The post Ex-Dividend 11/12/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.53%, Shanghai Composite up 1.22%, Hang Seng up 0.87% ASX down 0.36%
• Commodities : Gold at $2691.35 (0.14%), Silver at $32.4 (-0.18%), Brent Oil at $71.4 (-0.46%), WTI Oil at $67.7 (-0.49%)
• Rates : US 10-year yield at 4.193, UK 10-year yield at 4.2705, Germany 10-year yield at 2.1175

News & Data:

• (USD) Final Wholesale Inventories m/m 0.2% vs 0.2% expected

Markets Update:

China’s stock markets rose on Tuesday, with the CSI 300 index gaining 1.9% and Hong Kong’s Hang Seng index up 0.9%, driven by Beijing’s announcement of “more proactive” fiscal policies and “moderately” looser monetary measures for the upcoming year. These changes aim to stimulate domestic consumption and were revealed in an official statement on Monday evening, which had already propelled the Hang Seng nearly 3% higher.

Elsewhere in Asia, South Korea’s Kospi surged 2.2%, while the small-cap Kosdaq soared 5.3%, with investors monitoring political developments. Yonhap reported that opposition leader Lee Jae Myung committed to passing a scaled-down budget later in the day. Meanwhile, Japan’s Nikkei 225 and Topix rose 0.52% and 0.37%, respectively. However, Australia’s S&P/ASX 200 dipped 0.36% after the Reserve Bank of Australia maintained its benchmark rate at 4.35%.

In the U.S., Wall Street retreated on Monday ahead of critical inflation data. The S&P 500 fell 0.61% to 6,052.85, the Nasdaq lost 0.62% to 19,736.69, and the Dow Jones declined 0.54%, closing at 44,401.93. Technology stocks, including Nvidia and AMD, faced significant declines. Nvidia dropped 2.6% after facing an antitrust investigation in China, while AMD fell 5.6%. Tech giants Meta and Netflix also saw losses.

Upcoming Events: 

• 01:30 PM GMT – USD Revised Nonfarm Productivity q/q
• 01:30 PM GMT – USD Revised Unit Labor Costs q/q

The post Tuesday 10th December 2024: Asian Markets Rally Amid China’s Stimulus Plans first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 10 December 2024

What happened in the Asia session?

As widely expected, the Reserve Bank of Australia (RBA) kept its official cash rate on hold at 4.35%, in line with market forecasts, to mark the ninth consecutive pause. Underlying inflation remains too high with the annual inflation rate easing to just 2.8% YoY in the third quarter of 2023 – a reading that is still some way from the midpoint inflation target of 2.5%. The economic outlook remains uncertain but a range of indicators suggest that labour market conditions remain tight, adding further conviction to delay any potential rate cuts by the RBA. However, the rest of the statement tilted on the dovish side and raised the probability of the first cut in February next year. The Aussie fell under 0.6400 by midday Asia and could remain under pressure as the day progresses.

What does it mean for the Europe & US sessions?

The OPEC meetings, which usually take place twice a year, will commence today in Vienna where representatives from the 12 oil-rich nations will discuss a wide range of issues regarding energy markets and, most importantly, agree on oil production quotas for each member country. WTI oil fell under $68 by midday Asia but traders should brace themselves for higher volatility as the meetings come to a close.

The Dollar Index (DXY)

Key news events today

NFIB Small Business Index (11:00 am GMT)

What can we expect from DXY today?

The NFIB Small Business Index increased to 93.7 in October to mark the highest reading in three months but small business owners still faced unprecedented economic adversity. With the U.S. presidential elections concluding in early November, small business owners began to feel less uncertain about future business conditions. This improved sentiment is reflected in November’s forecast of 94.6 and a stronger-than-anticipated reading could bolster the dollar later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 17 to 18 December 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

NFIB Small Business Index (11:00 am GMT)

What can we expect from Gold today?

The NFIB Small Business Index increased to 93.7 in October to mark the highest reading in three months but small business owners still faced unprecedented economic adversity. With the U.S. presidential elections concluding in early November, small business owners began to feel less uncertain about future business conditions. This improved sentiment is reflected in November’s forecast of 94.6 and a stronger-than-anticipated reading could bolster the dollar and place downward pressure on gold prices later today.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

RBA Cash Rate Statement (3:30 am GMT)

RBA Press Conference (4:30 am GMT)

What can we expect from AUD today?

As widely expected, the Reserve Bank of Australia (RBA) kept its official cash rate on hold at 4.35%, in line with market forecasts, to mark the ninth consecutive pause. Underlying inflation remains too high with the annual inflation rate easing to just 2.8% YoY in the third quarter of 2023 – a reading that is still some way from the midpoint inflation target of 2.5%. The economic outlook remains uncertain but a range of indicators suggest that labour market conditions remain tight, adding further conviction to delay any potential rate cuts by the RBA. However, the rest of the statement tilted on the dovish side and raised the probability of the first cut in February next year. The Aussie fell under 0.6400 by midday Asia and could remain under pressure as the day progresses.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10th December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wages growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment. To date, longer term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 18 February 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi failed to climb above 0.5900 on Monday as it retreated away from this level to slide towards 0.5850 during the U.S. trading hours. This currency pair remains under pressure and continues to edge lower at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5800

Resistance: 0.5885

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some services sectors have continued to grow.
• Consistent with feedback from business visits, high frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to further ease monetary policy restraint.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Higher demand for the dollar lifted USD/JPY from 149.80 to an overnight high of 151.36. This currency pair remained elevated as Asian markets came online – these are the support and resistance levels for today.

Support: 151.15

Resistance: 152.20

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

As demand for the greenback picked up during the U.S. trading hours, the Euro reversed from 1.0595 to fall to an overnight low of 1.0545. This currency pair was floating around 1.0555 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.0480

Resistance: 1.0610

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

A weak franc kept USD/CHF above 0.8750 on Monday, trading within a relatively narrow range. This currency pair was hovering around 0.8780 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8750

Resistance: 0.8830

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable came within a whisker of 1.2800 overnight before retreating to slide lower. This currency pair was dipped under 1.2750 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.2715

Resistance: 1.2865

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie continues to face overhead pressure causing USD/CAD to remain elevated. This currency pair was rising towards 1.4180 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.4100

Resistance: 1.4200

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 11 December 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

OPEC Meetings (All Day)

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

The OPEC meetings, which usually take place twice a year, will commence today in Vienna where representatives from the 12 oil-rich nations will discuss a wide range of issues regarding energy markets and, most importantly, agree on oil production quotas for each member country. Crude oil prices retreated from Monday’s highs as WTI oil fell under the $68-mark on Monday. The API stockpiles registered a surprise inventory build last week and should markets receive a second successive week of higher storage levels, oil prices could face some headwinds later today.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 10 December 2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 106.57

Supporting reasons: Identified as an overlap resistance close to the 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 105.30
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once more.

1st resistance: 107.57
Supporting reasons: Identified as a swing high resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance. Additionally, the price is in a bullish ascending channel, indicating bullish momentum in the market.

Pivot: 1.0536

Supporting reasons: Identified as an overlap support, indicating a potential area where buying pressures could intensify.

1st support: 1.0454

Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once more.

1st resistance: 1.0787
Supporting reasons:  Identified as a pullback resistance close to the 61.8% Fibonacci retracement and the 100% Fibonacci projection, indicating a strong level of resistance.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance.

Pivot: 159.29

Supporting reasons: Identified as a pullback support, indicating a potential area where buying pressures could intensify.

1st support: 157.64

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 160.52
Supporting reasons: Identified as a pullback resistance close to the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Neutral

Overall momentum of the chart: Bearish

Price could potentially fluctuate between the 1st resistance and 1st support level.

1st support: 0.8268

Supporting reasons: Identified as a multi-swing low support, indicating a potential level where price could find support once more.

1st resistance: 0.830
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance. Additionally, the price is above the ascending trendline, indicating bullish momentum in the market.

Pivot: 1.2718

Supporting reasons: Identified as an overlap support, indicating a potential area where buying pressures could intensify.

1st support: 1.2613

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 1.2833
Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement and the 78.6% Fibonacci projection, indicating a strong level of resistance.

GBP/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 193.37

Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 190.37
Supporting reasons: Identified as an overlap support, indicating a key level where price could find support once more.

1st resistance: 195.64
Supporting reasons: Identified as a pullback resistance close to the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support.

Pivot: 0.8796

Supporting reasons: Identified as an overlap close to the 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8710
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 0.8855
Supporting reasons: Identified as an overlap resistance close to the 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 151.56
Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 148.78
Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once again.

1st resistance: 153.39
Supporting reasons: Identified as a pullback resistance close to 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 1.4178

Supporting reasons: Identified as a swing-high resistance, indicating a potential area where selling pressures could intensify. The presence of a bearish RSI divergence adds further significance to the possibility of an impending reversal.

1st support: 1.4089
Supporting reasons: Identified as an overlap support, indicating a key level where price could find support once more.

1st resistance: 1.4231
Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.6407

Supporting reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 0.6373
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once again.

1st resistance: 0.6462
Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.5836

Supporting reasons: Identified as an overlap support that aligns with a 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 0.5809
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once more.

1st resistance: 0.5885
Supporting reasons: Identified as a multi-swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 44,082.42

Supporting reasons: Identified as an overlap support that aligns with a confluence of Fibonacci levels i.e. a 50% retracement and a 61.8% projection, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 43,819.07

Supporting reasons: Identified as an overlap support that aligns with a confluence of Fibonacci levels i.e. a 61.8% retracement and a 78.6% projection, indicating a potential level where price could find support once again.

1st resistance: 44,527.60

Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 20,399.50
Supporting reasons: Identified as a swing-high resistance that aligns with a 61.8% Fibonacci projection, indicating a potential area where selling pressures could intensify.

1st support: 19,688.27

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a key level where price could find support.

1st resistance: 20,900.35
Supporting reasons: Identified as a resistance that aligns with a 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 6,026.60

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 5,968.70

Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 6,099.30
Supporting reasons: Identified as a swing-high resistance that aligns with the all-time high, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 93,874.62

Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 91,413.66
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where price could find support once again.

1st resistance: 101,191.22
Supporting reasons: Identified as a pullback resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 3,546.17

Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 3,288.01
Supporting reasons: Identified as a multi-swing-low support that aligns close to a 78.6% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 3,849.69
Supporting reasons:  Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 68.64
Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support:  66.97
Supporting reasons: Identified as a multi-swing-low support that aligns close to a 61.8% Fibonacci projection, indicating a key level where price could find support once again.

1st resistance: 69.77
Supporting reasons: Identified as a pullback resistance that aligns close to a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 2683.34
Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 2613.53

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 2712.99
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

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The post Tuesday 10th December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 10 December 2024

What happened in the U.S. session?

It was a barren calendar during the U.S. trading hours as the dollar index (DXY) initially drifted lower towards 105.80 before reversing to climb above 106 to hit an overnight high of 106.21 while spot prices for gold retreated from Monday’s peak of $2,676.39/oz, falling towards $2,655/oz. Crude oil prices headed south as well with WTI oil falling under the $68-mark by the end of this session.

What does it mean for the Asia Session?

The Reserve Bank of Australia (RBA) is widely expected to maintain its cash rate at 4.35% today, a move that would mark the ninth consecutive pause. Although the monthly CPI indicator fell to 2.1% YoY in September and October, the annual inflation rate eased to just 2.8% YoY in the third quarter of 2023 – a reading that is still some way from the midpoint inflation target of 2.5%. Traders will also be keeping a close watch on the press conference by RBA Governor Michele Bullock where her remarks and responses could inject higher volatility for the Aussie during the Asia session.

The Dollar Index (DXY)

Key news events today

NFIB Small Business Index (11:00 am GMT)

What can we expect from DXY today?

The NFIB Small Business Index increased to 93.7 in October to mark the highest reading in three months but small business owners still faced unprecedented economic adversity. With the U.S. presidential elections concluding in early November, small business owners began to feel less uncertain about future business conditions. This improved sentiment is reflected in November’s forecast of 94.6 and a stronger-than-anticipated reading could bolster the dollar later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 17 to 18 December 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

NFIB Small Business Index (11:00 am GMT)

What can we expect from Gold today?

The NFIB Small Business Index increased to 93.7 in October to mark the highest reading in three months but small business owners still faced unprecedented economic adversity. With the U.S. presidential elections concluding in early November, small business owners began to feel less uncertain about future business conditions. This improved sentiment is reflected in November’s forecast of 94.6 and a stronger-than-anticipated reading could bolster the dollar and place downward pressure on gold prices later today.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

RBA Cash Rate Statement (3:30 am GMT)

RBA Press Conference (4:30 am GMT)

What can we expect from AUD today?

The Reserve Bank of Australia (RBA) is widely expected to maintain its cash rate at 4.35% today, a move that would mark the ninth consecutive pause. Although the monthly CPI indicator fell to 2.1% YoY in September and October, the annual inflation rate eased to just 2.8% YoY in the third quarter of 2023 – a reading that is still some way from the midpoint inflation target of 2.5%. Traders will also be keeping a close watch on the press conference by RBA Governor Michele Bullock where her remarks and responses could inject higher volatility for the Aussie during the Asia session.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 5th November, marking the eighth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but the forecasts published in today’s Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026.
• Headline inflation was 2.8% over the year to the September quarter, down from 3.8% over the year to the June quarter; this was as expected due to declines in fuel and electricity prices in the September quarter.
• However, this decline reflects a temporary cost of living relief; abstracting from these effects, underlying inflation (as represented by the trimmed mean) was 3.5% over the year to the September quarter and is still some way from the 2.5% midpoint of the inflation target.
• Growth in output has been weak as past declines in real disposable incomes and the ongoing effect of restrictive financial conditions continue to weigh on household consumption, particularly discretionary consumption.
• However, growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, has remained more resilient.
• A range of indicators suggest that labour market conditions remain tight, and while conditions have been easing gradually, some indicators have recently stabilised.
• Employment grew strongly over the three months to September, by an average of 0.4% per month but the unemployment rate was 4.1% in September, up from the trough of 3.5% in late 2022.
• While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high while the November SMP forecasts suggest that it will be some time yet before inflation is sustainably in the target range and approaching the midpoint.
• This reinforces the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and it will continue to rely upon the data and the evolving assessment of risks to guide its decisions.
• The next meeting is on 10 December 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi failed to climb above 0.5900 on Monday as it retreated away from this level to slide towards 0.5850 during the U.S. trading hours. This currency pair remains under pressure and continues to edge lower at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5800

Resistance: 0.5885

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some services sectors have continued to grow.
• Consistent with feedback from business visits, high frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to further ease monetary policy restraint.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Higher demand for the dollar lifted USD/JPY from 149.80 to an overnight high of 151.36. This currency pair remained elevated as Asian markets came online – these are the support and resistance levels for today.

Support: 151.15

Resistance: 152.20

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

As demand for the greenback picked up during the U.S. trading hours, the Euro reversed from 1.0595 to fall to an overnight low of 1.0545. This currency pair was floating around 1.0555 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.0480

Resistance: 1.0610

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

A weak franc kept USD/CHF above 0.8750 on Monday, trading within a relatively narrow range. This currency pair was hovering around 0.8780 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8750

Resistance: 0.8830

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable came within a whisker of 1.2800 overnight before retreating to slide lower. This currency pair was dipped under 1.2750 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.2715

Resistance: 1.2865

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie continues to face overhead pressure causing USD/CAD to remain elevated. This currency pair was rising towards 1.4180 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.4100

Resistance: 1.4200

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 11 December 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

OPEC Meetings (All Day)

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

The OPEC meetings, which usually take place twice a year, will commence today in Vienna where representatives from the 12 oil-rich nations will discuss a wide range of issues regarding energy markets and, most importantly, agree on oil production quotas for each member country. Crude oil prices retreated from Monday’s highs as WTI oil fell under the $68-mark on Monday. The API stockpiles registered a surprise inventory build last week and should markets receive a second successive week of higher storage levels, oil prices could face some headwinds later today.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 10 December 2024 first appeared on IC Markets | Official Blog.

US Stocks Fall on Chinese Moves – S&P Down 0.6%

US stocks fell in trading yesterday as the trade war between the US and China escalated. The Dow Jones dropped by 0.54%, the Nasdaq by 0.62%, and the S&P ended its record-breaking run to close down 0.64%. Treasury yields moved higher as traders awaited upcoming inflation data, with the 2-year yield rising by 1.6 basis points to 4.120% and the 10-year yield gaining 4 basis points to 4.193%. The dollar strengthened amid choppy trading, with the DXY rising by 0.2% to 106.20. Oil prices increased on the back of proposed Chinese stimulus, with Brent up 1.14% to $71.92 and WTI up 1.38% to $68.13. Gold also rallied, breaking out of recent ranges to close 0.96% higher at $2,658.63 by the New York close.

Trade War Heats Up Markets

With over a month remaining before Donald Trump assumes office, the anticipated trade war between the US and China is already intensifying. Chinese stocks and bonds rallied yesterday following an announcement by the Chinese government indicating changes in monetary policy and additional market stimulus. China also retaliated against the US by cutting drone supplies to the US and Europe, a move impacting Ukraine’s defence, and by opening an investigation into chip giant Nvidia. Investor concerns regarding global economic growth are rising as these developments unfold before Trump’s administration even takes office. Traders now anticipate increased market volatility as the situation evolves.

Central Banks in Focus for Traders Today

It is a relatively quiet day on the macroeconomic calendar, although the Reserve Bank of Australia will make its latest interest rate decision during the Asian session. The bank is widely expected to keep rates on hold at 4.35%. However, traders will closely monitor the statement and press conference as the RBA addresses inflation concerns and slowing growth. There is little else on the calendar for the rest of the trading day, but traders expect continued volatility driven by geopolitical updates, which are arriving on a near-daily basis. Oil markets will also be watching for any fresh updates from the ongoing OPEC conference.

The post General Market Analysis – 10/12/24 first appeared on IC Markets | Official Blog.

The Reserve Bank of Australia concludes its final meeting for 2024 on Tuesday, with the vast majority of market participants expecting it to keep rates on hold at 4.35%. The market’s interest and the probable volatility for the Aussie dollar are likely to stem from the board’s message in its statement, followed by Michele Bullock’s comments during the press conference an hour later.

Last week’s GDP numbers indicated that the Australian economy is slowing, leading some traders to anticipate a more dovish tone from the bank. However, most board members, particularly the Governor, have recently remained resolutely focused on combating inflation.

The Aussie is currently trading just above its annual low. Any more dovish-than-expected surprise could push it through trendline support and the annual low, into fresh downside ranges, with the 2022 low of 0.6169 as the next target. Conversely, a less dovish tone could trigger a relief rally for the pair, though traders expect any rallies to be limited given the recent trend and the prevailing appetite for the US dollar.

Resistance Levels:

• Resistance 2: 0.6884 – Long-Term Trendline Resistance
• Resistance 1: 0.6624 – 200-Day Moving Average

Support Levels:

• Support 1: 0.6346 – 2024 Low
• Support 2: 0.6169 – 2022 Low

The post Trade the Aussie Dollar on the RBA Rate Decision first appeared on IC Markets | Official Blog.

The post Ex-Dividend 10/12/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.07%, Shanghai Composite down 0.14%, Hang Seng down 0.57% ASX up 0.02%
• Commodities : Gold at $2659.35 (-0.14%), Silver at $31.4 (-0.48%), Brent Oil at $71.4 (0.46%), WTI Oil at $67.27 (0.49%)
• Rates : US 10-year yield at 4.143, UK 10-year yield at 4.275, Germany 10-year yield at 2.1125

News & Data:

• (USD) Non – Farm Employment Change 227K vs 218K expected
• (USD) Unemployment Rate 4.2% vs 4.1% expected
• (CAD) Employment Change 50.5K vs 24.7K expected
• (CAD) Unemployment Rate 6.8% vs 6.6% expected

Markets Update:

South Korea’s Kospi index fell over 2% on Monday as political turmoil continued to weigh on investor sentiment following President Yoon Suk Yeol’s survival of an impeachment vote over the weekend. The benchmark Kospi dropped 2.5%, while the Kosdaq slid 4.4%, reflecting heightened concerns over the fallout from Yoon’s brief declaration of martial law. Adding to the tension, prosecutors have reportedly named Yoon as a subject of a criminal investigation for potential charges of treason and abuse of power.

The impeachment vote, led by opposition parties, was boycotted by Yoon’s People Power Party. However, the party’s leader has suggested that Yoon may consider stepping down, signaling further uncertainty in the political landscape. This development has fueled apprehension in the markets, with investors closely watching how the crisis unfolds.

Elsewhere in Asia-Pacific markets, performance was mixed. Japan’s Nikkei 225 inched up 0.1%, while the Topix added 0.2%, supported by a positive revision to Japan’s third-quarter GDP growth, now estimated at 0.3% quarter-on-quarter. Meanwhile, Hong Kong’s Hang Seng index dropped 0.6%, and mainland China’s CSI 300 declined 0.5%. China’s consumer price growth in November missed expectations, rising only 0.2% year-on-year compared to 0.3% in October, according to the National Bureau of Statistics.

In the U.S., markets ended last week on a high note. The S&P 500 gained 0.25% to 6,090.27, and the Nasdaq Composite climbed 0.81% to 19,859.77, bolstered by gains in Tesla, Meta Platforms, and Amazon. However, the Dow Jones Industrial Average dipped 0.28%, closing at 44,642.52. Both the S&P 500 and Nasdaq achieved their third consecutive week of gains, rising 0.96% and 3.34%, respectively, despite the Dow slipping 0.6% over the same period.

Upcoming Events: 

• 03:00 PM GMT – USD Final Wholesale Inventories m/m

The post Monday 9th December 2024: Markets React to South Korea’s Political Unrest  first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 9 December 2024

What happened in the Asia session?

China released its latest inflation figures for both the consumer and producer sectors this morning where annual CPI unexpectedly edged lower to 0.2% in November 2024 from 0.3% in the previous month. Not only did this latest print miss market forecasts of 0.5%, but it also marked the lowest figure since June this year, highlighting mounting deflation risks in the country despite recent stimulus measures from the government and a supportive monetary policy stance by the central bank. On the other hand, producer prices fell 2.5% YoY marking a softer decline than market expectations of a 2.8% drop. This reading marked the 26th consecutive month of producer deflation, casting doubts of a rebound in economic growth for the world’s second largest economy. Crude oil prices remained muted with WTI oil floating around $67.50 per barrel during this session.

What does it mean for the Europe & US sessions?

The Sentix Investor Confidence index for the eurozone rose slightly at the beginning of November to -12.8 points. However, the German economy remains the problem child for the entire eurozone and although the estimate of -12.4 for the month of December points to a third consecutive month of improvement, the outlook for this economic region continues to remain bleak, putting further downward pressure on the Euro.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

As Asian markets digest the latest BLS employment report, the DXY rose above 106 and this index should continue its ascent as the day progresses – these are the support and resistance levels for today.

Support: 104.50

Resistance: 107.50.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 17 to 18 December 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

Gold suffered its second successive week of decline as spot prices tumbled under $2,650/oz to close at $2,633/oz on Friday. This precious metal hovered around $2,650/oz at the beginning of the Asia session and could edge higher today – these are the support and resistance levels for today.

Support: 2,560.00

Resistance: 2,715.00

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie dived under 0.6400 on the back of stronger-than-expected NFPs before closing at 0.6387 on Friday. This currency pair remained capped under 0.6400 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6350

Resistance: 0.6450

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 5th November, marking the eighth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but the forecasts published in today’s Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026.
• Headline inflation was 2.8% over the year to the September quarter, down from 3.8% over the year to the June quarter; this was as expected due to declines in fuel and electricity prices in the September quarter.
• However, this decline reflects a temporary cost of living relief; abstracting from these effects, underlying inflation (as represented by the trimmed mean) was 3.5% over the year to the September quarter and is still some way from the 2.5% midpoint of the inflation target.
• Growth in output has been weak as past declines in real disposable incomes and the ongoing effect of restrictive financial conditions continue to weigh on household consumption, particularly discretionary consumption.
• However, growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, has remained more resilient.
• A range of indicators suggest that labour market conditions remain tight, and while conditions have been easing gradually, some indicators have recently stabilised.
• Employment grew strongly over the three months to September, by an average of 0.4% per month but the unemployment rate was 4.1% in September, up from the trough of 3.5% in late 2022.
• While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high while the November SMP forecasts suggest that it will be some time yet before inflation is sustainably in the target range and approaching the midpoint.
• This reinforces the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and it will continue to rely upon the data and the evolving assessment of risks to guide its decisions.
• The next meeting is on 10 December 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Better-than-expected NFPs drove the Kiwi under 0.5850 before closing at 0.5821 on Friday. This currency pair gapped higher to open at 0.5833 but overhead pressures remain intact – these are the support and resistance levels for today.

Support: 0.5800

Resistance: 0.5885

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some services sectors have continued to grow.
• Consistent with feedback from business visits, high frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to further ease monetary policy restraint.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite stronger-than-expected NFPs on Friday, USD/JPY remained capped under the 151-level before closing at 149.96 last week. This currency pair gapped slightly lower to open at 148.85 and it continued to slide lower as Asian markets came online – these are the support and resistance levels for today.

Support: 149.00

Resistance: 151.50

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

Sentix Investor Confidence (9:30 am GMT)

What can we expect from EUR today?

The Sentix Investor Confidence index for the eurozone rose slightly at the beginning of November to -12.8 points. However, the German economy remains the problem child for the entire eurozone and although the estimate of -12.4 for the month of December points to a third consecutive month of improvement, the outlook for this economic region continues to remain bleak, putting further downward pressure on the Euro.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Robust demand for the dollar drove USD/CHF towards the 0.8800-level on Friday. This currency pair was rising towards 0.8800 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8700

Resistance: 0.8800

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Better-than-expected NFPs triggered higher demand for the greenback causing Cable to reverse off Friday’s high of 1.2811 to plunge under 1.2750 before closing at 1.2741. This currency pair gapped slightly lower to open at 1.2728 but it filled this gap as Asian markets came online – these are the support and resistance levels for today.

Support: 1.2640

Resistance: 1.2800

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Stronger-than-expected NFPs triggered higher demand for the dollar causing USD/CAD to surge past the 1.4100-level last Friday before closing at 1.4158. This currency pair gapped lower to open at 1.4152 before filling it at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.3950

Resistance: 1.4200

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 11 December 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

China CPI & PPI (1:30 am GMT)

What can we expect from Oil today?

Crude oil prices declined for the second consecutive week with WTI closing at $67.20 per barrel on Friday. This benchmark gapped slightly lower to open at $67.15 before filling it as Asian markets came online. China released its latest inflation figures for both the consumer and producer sectors this morning where annual CPI unexpectedly edged lower to 0.2% in November 2024 from 0.3% in the previous month. Not only did this latest print miss market forecasts of 0.5%, but it also marked the lowest figure since June this year, highlighting mounting deflation risks in the country despite recent stimulus measures from the government and a supportive monetary policy stance by the central bank. On the other hand, producer prices fell 2.5% YoY marking a softer decline than market expectations of a 2.8% drop. This reading marked the 26th consecutive month of producer deflation, casting doubts of a rebound in economic growth for the world’s second largest economy. Crude oil prices remained muted with WTI oil floating around $67.50 per barrel during this session.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 9 December 2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 106.92

Supporting reasons: Identified as an overlap resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 105.15
Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 108.18
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support 

Pivot: 1.0787

Supporting reasons: Identified as an overlap resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.0417

Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once more.

1st resistance: 1.0787
Supporting reasons: Identified as a pullback resistance close to 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 161.83

Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 155.99

Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once more.

1st resistance: 166.54
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 0.8318

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.8267

Supporting reasons: Identified as a multi-swing low support, indicating a potential level where price could find support once more.

1st resistance: 0.8318
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support 

Pivot: 1.2811

Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.2613

Supporting reasons: Identified as an overlap support that aligns with 61.8% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 1.3039
Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 193.45

Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 188.32
Supporting reasons: Identified as an overlap support, indicating a key level where price could find support once more.

1st resistance: 199.61
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 0.8952

Supporting reasons: Identified as an overlap, indicating a potential area where selling pressures could intensify.

1st support: 0.8725
Supporting reasons: Identified as an overlap support close to 38.2% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 0.9082
Supporting reasons: Identified as a pullback resistance close to 161.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 151.53
Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 146.77
Supporting reasons: Identified as a pullback support close to 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 156.01
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and pull back towards the 1st support.

Pivot: 1.4220

Supporting reasons: Identified as a multi-swing-high resistance that aligns with a 100% Fibonacci projection, indicating a potential area where selling pressures could intensify.

1st support: 1.4093
Supporting reasons: Identified as a pullback support, indicating a key level where price could find support.

1st resistance: 1.4355
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.6349

Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci projection, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 0.6294
Supporting reasons: Identified as a multi-swing-low support that aligns with a 100% Fibonacci projection, suggesting a key support area where price could find support once again.

1st resistance: 0.6448
Supporting reasons: Identified as an overlap resistance that aligns with a 23.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.5798
Supporting reasons: Identified as a swing-low support, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 0.5758
Supporting reasons: Identified as an overlap support, suggesting a key support area where price could find support once more.

1st resistance: 0.5913
Supporting reasons: Identified as a multi-swing-high resistance that aligns with a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 44,327.75

Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 43,308.85

Supporting reasons: Identified as an overlap support that aligns with a confluence of Fibonacci levels i.e. the 38.2% and 50% retracements, indicating a potential level where price could find support once again.

1st resistance: 45,042.77

Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish reversal off the pivot and pull back towards the 1st support.

Pivot: 20,460.08
Supporting reasons: Identified as a resistance that aligns with a 61.8% Fibonacci projection, indicating a potential area where selling pressures could intensify.

1st support: 19,681.50

Supporting reasons: Identified as a pullback support, indicating a key level where price could find support.

1st resistance: 20,906.46
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 6,009.00

Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 5,867.40

Supporting reasons: Identified as an overlap support that aligns with a confluence of Fibonacci levels i.e. the 23.6% and 61.8% retracements, indicating a potential level where price could find support once more.

1st resistance: 6,164.45
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 95,138.09

Supporting reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 91,855.25
Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 105,411.73
Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 3,745.38

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 3,535.07
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 4,032.94
Supporting reasons:  Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 66.22
Supporting reasons: Identified as a multi-swing-low support, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support:  61.98
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where price could find support once again.

1st resistance: 70.06
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 2713.21
Supporting reasons: Identified as an overlap resistance close to 78.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 2555.70

Supporting reasons: Identified as a swing low support close to 50% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 2790.33
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

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The post Monday 9th December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 9 December 2024

What happened in the U.S. session?

The Bureau of Labor Statistics (BLS) released its employment report for the month of November which showed the U.S. economy adding 227K jobs, marking a strong recovery from the upwardly revised gain from 12K to 36K in October. The latest non-farm payrolls (NFPs) also beat the market forecast of 218K as industries such as health care and social assistance; leisure and hospitality; and government led the rebound. However, the unemployment rate rose from 4.1% to 4.2%, in line with market expectations. The dollar index (DXY) initially dropped from 105.79 to as low as 105.42 before reversing sharply to surge past the 106-level and finally close at 105.97 on Friday.

What does it mean for the Asia Session?

China will release its latest inflation figures for both the consumer and producer sectors this morning where higher prices could reflect improving demand for consumer spending and manufacturing activity. Crude oil prices are likely to face some volatility following the release of November’s inflation data.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

As Asian markets digest the latest BLS employment report, the DXY rose above 106 and this index should continue its ascent as the day progresses – these are the support and resistance levels for today.

Support: 104.50

Resistance: 107.50.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 17 to 18 December 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

Gold suffered its second successive week of decline as spot prices tumbled under $2,650/oz to close at $2,633/oz on Friday. This precious metal hovered around $2,650/oz at the beginning of the Asia session and could edge higher today – these are the support and resistance levels for today.

Support: 2,560.00

Resistance: 2,715.00

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie dived under 0.6400 on the back of stronger-than-expected NFPs before closing at 0.6387 on Friday. This currency pair remained capped under 0.6400 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6350

Resistance: 0.6450

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 5th November, marking the eighth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but the forecasts published in today’s Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026.
• Headline inflation was 2.8% over the year to the September quarter, down from 3.8% over the year to the June quarter; this was as expected due to declines in fuel and electricity prices in the September quarter.
• However, this decline reflects a temporary cost of living relief; abstracting from these effects, underlying inflation (as represented by the trimmed mean) was 3.5% over the year to the September quarter and is still some way from the 2.5% midpoint of the inflation target.
• Growth in output has been weak as past declines in real disposable incomes and the ongoing effect of restrictive financial conditions continue to weigh on household consumption, particularly discretionary consumption.
• However, growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, has remained more resilient.
• A range of indicators suggest that labour market conditions remain tight, and while conditions have been easing gradually, some indicators have recently stabilised.
• Employment grew strongly over the three months to September, by an average of 0.4% per month but the unemployment rate was 4.1% in September, up from the trough of 3.5% in late 2022.
• While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high while the November SMP forecasts suggest that it will be some time yet before inflation is sustainably in the target range and approaching the midpoint.
• This reinforces the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and it will continue to rely upon the data and the evolving assessment of risks to guide its decisions.
• The next meeting is on 10 December 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Better-than-expected NFPs drove the Kiwi under 0.5850 before closing at 0.5821 on Friday. This currency pair gapped higher to open at 0.5833 but overhead pressures remain intact – these are the support and resistance levels for today.

Support: 0.5800

Resistance: 0.5885

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some services sectors have continued to grow.
• Consistent with feedback from business visits, high frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to further ease monetary policy restraint.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite stronger-than-expected NFPs on Friday, USD/JPY remained capped under the 151-level before closing at 149.96 last week. This currency pair gapped slightly lower to open at 148.85 and it continued to slide lower as Asian markets came online – these are the support and resistance levels for today.

Support: 149.00

Resistance: 151.50

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

Sentix Investor Confidence (9:30 am GMT)

What can we expect from EUR today?

The Sentix Investor Confidence index for the eurozone rose slightly at the beginning of November to -12.8 points. However, the German economy remains the problem child for the entire eurozone and although the estimate of -12.4 for the month of December points to a third consecutive month of improvement, the outlook for this economic region continues to remain bleak, putting further downward pressure on the Euro.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Robust demand for the dollar drove USD/CHF towards the 0.8800-level on Friday. This currency pair was rising towards 0.8800 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8700

Resistance: 0.8800

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Better-than-expected NFPs triggered higher demand for the greenback causing Cable to reverse off Friday’s high of 1.2811 to plunge under 1.2750 before closing at 1.2741. This currency pair gapped slightly lower to open at 1.2728 but it filled this gap as Asian markets came online – these are the support and resistance levels for today.

Support: 1.2640

Resistance: 1.2800

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Stronger-than-expected NFPs triggered higher demand for the dollar causing USD/CAD to surge past the 1.4100-level last Friday before closing at 1.4158. This currency pair gapped lower to open at 1.4152 before filling it at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.3950

Resistance: 1.4200

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 11 December 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

China CPI & PPI (1:30 am GMT)

What can we expect from Oil today?

Crude oil prices declined for the second consecutive week with WTI closing at $67.20 per barrel on Friday. This benchmark gapped slightly lower to open at $67.15 before filling it as Asian markets came online. China will release its latest inflation figures for both the consumer and producer sectors this morning where higher prices could reflect improving demand for consumer spending and manufacturing activity. Crude oil prices are likely to face some volatility following the release of November’s inflation data.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 9 December 2024 first appeared on IC Markets | Official Blog.