📈 Market Report.
📊 Yesterday, the U.S. consumer price index (CPI) showed a 12-month inflation rate of 2.7% in November, up from 2.6% in October. This aligns with market forecasts and solidifies expectations for a 25 basis point interest rate cut by the Federal Reserve at its policy meeting next week. Although inflation has decreased from its 40-year high in mid-2022, it remains above the Fed’s 2% target.
🏦 Today the ECB and the SNB will decide on their interest rates.
🇨🇭 The Swiss National Bank (SNB) Chairman Martin Schlegel said the central bank will reintroduce negative interest rates if necessary to weaken the Swiss franc and dampen investor appetite for the safe-haven currency. The comments weakened the Swiss franc against the dollar and euro, as investors anticipated more rate cuts from the SNB in the future.
🇪🇺 In Europe, traders view a 15% chance of a half-point drop as a significant danger, despite the ECB’s conventional quarter-point decrease as the most likely scenario. Inflation remains a concern, but European central bankers must balance an economy on the verge of recession. Uncertainty is heightened by U.S. tariffs and political unrest in Germany and France.
🏠 The UK housing market strengthened further in November, according to a survey from the Royal Institution of Chartered Surveyors (RICS). Mortgage lenders Nationwide and Halifax also reported a sharp pickup in house prices during November, and Bank of England data showed increased mortgage approvals for house purchases in October. Less pressure for rate cuts in Uk with these data.
🛢️ OPEC has reduced its 2024 global oil demand growth forecast by 210,000 barrels per day, resulting in a 1.61 million bpd increase in 2024. This is the largest reduction since the previous forecast of 1.82 million bpd. The 2025 growth estimate was also reduced to 1.45 million bpd from 1.54 million bpd. The revision is attributed to bearish data from China, India, Asian countries, the Middle East, and Africa. OPEC+ has delayed its plan to raise output until April 2025 due to falling oil prices. OPEC’s latest demand forecasts are still towards the higher end of industry estimates, but the cuts in the last few months have brought the group’s view closer to the much lower projections of the International Energy Agency (IEA).
🇧🇷 Brazil’s central bank raised interest rates by 100 basis points and plans to follow similar hikes in the next two meetings. The decision comes amid a shift to a new governor and a tight labor market. The benchmark borrowing rate could soar to 14.25% as early as March, a record high.
📉 Market Review:
🔝 US futures rebounded again, possibly driven by an inflation rate that came in in line with expectations, paving the way for further rate cuts. Mini S&P 500 futures reached 6,100 points, but have since retreated slightly to 6,085 points. The Nasdaq 100 reached a new all-time high of 21,800 points and is currently trading at 21,761 points.
💹 Interestingly, the dollar index has shown little movement, retreating slightly below 106.50 points, currently trading at 106.40 points. The EUR/USD has therefore failed to make progress in its attempt to reach the 1.06 level that could trigger an upward move. Currently, the pair is at 1.0523.
📈 In Europe, the DAX 40 is near all time highs, fully discounting today’s expected rate cut by the ECB. The DAX 40 is currently trading at 20,400 points. Similarly, the EuroStoxx 50 is not far from 5,000 points and currently stands at 4,970 points.
🛢️ Brent crude oil has continued to climb towards levels close to 74 dollars, although it is about to confirm a bearish continuation, more in line with the general trend of the last two months. In the NEWS section we have commented that OPEC is lowering its global demand forecasts.
🥇 Gold continues to advance in line with the forecasts we gave after the upward break of the wedge formed in October. Gold currently stands at $2,750 per ounce.
💰 Bitcoin, meanwhile, has broken back above $100,000, which could indicate a consolidation above these levels.
🗣️ Geopolitics:
🇫🇷 French President Emmanuel Macron and Polish Prime Minister Donald Tusk are set to discuss sending European troops for a peacekeeping mission to Ukraine once a ceasefire is reached. Zelenskyy raised the risk of a frozen conflict with Russia and pressed for security guarantees from Western allies. Trump has pledged to deliver a swift resolution to the conflict. The peacekeeping mission would deter a renewed Russian invasion, rather than deploying Western troops to the active battlefield.
🇭🇺 Hungarian Prime Minister Viktor Orban held talks with Russian President Vladimir Putin, discussing ways to resolve the Ukraine conflict. Orban has made contacts with Donald Trump on the matter. Hungary’s rotating presidency in the European Union has upset EU and NATO allies with Orban’s “peace missions” related to the conflict. Despite concerns, Orban continues to position himself as a mediator.
🌍 Global media portrays the ‘moderate’ HTS as a Syrian liberation army, despite reports suggesting it is not a Syrian entity but a coalition of multiple jihadist groups. Social media images suggest public executions of minorities in Syria, and the group is still listed as a terrorist by multiple international organizations.
