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  • GBP outperforms modestly – Scotiabank

    GBP outperforms modestly – Scotiabank


    Despite some sloppy GDP data for October reported Friday and today’s less than stellar December PMIs, there is little anticipation of any BoE rate action this week. Markets have priced in just 2bps of easing risk for the decision Thursday, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

    GBP trades off early high

    “The Pound Sterling (GBP) picked up a little ground on the US Dollar (USD) from the start of trade in Asia and gains accelerated a little around this morning’s data, which saw a small beat on the Services PMI. EURGBP edged back under 0.83.”

    “GBP/USD has recovered a little of last week’s drop in trade so far today but the intraday look of price action suggests a short-term block at least on gains through the upper 1.26s that may undermine a further rebound. Some sideways trading between support at 1.2600/10 and 1.2670/75 may result.”

  • EUR/USD Struggles to Sustain Gains Above 1.05 – Scotiabank

    EUR/USD Struggles to Sustain Gains Above 1.05 – Scotiabank

    The Euro (EUR) briefly gained momentum earlier on Monday, supported by better-than-expected preliminary December PMI data from the Eurozone. However, Scotiabank’s Chief FX Strategist, Shaun Osborne, highlights the challenges in maintaining upward momentum amid persistent market concerns.

    Key Highlights

    1. Eurozone PMI Data Provides a Boost
      • French and German Services PMIs came in stronger than expected, pushing the Eurozone Services PMI to 51.4, a notable improvement of over two points from November.
      • Despite this positive data, the Euro has struggled to hold onto gains, weighed down by lingering trade concerns.
    2. Moody’s Downgrades France
      • Late Friday, Moody’s unexpectedly downgraded France’s sovereign credit rating from Aa3 to Aa2, adding to market jitters.
      • This caused a slight widening of the Bund/OAT spread (the difference between German and French bond yields), which later narrowed back to Friday’s closing levels.
    3. EUR/USD Fails to Break Above 1.05
      • The Euro remains stuck within its December trading range.
      • Intraday price action suggests a bearish bias, with another rejection at levels above 1.05.

    Technical Outlook

    • Support: 1.0450–1.0460 remains a critical zone.
    • Resistance: Immediate resistance is seen at 1.0535–1.0540.
    • Bias: Intraday momentum indicates downside pressure, keeping the Euro vulnerable unless it can break decisively above 1.05.

    Conclusion

    While the Euro received a lift from stronger PMI data, the lingering effects of Moody’s credit downgrade for France and trade-related concerns have dampened enthusiasm. For now, EUR/USD appears trapped in its range, with bearish sentiment capping gains above 1.05.

  • ECB President Lagarde: Rate Cuts Possible If Disinflation Trend Holds

    ECB President Lagarde: Rate Cuts Possible If Disinflation Trend Holds

    European Central Bank (ECB) President Christine Lagarde spoke on Monday at the Annual Economics Conference, focusing on the theme “Pillars of Resilience Amid Global Geopolitical Shifts.” Below are key takeaways:

    Key Highlights

    • Rate cuts under consideration: Lagarde indicated that further rate cuts could occur if incoming data confirm that disinflation is progressing as expected.
    • Shift in policy stance: The ECB no longer sees the need to maintain rates at “sufficiently restrictive” levels.
    • Near target achievement: Lagarde suggested the ECB is close to meeting its inflation target.
    • Service sector inflation cooling: Inflation momentum in services has shown a significant recent decline.
    • Economic risks from U.S. policy: Eurozone growth could face challenges due to new U.S. protectionist measures.

    Market Impact

    Lagarde’s remarks had minimal immediate effect on the Euro. The EUR/USD remains steady, trading near 1.0500.

    ECB FAQs: Quick Insights

    What is the ECB, and how does it influence the Euro?

    The European Central Bank (ECB) manages monetary policy for the Eurozone, aiming to maintain price stability (around 2% inflation). It influences the Euro primarily through interest rate decisions.

    • Higher rates tend to strengthen the Euro.
    • Lower rates generally weaken the Euro.

    The ECB’s Governing Council meets eight times annually to decide monetary policy, including input from national bank heads and six permanent members like ECB President Christine Lagarde.

    What is Quantitative Easing (QE), and how does it impact the Euro?

    Quantitative Easing (QE) is an ECB strategy used during economic crises. By purchasing assets like government or corporate bonds, the ECB injects liquidity into the economy.

    • QE typically weakens the Euro because it increases money supply.
    • QE is a last-resort measure when cutting interest rates alone fails to stabilize inflation.

    The ECB employed QE during:

    • The Great Financial Crisis (2009–2011).
    • Persistent low inflation (2015).
    • The COVID-19 pandemic.

    What is Quantitative Tightening (QT), and how does it impact the Euro?

    Quantitative Tightening (QT) is the opposite of QE. It happens during economic recovery when inflation rises.

    • QT typically strengthens the Euro by reducing liquidity in the market.
    • The ECB achieves this by halting bond purchases and no longer reinvesting in maturing bonds.

    QT signals confidence in the economy and aims to manage inflation effectively.

  • Final Central Bank Meetings of the Year in Central and Eastern Europe

    Final Central Bank Meetings of the Year in Central and Eastern Europe

    The last rate-setting meetings of the year will take place in Czechia and Hungary this week.

    • Hungary: The central bank is expected to maintain its key policy rate at 6.5%, largely due to the persistent weakness of the Hungarian forint (HUF).
    • Czechia: Stability is also anticipated, with rates remaining at 4.0%, although a rate cut cannot be entirely ruled out.

    In Poland, economic data releases for November, including industrial output and retail sales growth, will provide insights into fourth-quarter economic performance. Additionally, several countries in the region will publish inflation figures and producer price data for November.

    Labor Market Updates:

    • Slovakia and Croatia: Unemployment rate figures are due.
    • Poland and Croatia: Wage growth data will be released.

    This is the final edition of CEE Market Insights for the year. We wish our readers a peaceful holiday season. The next issue will be available on Tuesday, January 7, 2025.

    FX Market Developments

    Last week saw mixed performance among regional currencies:

    • The Polish zloty (PLN) weakened against the euro.
    • The Czech koruna (CZK) and the Hungarian forint (HUF) showed slight gains.

    The EUR/HUF exchange rate fell below 410, but the Hungarian currency remains notably weak, influencing the central bank’s likely decision to keep rates unchanged at its upcoming meeting. Meanwhile, the Czech koruna is expected to see policy stability.

    The Hungarian forint has been the region’s underperformer this year, lagging behind its peers. In contrast, the Romanian leu (RON) has remained stable due to central bank interventions. However, depreciation pressures may resurface after Romania’s presidential elections next year.

    Bond Market Developments

    Last week’s ECB decision to cut interest rates by 25 basis points had a muted impact on bond markets.

    Key movements:

    • Hungarian Government Bonds (HGB) and Romanian Government Bonds (ROMGB) yield curves declined, with ROMGBs seeing significant movement.
    • Romania’s progress in forming a new government and discussions on freezing some expenditure increases suggest awareness of the country’s fiscal challenges.

    Upcoming Bond Auctions:

    • Romania: Reopening of ROMGBs 2028 and 2030.
    • Czechia: Sale of floating-rate bonds (floaters).
    • Hungary and Poland: Regular bond auctions.
    • T-bills: Scheduled in Croatia, Hungary, and Romania. Notably, the Czech T-bill auction has been canceled.
  • EUR/GBP Steady Above 0.8300 as Markets Await Eurozone and UK PMI Data

    EUR/GBP Steady Above 0.8300 as Markets Await Eurozone and UK PMI Data

    Key Highlights:

    • EUR/GBP consolidates above 0.8300 ahead of crucial PMI releases for manufacturing and services sectors.
    • The Euro finds support following French President Emmanuel Macron’s appointment of centrist ally François Bayrou as Prime Minister.
    • Expectations of cautious monetary easing by the Bank of England (BoE) could cap gains for the Pound Sterling (GBP).

    EUR/GBP trades near 0.8320 during Monday’s European session, stabilizing after two days of gains. Investors are closely monitoring the upcoming Purchasing Managers Index (PMI) figures from the Eurozone and the UK, which will provide fresh insights into private sector activity in both regions.

    Eurozone Strength Amid Political Developments
    The Euro strengthened after French President Emmanuel Macron appointed François Bayrou, a centrist ally, as Prime Minister. The move is seen as a step toward political stability after Michel Barnier’s resignation following a parliamentary confidence vote.

    Additionally, European Central Bank (ECB) Governing Council member Robert Holzmann reiterated the central bank’s commitment to price stability, emphasizing that rate cuts aimed solely at stimulating economic growth would contradict the ECB’s current stance. Holzmann’s remarks underscore the ECB’s hawkish approach amid ongoing economic challenges.

    BoE Caution Limits Pound Upside
    The Pound faces mixed sentiment as the Bank of England (BoE) is expected to adopt a measured pace in monetary policy easing, contrasting with faster moves by other central banks. UK inflation is projected to rise next year, partly driven by fiscal stimulus measures from Finance Minister Rachel Reeves’ expansive budget.

    However, BoE Governor Andrew Bailey has hinted at the possibility of four rate cuts in 2025, which may weigh on GBP strength. This cautious outlook on the BoE’s policy trajectory could provide underlying support for the EUR/GBP pair.

    FAQs: Interest Rates and Their Market Impact

    What are interest rates?
    Interest rates are charges applied by financial institutions on loans and payments made to savers. Central banks set base lending rates, influencing broader economic conditions. Rates are adjusted to maintain inflation targets, typically around 2%. Lower rates stimulate economic activity, while higher rates aim to curb inflation.

    How do interest rates affect currencies?
    Higher interest rates generally strengthen a currency, as they attract global investors seeking higher returns.

    How do interest rates impact Gold prices?
    Higher interest rates tend to lower Gold prices by increasing the opportunity cost of holding non-interest-bearing assets like Gold. Rising interest rates also boost the US Dollar, further pressuring Gold prices, which are denominated in USD.

    What is the Fed Funds rate?
    The Fed Funds rate is the overnight lending rate between US banks, set by the Federal Reserve. It is a key benchmark for monetary policy and is expressed as a range (e.g., 4.75%-5.00%), with the upper limit being the commonly cited figure. Future rate expectations are tracked via tools like the CME FedWatch, influencing financial market trends.

  • GBP/USD Price Forecast: Stays Below 1.2650 Amid Persistent Bearish Momentum

    GBP/USD Price Forecast: Stays Below 1.2650 Amid Persistent Bearish Momentum

    GBP/USD trades near 1.2640 during early European hours on Monday, breaking a three-day losing streak but remaining under pressure within a descending channel. The pair hovers below the channel’s upper boundary and the nine-day Exponential Moving Average (EMA) at 1.2684, reinforcing a bearish outlook.

    On the daily chart, the bearish sentiment is underlined by the 14-day Relative Strength Index (RSI), which stays below the neutral 50 mark, signaling weak momentum. Additionally, the pair trades below both the nine-day and 14-day EMAs, further suggesting limited upside potential in the short term.

    Key Support Levels
    The immediate downside target for GBP/USD lies near its four-week low of 1.2487, recorded on November 22. A decisive break below this level could intensify the bearish momentum, potentially pushing the pair toward the descending channel’s lower boundary near its yearly low of 1.2299, last seen on April 22.

    Resistance Levels
    On the upside, the initial resistance is pegged at the descending channel’s upper boundary, aligned with the nine-day EMA at 1.2684. A breakout above this level could ease the bearish pressure and pave the way for a recovery toward the recent five-week high of 1.2811, marked on December 6.

    Until GBP/USD breaks out of its descending channel, the broader bias remains tilted toward further downside risks.

    GBP/USD: Daily Chart

    British Pound PRICE Today

    The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.

     USDEURGBPJPYCADAUDNZDCHF
    USD -0.12%-0.14%-0.09%-0.06%-0.18%-0.26%-0.28%
    EUR0.12% 0.04%0.13%0.13%0.12%-0.05%-0.10%
    GBP0.14%-0.04% -0.04%0.09%0.08%-0.12%-0.14%
    JPY0.09%-0.13%0.04% 0.02%-0.07%-0.14%-0.10%
    CAD0.06%-0.13%-0.09%-0.02% -0.07%-0.21%-0.23%
    AUD0.18%-0.12%-0.08%0.07%0.07% -0.17%-0.22%
    NZD0.26%0.05%0.12%0.14%0.21%0.17% -0.04%
    CHF0.28%0.10%0.14%0.10%0.23%0.22%0.04% 

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

  • Moody’s Downgrades France and Slovakia Amid Fiscal and Political Challenges

    Moody’s Downgrades France and Slovakia Amid Fiscal and Political Challenges

    Market Recap
    On Friday, German and European Monetary Union (EMU) bond yields showed modest initial gains but extended their upward trajectory by the session’s close. US Treasury yields rose as well, with the 2-year yield adding 5.4 basis points (bps) and the 10-year yield increasing by 6.9 bps. While no significant US economic data was released, markets speculated that the Federal Reserve (Fed) might adopt a more cautious stance on future rate cuts due to solid US activity data, higher-than-expected inflation, and uncertainties surrounding fiscal policy.

    The Fed’s updated dot plot, due this week, is expected to provide clearer guidance on its monetary policy outlook. In Europe, German yields continued their post-ECB rebound, rising around 5 bps across the curve, with long-term yields (30-year) rising slightly less at 3.4 bps. Early ECB policymaker commentary reflected ongoing divisions between hawks and doves, though the consensus leaned toward a gradualist approach for now.

    In the currency market, the euro attempted to recover against the US dollar, with EUR/USD closing at 1.0501, up from 1.0468. Sterling underperformed against both the euro and the dollar following weak UK data, including disappointing October industrial production and a second consecutive monthly GDP contraction (-0.1%). EUR/GBP rose above 0.83, easing concerns of a potential test of the 2022 low at 0.8203.

    Equity markets in Europe and the US closed relatively flat. In Asia, markets traded mostly lower following weaker-than-expected November retail sales in China, which rose by 3% year-on-year (vs. 5% expected), reflecting ongoing weak demand despite recent stimulus measures.

    Focus for Today

    • EMU Preliminary PMIs: Consensus expects the composite PMI to remain unchanged at 49.5, with little optimism for a near-term rebound amid ongoing political and economic uncertainties in France and Germany. Weak data could cap further increases in short-term EMU yields, with 2.20%-2.25% offering potential resistance for 2-year swaps.
    • US Services PMI: Investors will watch to see if the services PMI confirms the decline seen in the ISM services index, as the two often diverge.
    • Sterling Sensitivity: Following Friday’s disappointing UK data, sterling may face further pressure if the UK composite PMI (expected at 50.6) disappoints.

    Moody’s Downgrade of France and Slovakia

    Rating agency Moody’s downgraded both France (from Aa2 to Aa3, stable outlook) and Slovakia (from A2 to A3, stable outlook) after Friday’s market close.

    France:
    The downgrade reflects Moody’s concerns over France’s deteriorating public finances. Political fragmentation is likely to hinder significant fiscal consolidation, increasing the risk of a negative feedback loop involving higher deficits, rising debt levels, and elevated financing costs. Moody’s projects the following:

    • Deficit: Expected at 6.3% of GDP in 2025, gradually declining to 5.2% by 2027.
    • Debt-to-GDP: Projected to rise from 113.3% in 2024 to approximately 120% in 2027.

    Slovakia:
    The downgrade for Slovakia stems from broad institutional challenges and escalating political tensions. Key concerns include:

    • A deteriorating trend in governance indicators due to judicial and media reforms that weaken checks and balances.
    • Increased political fragmentation, complicating fiscal policymaking and further straining the country’s institutional stability.

    Political Developments in Germany

    Germany’s Christian Democratic Union (CDU) is set to unveil its election manifesto, which includes proposals aimed at bolstering support for hard-working citizens and addressing immigration concerns. According to a Financial Times report on a draft of the manifesto, key policies include:

    • Immigration Control: “We must decide ourselves once again who comes to us and who can stay.”
    • Tax Reforms:
      • Cuts to income tax for low- and middle-income earners.
      • Reductions in social security contributions.
      • A phased reduction in corporate tax from the current 30% to 25%.
      • Abolition of the “Soli” surcharge on income tax, initially introduced to fund German reunification.

    Despite these ambitious pledges, the CDU remains committed to Germany’s debt brake, leaving questions about how the proposed tax cuts and rebates will be funded. The manifesto reflects the party’s focus on fiscal discipline, summed up in its statement: “The debts of today are the taxes of tomorrow.”

  • Japanese Yen Weakens Ahead of Key Central Bank Decisions

    Japanese Yen Weakens Ahead of Key Central Bank Decisions

    • USD/JPY extends its rally for a sixth consecutive day, hovering near a three-week high.
    • Market skepticism over the Bank of Japan’s (BoJ) willingness to hike rates continues to pressure the Japanese Yen (JPY).
    • Elevated US Treasury yields and expectations of a less dovish Federal Reserve (Fed) support the US Dollar’s strength.

    Market Dynamics

    1. Bank of Japan Policy Outlook
    Investors remain unconvinced that the BoJ will tighten monetary policy further at its meeting this week. While Japan’s economy has shown resilience—evidenced by stronger-than-expected Core Machinery Orders (up 2.1% in October, 5.6% YoY) and improved Manufacturing PMI (49.5 in December, up from 49.0)—the data is unlikely to sway the central bank’s cautious stance.

    Despite consumer prices exceeding the BoJ’s 2% inflation target and a modestly expanding economy, doubts persist over whether the BoJ will raise interest rates, keeping the JPY on the defensive.

    2. US Dollar and Treasury Yields
    The US Dollar benefits from elevated Treasury bond yields as markets price in a 93% chance of a 25 basis point rate cut at the Fed’s December meeting. Signs of stalled progress toward the Fed’s 2% inflation target, however, have tempered expectations of aggressive rate cuts in 2025.

    Additionally, geopolitical risks and concerns over US President-elect Donald Trump’s tariff policies could lend some support to the safe-haven JPY, though these factors have yet to trigger a sustained recovery.

    3. Mixed Japanese Economic Data

    • Services PMI rose to 51.4 in December from 50.5, pushing the composite PMI to 50.8, its highest since November.
    • Japan’s Tankan survey reported improved business confidence among large manufacturers.
    • Despite this, the JPY struggled to gain traction, weighed down by skepticism surrounding the BoJ’s policy trajectory.

    Technical Outlook: USD/JPY

    • Upside Potential:
      A sustained break above the 154.00 handle and the 61.8% Fibonacci retracement level of the November-December drop could pave the way for further gains. The next key resistances are located at 154.55 and the 155.00 psychological level.
    • Downside Risks:
      Support levels are seen at 153.35-153.30, followed by 153.00. A break below 153.00 could expose the 200-day Simple Moving Average (SMA) near 152.10-152.00. Failure to hold this level may shift momentum in favor of bearish traders, targeting 151.00 and ultimately the 150.00 psychological mark.

    Outlook

    Traders remain cautious ahead of this week’s critical FOMC and BoJ meetings, which are expected to shape the near-term trajectory of USD/JPY. The pair’s performance will hinge on policy signals from both central banks, with the Fed’s tone on rate cuts and the BoJ’s inflation outlook being pivotal factors.

  • EUR/USD Steady Above 1.0500 Ahead of Fed Rate Decision

    EUR/USD Steady Above 1.0500 Ahead of Fed Rate Decision

    • EUR/USD maintains strength, trading around 1.0520 during Monday’s Asian session.
    • The US Federal Reserve is expected to announce a 25 basis point rate cut at its final monetary policy meeting of 2024.
    • The CME FedWatch tool indicates near-full market pricing of a quarter-point cut.
    • The Euro finds support following François Bayrou’s appointment as French Prime Minister by President Emmanuel Macron, boosting political stability prospects.

    Market Drivers

    1. Federal Reserve Expectations
    The US Dollar remains under pressure as markets anticipate a dovish stance from the Federal Reserve this week. Analysts widely expect a 25 basis point rate cut, reflecting the Fed’s efforts to align policy with inflation that remains above 2%.

    Fed Chair Jerome Powell has signaled a cautious approach to further easing, recently stating, “We can afford to be a little more cautious as we try to find neutral.” Powell emphasized the need for patience, indicating that the Fed is unlikely to rush into additional cuts.

    Markets will scrutinize Powell’s post-meeting press conference and the updated Dot Plot projections, which may provide further insights into the central bank’s 2025 policy trajectory.

    2. Political Stability in France
    The Euro received a boost after President Emmanuel Macron appointed centrist ally François Bayrou as Prime Minister. The move comes after the resignation of Michel Barnier, whose government collapsed due to dissatisfaction from both far-right and left-wing factions over fiscal policies. Bayrou’s appointment signals potential political stability in France, an outcome that supports the Euro.

    3. European Central Bank (ECB) Stance
    While the Euro gained traction, ECB officials have recently maintained a cautious tone. Governing Council member Robert Holzmann warned against cutting interest rates solely to stimulate growth, stating that the ECB’s mandate is to ensure price stability. Holzmann added, “Lowering rates now to boost the economy would contradict our current stance,” reflecting a commitment to a balanced approach.

    Outlook

    The EUR/USD pair remains well-supported ahead of Wednesday’s Fed meeting, as the US Dollar faces downward pressure from falling Treasury yields and dovish Fed expectations. However, potential upside in the Euro may be capped by the ECB’s cautious outlook.

    Traders will focus on Powell’s remarks and the Fed’s Dot Plot updates, as well as ongoing developments in European political and economic landscapes, to guide the next moves for EUR/USD.

  • Forex Today: Major Central Bank Week Kicks Off with Flash PMIs

    Forex Today: Major Central Bank Week Kicks Off with Flash PMIs

    Key Highlights for Monday, December 16:

    Markets are bracing for a pivotal week featuring the year-end policy decisions of several major central banks. Ahead of these announcements, flash Manufacturing and Services PMI data for December from Germany, the Eurozone, the UK, and the US are set to grab investors’ attention on Monday.

    Market Overview

    • US Dollar (USD): The USD Index advanced nearly 1% last week, driven by rising Treasury yields and a cautious market sentiment. Early Monday, the index consolidates below 107.00 as investors await the NY Empire State Manufacturing Index for December. The Federal Reserve (Fed) will announce its monetary policy decisions and release its updated Summary of Economic Projections (SEP) on Wednesday following its two-day meeting.

    US Dollar PRICE Last 7 days

    The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Japanese Yen.

     USDEURGBPJPYCADAUDNZDCHF
    USD 0.51%0.85%2.52%0.49%0.30%1.09%1.40%
    EUR-0.51% 0.36%2.15%0.07%-0.12%0.66%0.97%
    GBP-0.85%-0.36% 1.59%-0.28%-0.47%0.31%0.60%
    JPY-2.52%-2.15%-1.59% -2.01%-2.09%-1.52%-1.03%
    CAD-0.49%-0.07%0.28%2.01% -0.15%0.59%0.89%
    AUD-0.30%0.12%0.47%2.09%0.15% 0.79%1.08%
    NZD-1.09%-0.66%-0.31%1.52%-0.59%-0.79% 0.28%
    CHF-1.40%-0.97%-0.60%1.03%-0.89%-1.08%-0.28% 

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

    • Asia-Pacific:
      • Australia: The Judo Bank Composite PMI dipped to 49.9 in December from 50.2 in November, signaling a contraction in business activity.
      • China: Retail Sales rose 3% year-over-year in November, falling short of the 4.6% growth expected by markets. Despite last week’s small losses, AUD/USD remains steady above 0.6350 in early Monday trading.
    • Europe:
      • EUR/USD: The Euro reversed its five-day losing streak on Friday and is holding modest gains above 1.0500 on Monday. ECB President Christine Lagarde’s speech during European trading hours will be closely monitored for insights into the central bank’s policy outlook.
      • GBP/USD: After hitting its lowest level since late November near 1.2600 on Friday, GBP/USD is staging a technical rebound toward 1.2650 early Monday.
    • Japan: USD/JPY maintained its bullish momentum, gaining over 2% last week. The pair is consolidating around 153.50 on Monday. Jibun Bank data showed an improvement in both Manufacturing PMI (49.5 vs. 49.0) and Services PMI (51.4 vs. 50.5) in December.

    Commodities

    • Gold (XAU/USD): Gold faced significant selling pressure late last week, registering sharp losses on Thursday and Friday. On Monday, it is trading slightly above $2,650, holding steady as investors await key economic data and central bank decisions.

    Looking Ahead

    This week’s focus will center on central bank actions:

    • Federal Reserve: Monetary policy decisions and the SEP release on Wednesday.
    • ECB, Bank of England (BoE), and Bank of Japan (BoJ): Policy meetings and updates later in the week.
    • Key Data Releases: Flash PMIs from the US, Eurozone, UK, and Germany on Monday, offering an early glimpse into December’s economic activity.

    Markets remain on edge as traders prepare for potential surprises from these critical events, which will likely set the tone for currency and commodity trends heading into the end of the year.