Articles

• Major US stock indices close lower on the day led by the NASDAQ index
• Danish PM says Greenland is ‘not for sale’
• Fed’s Bostic:Inflation is expected to gradually approach the 2% target,but progress uneven
• Bitcoin moves to new lows and dips below the 200 hour MA
• US treasury sells $38 billion 10 year notes at a high yield of 4.680%
• Atlanta Fed GDPNow growth estimate for Q4 rises to 2.7% from 2.4%
• More from Pres. Elect Trump: Cannot assure military or economic coercion on Greenland
• Trump: Something will have to be done with Canada and Mexico on trade
• US set to sell 10-year notes at auction at highest yield in over a decade
• Stronger data sends the US dollar higher. What next technically?
• JOLTS job openings 8.098M vs 7770M estimate
• US December ISM services 54.1 vs 53.3 expected
• Gold climbs $25 as China continues to accumulate reserves
• Canada November trade balance -$0.32B vs -$0.90B expected
• US international trade balance for November $-78.2 billion versus $-78.0 billion estimate
• The kickstart video outlining the technicals driving the EURUSD, USDJPY & GBPUSD for Jan 7
• Forexlive European FX news wrap: Swiss and Eurozone inflation meets expectations

Markets Summary

The financial markets experienced a mixed day with significant moves across commodities, currencies, and equities. Here’s an overview:

Commodities:

• WTI Crude Oil rose $0.81 (+1.09%) to settle at $74.18, supported by steady demand signals.
• Gold gained $13.76 (+0.52%) to close at $2,649.69, reflecting safe-haven buying amid market volatility.
• Silver edged up $0.08 (+0.29%) to $30.21.
• Bitcoin experienced a sharp decline, tumbling over $5,400 to $96,841 after hitting a high of $102,760, as investors took profits following recent rallies.

Currencies:The U.S. Dollar strengthened broadly against major counterparts, buoyed by robust economic data. Gains were most notable against:

• Swiss Franc (CHF): +0.52%
• Euro (EUR): +0.47%
• More modest gains were recorded versus the Australian Dollar (AUD): +0.19% and New Zealand Dollar (NZD): +0.18%.

This upward momentum for the dollar was driven by stronger-than-expected U.S. economic indicators, including the ISM Non-Manufacturing Index, which rose to 54.1 from 52.1, and the JOLTS Job Openings, which increased to 8.098 million, surpassing forecasts of 7.7 million. Treasury yields moved higher in response, with the 10-year yield climbing to 4.689% (+7.3 bps), reflecting investor expectations of prolonged economic resilience.

Federal Reserve Commentary:Fed official Thomas Barkin highlighted the need for businesses to adapt to changing tariffs and reaffirmed the central bank’s commitment to the 2% inflation target. Barkin also indicated that price pressures remain elevated, suggesting that policy tightening may need to persist.

The US Treasury auctioned $38B of 10 year notes with average demand

Equities:U.S. stock indices tumbled after two consecutive days of gains, led by a sharp pullback in tech stocks:

• Dow Jones: -0.42%
• S&P 500: -1.11%
• NASDAQ Composite: -1.89%
• Russell 2000: -0.74%

Shares of Nvidia plunged 6.22%, reversing earlier gains after hitting a record intraday high following CEO Jensen Huang’s keynote at CES 2025. The tech sell-off also saw significant declines in other high-growth stocks, with MicroStrategy falling 9.94% and Palantir dropping 7.81%.

Pres. elect Trump held a press conference at Mar a Lago.In addition to announcing a $20B investment to build new data centers by Billionaire Hussain Sajwani the Chairman of Damac Properties, the Pres. elect commented on a number of different topics

• Interest rates are too high
• The Biden ban on offshore oil and gas drilling will be reversed
• Something will have to be done with Canada and Mexico trade. Says we don;t need cars or milk and oil
• When asked for assurance that he will not us military or economic coercion as he tries to gain control over Greenland, said he cannot assure of either of those two.
• Calls Greenland essential for national security
• Could consider tariffs on Denmark over Greenland if they don’t give up Greenland.
• Thinks Meta has come a long way
• Says he is ok with spending cuts. Wants to see an extension of the debt ceiling.

Overall Insight:The day’s market action reflected a complex interplay of stronger U.S. economic data, rising yields, and profit-taking in tech stocks. With robust dollar strength and elevated volatility in equities, traders are keeping a close eye on upcoming economic reports and Fed guidance.

Tomorrow the lead-up to the US non-farm jobs report on Friday will continue with the ADP Non-Farm employment report due at 8:15 AM ET. The expectation is for 139K vs 146K last month. The weekly unemployment claims will be released a day early as a result of the day of mourning for Pres. Carter. The expectation is for 214K vs 211K last week. The US stock market will be closed on Thursday as well.

Fed’s Waller will speak at 8:30 AM ET, and the minutes of the Fed December meeting (bearish cut of 25 basis points) will be released at 2 PM ET.

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

more to come

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Expectations I had seen centred on:

• Headline crude -0.2 mn barrels
• Distillates +0.6 mn bbls
• Gasoline +1.5 mn

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This data point is from a privately-conducted survey by the American Petroleum Institute (API).

• It’s a survey of oil storage facilities and companies
• The official report is due Wednesday morning US time.

The two reports are quite different.The official government data comes from the US Energy Information Administration (EIA)

• Its based on data from the Department of Energy and other government agencies
• Whereas information on total crude oil storage levels and variations from the previous week’s levels are both provided by the API report, the EIA report also provides statistics on inputs and outputs from refineries, as well as other significant indicators of the status of the oil market, and storage levels for various grades of crude oil, such as light, medium, and heavy.
• the EIA report is held to be more accurate and comprehensive than the survey from the API

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

The item of interest today is the November monthly CPI reading from Australia. The quarterly CPI remains the gold standard for understanding inflation in Australia due to its comprehensiveness, stability, and historical consistency. Meanwhile, the monthly CPI provides valuable interim insights but is seen as a supplementary tool rather than a primary benchmark. the next quarterly reading is due on Wednesday 29 January at 11.30 am Sydney time (0030 GMT and 1930 US Eastern time on Tuesday the 28th). I’ve stuck in more information below, if you’d like it.

Taking a look at recent inflation data.

• September Quarter 2024:

  • Quarterly Increase: The CPI rose by 0.2% in this quarter.
  • Annual Inflation: The CPI increased by 2.8% over the twelve months to September 2024, marking the first time since 2021 that annual inflation has fallen within the Reserve Bank of Australia’s (RBA) target range of 2–3%.

• Trimmed Mean Inflation:

  • This measure of underlying inflation rose by 0.8% in the quarter, with the annual rate decreasing to 3.5% from 4.0% in the previous quarter, indicating persistent core inflation pressures.

Implications for Monetary Policy

• Despite the headline inflation rate returning to the target range, the RBA is cautious due to the “sticky” nature of core inflation, which remains above the target.
• As a result, the RBA has maintained the cash rate at 4.35%, emphasizing the need for sustained evidence of inflation aligning with the target before considering rate cuts.

• Market Expectations:

  • Financial markets have adjusted their expectations, now anticipating potential rate cuts in early 2025, contingent upon continued favourable inflation data.

While the decline in headline inflation to within the RBA’s target range is a positive development, the persistence of elevated core inflation suggests that the RBA will likely maintain its current monetary policy stance until there is more consistent evidence of inflation sustainably aligning with its objectives.

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

***

Australian Monthly CPI Data

• The monthly CPI indicator was introduced in October 2022 as a complementary measure to the long-established quarterly CPI.
• It provides a more frequent snapshot of inflation trends in Australia by tracking price movements across selected goods and services categories each month.
• However, the monthly CPI is considered an “experimental” series and has limitations:
  • It covers about 62–70% of the items in the quarterly CPI basket, meaning some categories are excluded, such as services with less frequent price changes (e.g., education and health).
  • It is subject to revisions, especially as more data becomes available or adjustments are made to seasonal factors.
  • Seasonal adjustment processes can create some volatility and reduce interpretability in the short term.

Why Quarterly CPI Data Is More Relevant

1. Comprehensive Coverage:

   • The quarterly CPI encompasses the entire basket of goods and services. This comprehensive view ensures that categories with less frequent price changes are captured.
   • For example, items like school fees (updated annually) or insurance premiums might be omitted or underrepresented in the monthly data.

2. Stability and Accuracy:

   • Quarterly data is less volatile because it aggregates price movements over three months, smoothing out short-term fluctuations.
   • It’s not subject to the same degree of revision as the experimental monthly indicator.

3. Policy and Decision-Making:

   • The Reserve Bank of Australia (RBA) relies heavily on quarterly CPI data for its monetary policy decisions, such as setting interest rates, because of its stability and accuracy.
   • Quarterly data aligns with international practices, making it easier to compare Australia’s inflation trends with those of other countries.

4. Economic Patterns:

   • Australia has a relatively small economy with distinct seasonal patterns in pricing, which the quarterly data captures more effectively. For instance, price changes in food, education, and holidays often align with specific times of the year.

How Monthly CPI Fits In

• The monthly CPI is useful for tracking inflation trends in near real-time, especially in volatile economic conditions.
• It complements the quarterly data by providing early signals of inflationary pressures, allowing policymakers and analysts to respond more quickly if needed.
• However, it is generally viewed as a preliminary indicator rather than a standalone measure for policy or long-term analysis.

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

The major U.S. stock indices ended the day with significant declines, with broader indices bearing the brunt of the selloff, led by the NASDAQ.

Nvidia shares dropped 6.22%, retreating sharply after hitting a record intraday high shortly after the open. Other notable losses included:

• MicroStrategy: Down 9.94%
• Palantir: Down 7.81%
• Shopify: Down 6.50%
• Super Micro Computer: Down 5.68%

These declines highlight a challenging session for tech and growth-focused stocks.

A snapshot of the closing levels shows:

• Dow Jones Industrial Average: Down 178.20 points (-0.42%) at 42,528.36
• S&P 500 Index: Down 66.35 points (-1.11%) at 5,909.03
• NASDAQ Composite: Down 375.30 points (-1.89%) at 19,489.68
• Russell 2000 (Small-Cap Index): Down 16.84 points (-0.74%) at 249.80

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

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

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

Trump today again talked about the US taking over Greenland and also said he wouldn’t rule out force to do it.

“This is a deal that must happen,” Trump earlier wrote on Truth Social. Last month he also said “ownership and control of Greenland is an absolute necessity”.

The Danish PM said Greenland is ‘not for sale’ with Donald Jr visiting the world’s largest island today.

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

Major US stock indices of continuing in their tumble with the NASDAQ leading the declines.

A snapshot of the market currently shows:

• Dow and industrial average -0.63%
• S&P index -1.24%
• NASDAQ index -2.01%.

The small-cap Russell 2000 is down -1.02%.

The NASDAQ index is moving away from it’s 200-hour moving average of 19639.85 after breaking below earlier today retracing back to the moving average level and finding willing sellers (green line on the chart below).

Nvidia shares are currently down -5.93%

The US 10 year yield has reached a high of 4.699%. It is currently trading just below that at 4.687%. That is up from it September low of 4.60%. The next target comes at the April 25 high yield of 4.74%.

Risk sentiment is also being reflected in the price of bitcoin. It is currently down $6000 or -5.88% and $96,279

Meanwhile, crude oil is moving higher . The price is settling at $74.25, up $0.69 or 0.94%.

Despite a rise in the US dollar, the price of gold is also higher asrisk to safety flows seem to dominate. The price is up $11.62 or 0.44% at $2647.80.

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

The euro looks to have traced out a double top at 1.0440 as the US dollar strengthens today. The pair is down 36 bps to 1.0354 and briefly touched below 1.0350 today.

The major round of selling today came after strong JOLTS numbers and a slightly upbeat ISM services report with hot ‘prices paid’ numbers. The euro bounced from 1.0360 initially but strong US dollar bids have continued as Treasury yields break to the highest since April.

On January 1, the euro hit the lowest since 2022 at 1.0224 but it’s since rebounded on hotter German inflation and mixed comments from Trump about tariffs. The latter is going to be a key driver in how the euro reacts this year.

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

The US Treasury sold $38 billion of 10 year notes. Details of the auction showed:

• High yield 4.680%
• WI level at the time of the auction 4.678%
• Tail +0.2 basis points vs six-month average of -0.1 basis points
• Bid to cover 2.53X vs. six-month average of 2.55X
• DIrects (a measure of domestic demand) 23.0% vs. six-month average of 17.0%
• Indirects (international demand) 61.4% vs six-month average of 69.9%
• Dealers 15.6% vs six-month average of 13.1%

AUCTION GRADE: C-

Result summary: The 10 year note auction had a modest 0.2 basis points tail versus -0.1 basis point six-month average. The bid to cover was near the average as well. What was disappointing is that the dealers were saddled with 15.6% versus 13.1% average. The international demand was well below the six-month average at 61.4% versus 69.9%. However, domestic demand made up for most of the shortfall.

Overall, the grade was a little less than average

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

The US Treasury sold $38 billion of 10 year notes. Details of the auction showed:

• High yield 4.680%
• WI level at the time of the auction 4.678%
• Tail +0.2 basis points vs six-month average of -0.1 basis points
• Bid to cover 2.53X vs. six-month average of 2.55X
• DIrects (a measure of domestic demand) 23.0% vs. six-month average of 17.0%
• Indirects (international demand) 61.4% vs six-month average of 69.9%
• Dealers 15.6% vs six-month average of 13.1%

AUCTION GRADE: C-

Result summary: The 10 year note auction had a modest 0.2 basis points tail versus -0.1 basis point six-month average. The bid to cover was near the average as well. What was disappointing is that the dealers were saddled with 15.6% versus 13.1% average. The international demand was well below the six-month average at 61.4% versus 69.9%. However, domestic demand made up for most of the shortfall.

Overall, the grade was a little less than average

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

U.S. Treasury to auction $38 billion of 10 year notes at the top of the hour. The six-month averages of the major components shows:

• Bid to cover 2.55X
• Tail -0.1 basis points
• Dealers 13.1%
• Directs 17.0%
• Indirects 69.9%

The last auction high yield came in at 4.235%. The current 10 year yield is currently much higher at 4.678%

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

The Atlanta Fed GDPNow growth estimate for Q4 rises to 2.7 from 2.4% previously.

In their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2024 is 2.7 percent on January 7, up from 2.4 percent on January 3. After recent releases from the US Census Bureau, the Institute for Supply Management, and the US Bureau of Economic Analysis, the nowcasts of fourth-quarter real personal consumption expenditures growth and fourth-quarter real gross private domestic investment growth increased from 3.0 percent and -0.9 percent, respectively, to 3.3 percent and -0.6 percent, while the nowcast of the contribution of net exports to fourth-quarter real GDP growth increased from 0.07 percentage points to 0.11 percentage points.

The next GDPNow update is Thursday, January 9. Please see the “Release Dates” tab below for a list of upcoming releases.

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