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• Advance Q3 reading was +2.8% annualized
• Second estimate was +2.8% annualized
• Final Q2 reading was +3.0% annualized

Details:

• Consumer spending +2.8% vs +3.5% second reading
• Consumer spending on durables +7.6% vs +8.1% second reading
• GDP final sales +3.3% vs +3.0% second reading
• GDP deflator +1.9% vs +1.9% second reading
• Core PCE +2.2% vs +2.1% second reading
• Corporate profits after tax -0.4% vs 0.0% second reading
• Business investment (nonresidential fixed investment) +4.0%

Contributors and subtractors to growth:

• Consumption: +2.48 pp vs +2.37 pp second reading
• Government: +0.86 pp vs +0.83 pp second reading
• Net International trade: -0.43 pp vs -0.57 pp second reading
• Inventories: -0.22 pp vs -0.11 pp second reading

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

• Prior week 242K
• Initial jobless claims 220K vs 230K estimate
• 4-week moving average of the initial jobless claims 225.50K vs 224.25K last week
• Prior week continuing claims 1.886M revised to 1.879M last week.
• Continuing Claims for the current week 1.874M vs 1.890M est.
• 4-week moving average of the continuing claims 1.880M vs 1.886M last week

The weekly data dips back to the downside after the spike higher last week. It seems the data might be impacted by the calendar or other external factors causing some volatility in the short term.

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

The Fed cut rates, BUT they took back 2 of 4 cuts expected in September (only expect 2 cuts in 2025). As a result, the market is only pricing in an 8% chance of a cut in January and only 35 basis points of cuts by the end of 2025 (even more hawkish than the Fed).

• The dollar moved higher closing the day near the highs for the major currency pairs.

The US stocks moved sharply lower yesterday:

• The Dow industrial average is now down for 10 consecutive days. It’s decline for today is its worst single day since August 5 when the index fell -2.6%. The index fell -2.58%
• The S&P index fell at its worst day also since August 5 when the index fell -3.0%. The index fell -2.95%.
• The NASDAQ index had its worst day since July 24 when the index fell -3.64%. The index fell -3.56%

Add the fall in the Russell 2000 which fell -4.39% and it was a bad day

US yields moved higher with double-digit gains in the 2 year (Up 11.2 bps to 4.359%), and the 10 year (up 12.5 bps to 4.52%).

In trading today, the USD is mixed (and volatile), US futures are implying a higher open (S&P up 39 points, the Dow up 257, and the Nasdaq up 150 points), the US yields are mixed with the 2 year down a couple basis points and the 10 year up about 4 basis points.

The Bank of Japan 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

It sounds like no rise and the USDJPY is moving higher (lower JPY) as a result.

The BOE kept rates unchanged as well. 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

Taking a snapshot of the major currency pairs vs the USD, the USD is higher vs the JPY by 1.34%, but lower vs the other currencies with declines of -0.53% vs the AUD –0.59% vs the CHF, -0.58% vs the CAD and -0.59% vs the NZD.

The video below outlines the technicals in play vs the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD after the fireworks over the last 18 or so hours of trading.

VIDEO IS COMING……

In other markets this morning:

• Crude oil is down $-0.23 or -0.33% at $69.73
• Gold is trading up $21 or 0.0% at $2605 after tumbling $-61 during yesterday’s trading
• Bitcoin is trading up about $1700 a $101,925

On the economic calendar today,

• GDP final for Q3 is expected 2.8%
• Initial jobless claims are expected and 230K with continuing claims expected at 1.890M
• Philly Fed is index expected at 3.0 versus -5.5 last month
• Existing home sales is expected to rise to 4.07M from 3.96M last month (10 AM ET)
• Canada’s average weekly earnings for October will be released at 8:30 AM. Last month it came in at 5.16%

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

We get a trio of economic data releases at the bottom of the hour including US initial jobless claims (shown above), the Philly Fed and final Q3 GDP.

The one to focus on is claims. It caught the market off guard with a jump last week, though it looks like it was due to one-off events. The consensus is for a decline back down to 230K but a further rise would be an interesting development. Powell tilted the Fed’s focus back towards the inflation mandate yesterday and this would make for a perfect time for a rug pull on jobs, at least if you enjoy maximum chaos.

Note that this is NFP survey week as well, so the claims number could be particularly impactful.

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

Headlines:

• Dollar gives back some of its post-Fed gains
• Weekly update on interest rate expectations
• USD/JPY ramps up to hit 156.00 on Ueda presser
• BOJ governor Ueda: Hard to say if incoming data will be sufficient to support January hike
• BOJ governor Ueda: The big picture on wage trends will become clearer in March, April
• BOJ governor Ueda: January decision will be ‘holistic’ based on available data
• BOJ governor Ueda: Decision to keep rates unchanged was based on several factors
• BOJ governor Ueda: Japan economy is recovering moderately, although some weakness seen
• BOE leaves bank rate unchanged at 4.75%, as expected
• ECB’s Šimkus: Inflation risks are balanced for next year
• ECB’s Patsalides: I prefer small, gradual rate cuts
• Germany January GfK consumer sentiment -21.3 vs -22.5 expected
• France December business confidence 94 vs 96 prior

Markets:

• CHF leads, JPY lags on the day
• European equities lower; S&P 500 futures up 0.7%
• US 10-year yields up 4.4 bps to 4.542%
• Gold up 1.0% to $2,612.73
• WTI crude down 0.2% to $70.42
• Bitcoin up 1.3% to $102,276

It was a modestly eventful session as market players dealt with two more major central bank decisions today after the Fed yesterday.

The post-Fed moves were faded somewhat with the dollar retracing gains alongside a minor bounce in US futures on the day. But after the BOJ decision earlier to keep interest rates unchanged, governor Kazuo Ueda sent a clear message that they are willing to kick the can down the road to March before hiking next.

And that sent USD/JPY running higher early on in the session from 155.50 all the way up to a high of 157.15 before settling just under 157.00 currently. Ueda’s point is that they don’t have enough information on wage trends and there is much uncertainty on Trump’s tariffs to come. Both of which will almost surely not be that much changed by January.

Outside of that though, the dollar struggled to maintain gains from yesterday as we see a retracement across the board.

EUR/USD moved up from 1.0360 to 1.0400 while USD/CAD dipped from 1.4430 to 1.4375 during the session. Even the antipodes managed a bounce with AUD/USD finding buyers at key support at 0.6200 to 0.6250 currently.

GBP/USD managed a modest bounce to 1.2660 levels before being pulled back to around 1.2630. And then we had the BOE policy decision, which saw three policymakers dissent in favour of a 25 bps rate cut – as opposed to just Dhingra. That pinned cable down to 1.2605 currently, though still up 0.3% on the day.

In other markets, European indices are down roughly by 1% across the board in catching up to Wall Street losses yesterday. That said, the selling isn’t as bad as US futures are catching a minor bounce with S&P 500 futures seen up 0.7% today. It’s still early in the day though as Wall Street is a different beast as seen several times already this week.

As for bonds, short-end yields are down slightly but the long-end continues to sell off with 10-year yields in the US now rising to 4.54%. It’s certainly something to keep an eye out for as we look towards the closing stages this week and into the new year.

This article was written by Justin Low at www.forexlive.com.

On the bank rate vote, here’s what the calls are:

• Barclays: 8-1 vote for a hold but minor possibility it could be as much as 6-3
• BofA: 8-1 vote for a hold with risks for a 9-0
• Deustche: 9-0 vote for a hold
• Goldman Sachs: 8-1 vote for a hold
• HSBC: 8-1 vote for a hold
• JP Morgan: 8-1 vote for a hold
• Morgan Stanley: 8-1 vote for a hold
• Nomura: 8-1 vote for a hold

Besides Barclays’ outside call, there is more or less a general consensus expecting a 8-1 vote with Dhingra set to be the only policymaker to dissent in favour of a rate cut.

As for the central bank’s guidance, there is also a consensus is expecting the “gradual” approach to be maintained. In essence, the language will mostly be the same as per what we saw in November here.

But amid recent developments in the UK economy, the calls for next year are differing. While most are anticipating quarterly rate cuts at the moment, there are a few standouts.

Barclays is seeing that the BOE might have to readjust their pacing and “move to sequential 25bp moves in May, June, August and September, leaving the bank rate at
3.50%.. we think a majority of the committee will see this as consistent with policy being
neutral”.

Meanwhile, Deutsche sees the BOE taking it slow in the first half of next year before accelerating the pace in the second half of the year. The firm sees “three rate cuts in 2H 2025, taking
place in August, November and December.. The bank rate settling at 3.25% in Q1-26 –
broadly consistent with our view of medium-term r-star”.

As for HSBC, the firm sees rate cuts in February, May, August, September, November and December 2025
with a final cut to 3.00% in February 2026.

(h/t @ MNI – Market News)

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 20/12/2024 first appeared on IC Markets | Official Blog.

Slight delay in the release by the source. There were surpluses recorded for goods (€30 billion) and services (€15 billion). That is offset by deficits for secondary income (€15 billion) and primary income (€5 billion).

This article was written by Justin Low at www.forexlive.com.

USD/JPY may be at the highs for the day at 156.85 but the dollar is lower against the rest of the major currencies bloc at the moment. The greenback is down around 0.3% to 0.4% across the board, so the losses elsewhere aren’t anything too significant as compared to the gains caught during the post-Fed reaction yesterday.

In the case of EUR/USD, the pair is up 0.4% to near 1.0400 but is holding just below the figure level for now with large option expiries in play as noted here. That might help keep a lid on things before we get to the US weekly initial jobless claims later.

Besides that, GBP/USD is also up 0.4% to 1.2620 and USD/CAD down 0.3% to 1.4403 currently. The latter is still seeing a meaningful breakout as it climbed to its highest levels since March 2020 yesterday. On the monthly chart there, a firm break above 1.4100 will mark a significant step in trying to push to test key resistance around 1.4500 through to 1.4600 levels next.

Elsewhere, AUD/USD is also seen up 0.3% to 0.6238 now after having run into a test of the 0.6200 level:

That is a key level on the weekly chart as seen above, having stalled the downside move back in October 2022. That said, the pair is still down 4% this month with sellers well in control amid the very light bounce on the day.

So far, it’s all just a soft retracement to the moves yesterday and we’re seeing a similar mood play out in broader markets as well.

S&P 500 futures are up 0.4% while gold is up 1.1% to $2,616 on the day currently. In the bond market, 2-year Treasury yields are down 2.6 bps to 4.33% but 10-year Treasury yields are holding steadier at 4.52%.

This article was written by Justin Low at www.forexlive.com.

• Prior 96
• Manufacturing confidence 97
• Prior 97
• Services confidence 96
• Prior 98

The French business climate falls to its lowest since July as sentiment continues to worsen for Europe’s second largest economy. Of note, employment conditions are also seen weakening further with the index there dropping to 96 from 98 previously. That also matches its softest reading since July.

This article was written by Justin Low at www.forexlive.com.

• Prior -23.3; revised to -23.1

There is a slight pickup in German consumer morale going into the turn of the year but it remains at a low level historically. GfK notes that “a sustained recovery in consumer sentiment is not yet in sight, as consumer uncertainty is still too high”.

This article was written by Justin Low at www.forexlive.com.

• German DAX futures -1.4%
• French CAC 40 futures -1.5%
• UK FTSE futures -1.1%

A more hawkish Fed looks to have turned December on its head for equities. European indices look set for a sea of red in trying to catch up to the heavy losses in Wall Street yesterday. US futures are more muted today though, keeping little changed near flat levels thus far. So, that’s at least helping to not make things worse at the start of European trading.

This article was written by Justin Low at www.forexlive.com.