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There are other steps to try before a shutdown is confirmed, but the indications are not looking positive right now.

Comments from a US Republican member:

• “I am absolutely sickened by a party that campaigns on fiscal responsibility and has the temerity to go forward to the American people and say you think this is fiscally responsible. It is absolutely ridiculous.”

The context being Trump wants more debt and not all in his party agree.

This is a really old pic … but not much ever changes does it?

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

Japan inflation data November 2024, all figures are y/y.

Headline national CPI 2.9%

• expected 2.9%, prior 2.3%

CPI excluding Fresh Food & Energy 2.4% (often referred to as ‘core-core’ inflation, its the closest to US core inflation)

• expected 2.4%, prior 2.3%

CPI excluding Fresh Food 2.7% (core inflation)

• expected expected 2.6%, prior 2.3%

All three of these measures of Japanese inflation are above the Bank of Japan 2% target, and all three have accelerated from last month. And yet, the BoJ is leaving rates on hold? Meanwhile Inflation in the US is sticky well above 2% and yet the FOMC cut rates? Central bankers are a weird bunch. Wall-to-wall PhDs and not a brain cell between them.

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

New Zealand trade data for November 2024

Exports 6.48bn NZD

• prior 5.61bn

Imports 6.92bn

• prior 7.27bn

Trade Balance -437.0mn

• prior -1658mn

Annual Trade Balance -8.25bn

• prior -9.07bn

NZD/USD not a lot changed on the data release, nestled near US time lows.

For the technical analysts, if you check out the chart above (5 minute candles NZD/USD) on our free app and cram more data into the chart it looks like we’ve pulled back into a support area (on a resistance becoming support basis). Let me know how wrong I am in the comments 😉

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

• US broader indices give up gains and close lower on the day
• New Zealand December consumer confidence jumps into optimism! 100.2 (prior 99.8)
• Republican Congressman Tom Cole says there’s an agreement on a stopgap funding bill
• Crude oil futures settles at $69.38, down -$0.64 or 0.91%
• Mexico central bank cuts its benchmark interest rate to 10% from 10.25%
• Bitcoin moving down and away from $100K
• US sells 5 year TIPS at 2.121% vs WI at 2.065% at the time of the auction
• Deutsche Bank says the Fed won’t cut rates in 2025
• US 30 year mortage rate rises to 6.72% from 6.60% last week.
• Canadian Prime Minister Justin Trudeau to further shuffle cabinet on Friday
• European equity close: DAX falls back below 20,000
• Trump says he wants the debt ceiling eliminated or extended
• The question hanging over the market: What are Trump’s real priorities?
• BOE’s Bailey: Market rate pricing for February is in a reasonable place
• US November existing home sales 4.15m vs 4.07m expected
• The lesson from Powell: It’s kind of fallen apart
• US Q3 final GDP +3.1% vs +2.8% expected
• December Philly Fed manufacturing index -16.4 vs +3.0 expected
• US Initial jobless claims 220K vs 230K estimate
• What is moving in the markets today? A technical look at the 3 major currency pairs
• ForexLive European FX news wrap: Yen tumbles on Ueda, BOE keeps rates steady
• BOE leaves bank rate unchanged at 4.75%, as expected

Markets:

• Crude oil $69.14 down -$0.88 or -1.26%
• Gold up $8.98 or 0.35% at $2593
• Silver -$0.30 or -1.07% at $29.02
• Bitcoin down -$2,300 at $97,611

In the US stocks, the broader indices gave up gains and closed lower, but the Dow snapped a 10 day losing streak and is closing higher.

• Dow up 15.37 points or 0.04% at 43,342.24
• S&P fell -5.08 poiints or -0.09% at 5867.08
• Nasdaq fell -19.92 points or -0.10% a 18,372.77

In the US debt market :

• 2 year 4.316%, down -4.3 bps
• 10 year 4.57%, up 5.0 bps
• 30 year 4.744%, +6.5 bps

European indices closed sharply lower:

• German Dx, -1.35%
• France’s CAC -1.22%
• UK FTSE 100, -1.14%
• Spain’s Ibex -1.52%
• Italy’s FTSE MIB -1.78%

In the forex, the USD is mixed with the greenback higher vs the JPY the biggest mover (by 1.69%. The dollar also rose vs the GBP (by 0.60%). Both the BOJ and BOE kept rates unchanged but the moves were considered more dovish sending the JPY and the GBP lower.

The BOE kept rates unchanged. The surprise was the vote which had 3 dissenters who wanted to cut rates. That has sent the GBPUSD back lower (the USD higher) after the pair had moved higher in the early European session. Below are the main points from the BOE statement this morning.

• Bank rate vote 6-3 vs 8-1 expected (Dhingra, Ramsden, Taylor voted to cut bank rate by 25 bps)
• A gradual approach to removing monetary policy restraint remains appropriate
• We can’t commit to when or by how much we will cut rates in 2025 as economic uncertainty is high
• Services consumer price inflation has remained elevated
• Remaining domestic inflationary pressures are resolving more slowly
• Most indicators of UK near-term activity have declined
• Labour market is broadly in balance

The GBPUSD which snapped back higher to test the 100-hour MA (and swing area) near 1.2660 in the European morning session, turned lower after the decision, fell below the low from the Asian session at 1.2563 and accelerated the decline until it reached the lows from November (lowest level since May) at 1.24865. The low for the day reached 1.2494 with the price currently trading near that level going into the new trading day. Going into the new day, that level will be a barometer for the buyers and the sellers.

The Bank of Japan also met today and they too kept rates unchanged. BOJ Ueda said:

• Japan economy is recovering modestly, although some weakness seen
• Hard to say if incoming data will be sufficient to support January hike
• Need more data on wages (which may imply waiting on hikes).
• Need to gauge situation for quite a while on both wages and possible Trump tariffs
• If we decide not to hike, we will consider that decision as a safe one
• There is of course the risk of falling behind the curve in waiting
• But we will consider said risk if we were to decide to skip a rate hike in January

The comments sound like there will be no rise in rates soon, and as a result, the USDJPY moved higher (lower JPY). The price extended to the next target area between 157.66 and 158.42 on the daily chart where the buying slowed, but so far the modest correction has been able to stay above close support near 157.10 (the low reached 157.30. Watch the 157.10 level for a close and short term bias defining level after the trend move higher today.

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

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

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

ANZ-Roy Morgan New Zealand Consumer Confidence index for December 2024 comes in at 100.2

• November was 99.8

As part of the survey are questions on

Inflation expectations

• eased back 0.2%pts to 3.8%, where they’ve spent four of the past five months.

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

Late selling into the close has pushed the broader indices lower and into negative territory. The Dow held onto small gains – but just barely – and snapped it’s 10-day losing streak.

The final numbers are showing”

• Dow Industrial Average rose 15.37 points or 0.05% at 42342.24
• S&P fell -5.09 points or -0.09% at 5867.07
• Nasdaq fell -19.92 points or -0.10% at 19372.77

The Russell 2000 fell -10.01 points or 0.45% at 2221.49

The major indices did try to make a run at erasing some of the declines. At session highs, the

• Dow was up 460.98 points
• S&P was up 63.36 points
• Nasdaq was up 230.37 points
• Russell 2000 was up 33.83 points

However, the hangover from yesterday’s hawkish Fed decision, ultimately weighed on prices

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

The Bank of Japan (BOJ) left its short-term rate unchanged yesterday, while Governor Ueda spoke later:

• ForexLive Asia-Pacific FX news wrap: Bank of Japan leaves rates unchanged, yen slumps
• ForexLive European FX news wrap: Yen tumbles on Ueda, BOE keeps rates steady (this includes Ueda’s news conference)

Today we get the latest update on Japan’s national inflation data. This has been, and remains, a focal point for BOJ monetary policy decisions, along with wage developments. And politics also – there are conflicting pressures on the BOJ to normalise policy but not to exacerbate cost of living concerns with higher rates!

October Inflation Data (the ‘prior’):

• The nationwide core Consumer Price Index (CPI), which excludes volatile fresh food prices, rose by 2.3% year-on-year. This marked the 25th consecutive month that core inflation remained above the BOJ’s 2% target, indicating persistent inflationary pressures.

• For the November data – forecast:

  • Analysts anticipate an acceleration in core consumer price inflation to 2.6%, up from 2.3% in October. This expected rise is attributed to higher rice prices and the reduction of utility subsidies, which increased energy costs.

Other Contributing Factors:

• Energy Costs: The trimming of subsidies for electricity and city gas bills has led to increased energy prices, contributing to overall inflation.

• Wage Growth: In October, base wages in Japan grew at the fastest pace in 32 years, with a 2.7% increase. This wage growth supports consumer spending, potentially sustaining inflationary trends.

Later in the session is the People’s Bank of China setting its Loan Prime Rates (LPRs). I’ll have more to come on this separately.

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
• I’ve noted data for New Zealand and Australia with text as the similarity of the little flags can sometimes be confusing.

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

Republican Congressman Tom Cole is saying there is a deal on the stopgap funding bill.

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

US stocks are modestly higher after the sharp declines during yesterday’s trading. Moreover the Dow is on pace to snap its 10 day decline that saw the index fall -6.12% from the high December 5 to the low price reached yesterday. The low price yesterday reached 42,407.79. That was just short of its 100 day moving average. That moving average is 42,256.46.

The index is currently 168 points or 0.40% and 42,496. Although higher on the day, it is near its lows and 42,407.79. The high price reached 42,787.85.

The S&P index is up 0.30% and the NASDAQ index is up 0.35%.

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

The Mexican central bank cut its benchmark interest rate to 10% from 10.25%.

• The cut was as expected
• The decision was unanimous
• Looking ahead, the board expects that the inflationary environment will to keep cutting reference rate in view of the progress on disinflation, larger downward adjustments could be considered in some meetings, albeit maintaining a restrictive stance
• Headline inflation expected to converge to target in Q3 of 2026.
• Balance of the risks for the trajectory of inflation within the forecast horizon remains bias to the upside.
• Forecast Q4 2024 average annual headline inflation at 4.6% versus previous forecast of 4.7%.
• Forecast Q4 2025 average annual headline inflation at 3.3% versus previous forecast of 3.0%.
• The balance of risks to growth of economic activity remains bias to the downside.
• In view of the progress on disinflation, larger downward adjustments could be considered in some meetings, howbeit maintaining a restrictive stance.
• Following the significant weakness observed in the past three quarters, the Mexican economy registered a greater rate of expansion during the third quarter of 2024
• Actions will be implemented in such a way that they reference rate remains consistent at all times with the trajectory needed to enable an orderly and sustained convergence of headline inflation to the 3% target during the forecast period.
• Core inflation trajectory is anticipated to continue decreasing.
• Looking ahead, headline and core inflation are still present to follow a downward trend

Looking at the 4-hour chart, the price has moved back down to test its 100 and 200 bar moving averages on that chart at 20.3026 and 20.2729 respectively.

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

High Yield: 2.121%

• Compared to the previous auction’s yield of 1.67%.
• Higher than the six-auction average of 1.99%.

Tail: 5.6 basis points

• Lower than the previous auction’s tail of 15 basis points.
• Lower than the six-auction average of 9.0 basis points.
• Note: The 5-year TIPS traded at 2.065% at 1:00 PM EST.

Bid-to-Cover Ratio: 2.10x

• Lower than the previous auction’s ratio of 2.40x.
• Also lower than the six-auction average of 2.50x.

Dealer Allocation: 25.42%

• Slightly lower than the previous 25.79%.
• Below the six-auction average of 5.55%.

Direct Allocation: 23.15%

• Higher than the previous auction’s 17.30%.
• Exceeds the six-auction average of 16.73%.

Indirect Allocation: 51.43%

• Lower than the previous auction’s 74.84%.
• Below the six-auction average of 77.7%.

US yields show lower short term yields but sharply higher yields out the curve.

• 2 year 4.318%, down -3.6 bps
• 5 year 4.432% up 4.9 bps
• 10 year 4.588%, up 8.8 bps
• 30 year 4.768%, up 10.8 bps

The 2-10 year spread is up to 27 bps. It was near flat on November. The 50% midpoint of the move down from the 2021 high comes in right around that level at 26.7 bps.

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