• CHF -0.44%
• CAD +0.33%
• AUD -0.13%
• NZD -0.30%

For the trading week, the USD was mixed vs the major currencies

• EUR +1.08%
• JPY -0.34%
• GBP +1.21%
• CHF +0.71%
• CAD +0.22%
• AUD unchanged
• NZD +0.28%

next week, the US and Canadian jobs report will be released on Friday. US nonfarm payrolls expected to show a gain of 154K versus 227K last month. The unemployment rate is expected to remain steady or 4.2%. Can unemployment rate is also expected to remain unchanged on the month (at 6.8%), with the employment change of +24.5 K versus 50.5 K last month.

Other data for the week includes the

• ISM services PMI on Tuesday. Expectations are 53.2 versus 52.1
• JOLTS job openings are expected to rise modestly to 7.77M from 7.74 million
• ADP Non farm employee change is expected at 131K versus 146K last month.
• FOMC meeting minutes will be released at 2 PM on Wednesday. The Fed at the last meeting decreased rates by 25 basis points but also forecast 2 rate cuts in 2025 versus 4 rate cuts in its previous estimate from September.

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

Well this is very interesting.

A judge denied a bid to dismiss the conviction due to his election win and told him to appear (in person or virtually) for sentencing on January 10 (next Friday).

This will be an interesting one for legal experts.

Update: The judge says he is not inclined to impose any jail sentence on Trump.

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

House Speaker Mike Johnson and 2 of the “other” votes have returned to the floor.

Norman has switched his vote to Johnson and Self has switched to Johnson as well.

That takes Rep Johnson to the 218 threshold on the first vote. He will retain the Speaker of the House position..

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

The major US stock indices are not been impacted by the voting for the Speaker of the House. The major indices are trading to new session highs in the currency hourly bar.

• Dow industrial average is up 333 points or 0.79% at 42726. For the week, the index is down -0.62% currently
• S&P index is up 73.73 points or 1.27% at 5944. For the trading week currently, the index is down -0.48%
• NASDAQ index is up 330. points or 1.71% at 19612. For the trading week the index is down -0.56%

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

With 3 voting for “Others”, current House Speaker Johnson came up 2 votes shy of the 216 needed to secure the Speaker position.

There will apparently be a 2nd vote shortly.

Voting for “others”?

• Rep Massie (Kentucky)
• Rep Ralph Norman (South Carolina)
• Rep Keith Self (Texas)

Massie has said that he would rather pull out his finger nails before voting for Johnson. That leaves it up to Rep Norman (from SC) and Rep Keith Self (Texas) to switch to Johnson.

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

Things are not looking good for the Speaker of the House Johnson on the first vote. Three have voted for “Others”. Johnson could only afford 1 “other” vote assuming members vote along party lines.

What next?

There can be a 2nd vote taken or they can go back and try to solicit support from those who voted Nay.Voting for “others”?

• Rep Massie
• Rep Ralph Noman

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

The weekly Baker Hughes rig count shows:

• Oil rigs -1 at 482
• Gas rigs +1 at 103
• Total rigs unchanged at 589

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