General Market Analysis – 12/12/24

US Tech Rallies After Inflation Numbers – Nasdaq up 1.8%

US Tech Stocks surged higher in trading yesterday with the Nasdaq notching up another record high after inflation data came in on expectations, all but locking in a rate cut from the Fed next week. The Nasdaq powered to a new high, closing up 1.76% on the day, followed by the S&P which added 0.82% whilst the Dow lost ground, falling 0.22% by the close. The greenback continued to push higher, the DXY adding another 0.27% to close at 106.65, following US treasury yields which after an initial post data dip, rallied well, the 2-year finishing up 1 basis point at 4.153% and the benchmark 10-year gaining 4.7 basis points to 4.273%. Oil prices jumped higher after the EU announced further sanctions against Russian oil, Brent gaining 1.87% to $73.54 and WTI rising 2.46% to $70.28. Gold also continued its recent recovery as geopolitical concerns pushed it higher, closing the day up 0.91% at $2,718.19.

FX Traders Prepare for More Rate Cuts

With the exception of the resilient RBA, central banks are embracing interest rate easing cycles with gusto in the current environment and FX traders are preparing for more moves in currencies in the days and weeks ahead. The Bank of Canada has already delivered a 50-point cut this week and today we are expecting 25-points from both the Swiss National Bank and the European Central Bank with the Federal Reserve highly likely to follow suit next week after last night’s CPI data drop. With these cuts now largely priced in to currency levels, the volatility is likely to come with any change in guidance from the respective central banks in their statements and press conferences – as occurred with the RBA earlier in the week – and traders feel that updates in the next few days could set fresh trends as we move into the new year.

Hectic Trading Day Ahead for Markets

There is a raft of data and central bank calls scheduled in the sessions ahead today which should see volatility remain high. The Asian session kicks off with the focus squarely on Australian markets with the latest employment data due out early in the day, expectation is for 26k new jobs to have been added in November and the unemployment rate to grind up to 4.2%. The European session has major central bank calls from both the Swiss National Bank and the European Central Bank with cuts expected from both and the New York session see’s more inflation data released in the form of the PPI numbers as well as the weekly unemployment claims data release. All of the above have the propensity to push their respective markets hard and traders are expecting little respite as we progress through the day.

The post General Market Analysis – 12/12/24 first appeared on IC Markets | Official Blog.