The dollar is set for a new growth momentum

The US dollar methodically gained ground over the week. The DXY rose for six consecutive sessions, gaining 1.3% on the back of macroeconomic data. Neutral inflation readings provided the latest leg of gains. Consumer prices rose in line with average forecasts, up 2.7% headline and 3.3% excluding food and energy. Markets reasoned that this would not prevent a Fed rate cut next week.

At the same time, expectations of aggressive rate cuts are fading in the outlook for next year, which is what drives markets most. In addition to a strong labour market, producer prices also have an impact. The PPI growth rate has risen to 3%, the highest since February 2023. Core inflation, at 3.4% y/y, is accelerating through 2024.

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U.S. indices divergence

The dollar's rise in the latest week weighed on the Dow Jones and Russell 2000 indices, which fell 2.8% and 4.8%, respectively, from their recent highs. However, the Nasdaq100 was boosted by the success of the high-tech giants. This index approached 21800, moving further into all-time high territory.

This kind of divergence is not sustainable. This means that in the next week or two, we will either see an acceleration in the Russell and Dow or a correction in the S&P500 and Nasdaq100. A rising dollar argues for the second scenario, but the Fed's comments could dramatically change sentiment.

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What is next: The Final Storm Before Calm

The new week may serve as the market's final crescendo before a gentle lull sets in for the remainder of the year. Meanwhile, the significance of the latest batch of macroeconomic data cannot be overstated.

Monday's preliminary PMI business activity estimates for Europe offer the last chance for the region to end the year on a positive note. November's data was a disappointment, sending EURUSD below 1.05 at one point and showing an acceleration in the decline of business activity in the Eurozone. The ECB is taking a cautious approach to rate cuts, but the weak data has seen the Euro fall against the Dollar as traders are pricing in 4 ECB rate cuts over the next six months versus 2-3 for the Fed.

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#Shorts
#Gold: a growing correction

USDJPY Wave Analysis 13 December 2024

- USDJPY reversed from support zone

- Likely to rise to resistance level 156.35

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EURGBP Wave Analysis 13 December 2024

- EURGBP reversed from support zone

- Likely to rise to resistance level 0.8350

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🗓 Economic Calendar at 2024/12/16 (GMT)

02:00 🇨🇳 Fixed Asset Investment — Exp: 3.5% Actual: 3.3%

02:00 🇨🇳 Industrial Production — Exp: 5.4% | 5.7% Actual: 5.4% | 5.8%

02:00 🇨🇳 NBS Press Conference

07:00 🇪🇺 ⚡️ ECB President Christine Lagarde Speaks

08:15 🇪🇺 ⚡️ ECB President Christine Lagarde Speaks

08:15 🇫🇷 Manufacturing PMI — Exp: 43.2 Actual: 41.9

08:15 🇫🇷 Services PMI — Exp: 46.9 Actual: 48.2

08:15 🇫🇷 PMI Composite — Exp: 47.0 Actual: 46.7

08:30 🇩🇪 Manufacturing PMI — Exp: 43.1 Actual: 42.5

08:30 🇩🇪 Services PMI — Exp: 49.5 Actual: 51.0

08:30 🇩🇪 PMI Composite — Exp: 48.0 Actual: 47.8

09:00 🇪🇺 Manufacturing PMI — Exp: 45.3 Actual: 45.2

09:00 🇪🇺 Services PMI — Exp: 49.5 Actual: 51.4

09:00 🇪🇺 PMI Composite — Exp: 48.2 Actual: 49.5

09:30 🇬🇧 Manufacturing PMI — Exp: 48.4 Actual: 47.3

09:30 🇬🇧 Services PMI — Exp: 50.9 Actual: 51.4

09:30 🇬🇧 PMI Composite — Exp: 50.0 Actual: 50.5

13:30 🇺🇸 Empire State Manufacturing Index — Exp: 6.4 Actual: 0.2

14:45 🇺🇸 Manufacturing PMI — Exp: 49.4 Actual: 48.3

14:45 🇺🇸 Services PMI — Exp: 55.7 Actual: 58.5

14:45 🇺🇸 PMI Composite — Exp: 54.4 Actual: 56.6

20:35 🇨🇦 ⚡️ BOC Governor Tiff Macklem Speaks


[Updated in real time]

Bitcoin has overcome selling resistance

The cryptocurrency market hit record highs in terms of capitalisation, reaching $3.73 trillion at the start of active Asian trading and is sitting at $3.71 trillion at the time of writing. The market digested the overhang of pending selling in Bitcoin near psychologically important levels and continued to move higher.

Bitcoin gained about 3% over the past day, slightly outperforming the broader market. The move into all-time high territory, including this morning's push above $106K, confirms the bullish bias. This is especially important after a three-week consolidation near the $100K level. An acceleration in growth is now likely if unexpected news from the traditional financial markets doesn't stop this rally.

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Oil: the final test of the year

The price of a barrel of WTI crude oil fell by 0.7% and was in danger of falling below $70. OPEC+ helped overcome this level at the end of last week. As predicted by observers, the cartel postponed the 'voluntary' increase in production by key members for another quarter.

OPEC+'s actions look like an attempt to prevent the price from spiralling downwards. Mere signals of a breakdown in cartel unity may be enough for prices to collapse. This creates a trap for large producers that are bound by production commitments, as they lose their market share, most worryingly to the US.

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#Shorts

#DXY: Growth into 2025

🗓 Economic Calendar at 2024/12/17 (GMT)

07:00 🇬🇧 Claimant Count Change — Exp: 28.2K Actual: 0.3K

07:00 🇬🇧 Unemployment Rate — Exp: 4.3% Actual: 4.3%

07:00 🇬🇧 Average Earnings Index — Exp: 4.6% | 5.0% Actual: 5.2% | 5.2%

09:00 🇩🇪 Ifo Business Climate — Exp: 85.5 Actual: 84.7

09:00 🇩🇪 IFO - Current Assessment — Exp: 84.0 Actual: 85.1

09:00 🇩🇪 IFO - Expectations — Exp: 87.5 Actual: 84.4

10:00 🇩🇪 ZEW Economic Sentiment — Exp: 6.8 Actual: 15.7

10:00 🇩🇪 ZEW Survey (Current Situation) — Exp: -92.6 Actual: -93.1

10:00 🇪🇺 ZEW Economic Sentiment — Exp: 12.2 Actual: 17.0

13:30 🇨🇦 ⚡️ Consumer Price Index — Exp: 0.1% | 2.0% Actual: 0.0% | 1.9%

13:30 🇨🇦 Core CPI — Exp: 0.4% | 1.7% Actual: -0.1% | 1.6%

13:30 🇨🇦 Common Core CPI — Exp: 2.1% Actual: 2.0%

13:30 🇨🇦 Median Core CPI — Exp: 2.4% Actual: 2.6%

13:30 🇨🇦 Trimmed Core CPI — Exp: 2.6% Actual: 2.7%

13:30 🇺🇸 ⚡️ Retail Sales — Exp: 0.6% | 0.4% Actual: 0.7% | 0.2%

14:15 🇺🇸 Industrial Production — Exp: 0.3% Actual: -0.1%


[Updated in real time]

AUDUSD Wave Analysis 16 December 2024

- AUDUSD reversed from support zone

- Likely to rise to resistance level 0.6400

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USDCAD Wave Analysis 16 December 2024

- USDCAD reversed from support zone

- Likely to rise to resistance level 0.6400

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EURGBP Wave Analysis 17 December 2024

- EURGBP reversed from resistance level 0.8300

- Likely to fall to support level 0.8225

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Apple Wave Analysis 17 December 2024

- Apple rising inside impulse wave 3

- Likely to reach resistance level 260.00

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🗓 Economic Calendar at 2024/12/18 (GMT)

07:00 🇬🇧 ⚡️ Consumer Price Index — Exp: 0.1% | 2.6% Actual: 0.1% | 2.6%

07:00 🇬🇧 Core CPI — Exp: 3.6% Actual: 3.5%

07:00 🇬🇧 Retail Price Index — Exp: -0.1% | 3.7% Actual: 0.1% | 3.6%

07:00 🇬🇧 Producer Price Index Input — Exp: 0.2% | -2.5% Actual: 0.0% | -1.9%

13:30 🇺🇸 Building Permits — Exp: 1430K | 1.3% Actual: 1505K | 6.1%

13:30 🇺🇸 Housing Starts — Exp: 1350K | 2.3% Actual: 1289K | -1.8%

15:30 🇺🇸 Crude Oil Inventories — Exp: -1600K Actual: -934K

19:00 🇺🇸 ⚡️ FOMC Rate Decision — Exp: 4.50% Actual: 4.50%

19:00 🇺🇸 ⚡️ FOMC Statement

19:00 🇺🇸 ⚡️ FOMC Economic Projections

19:30 🇺🇸 ⚡️ FOMC Press Conference

21:45 🇳🇿 ⚡️ Gross Domestic Product — Exp: -0.2% | -0.4%


[Updated in real time]

🗓 Economic Calendar at 2024/12/19 (GMT)

00:00 🇳🇿 ANZ Business Confidence — Exp: 60.0 Actual: 62.3

00:00 🇦🇺 MI Inflation Expectations — Exp: 3.5% Actual: 4.2%

02:52 🇯🇵 ⚡️ Overnight Call Rate — Exp: 0.25% Actual: 0.25%

02:52 🇯🇵 ⚡️ Monetary Policy Statement

06:30 🇯🇵 ⚡️ BOJ Press Conference

12:00 🇬🇧 ⚡️ Bank of England Interest Rate Decision — Exp: 4.75% Actual: 4.75%

12:00 🇬🇧 ⚡️ MPC Official Bank Rate Votes — Exp: 0-2-7 Actual: 0-3-6

12:00 🇬🇧 ⚡️ Monetary Policy Summary

13:30 🇺🇸 ⚡️ Unemployment Claims — Exp: 229K Actual: 220K

13:30 🇺🇸 Continuing Claims — Exp: 1890K Actual: 1874K

13:30 🇺🇸 Gross Domestic Product — Exp: 2.8% Actual: 3.1%

13:30 🇺🇸 Philly Fed Manufacturing Index — Exp: 2.9 Actual: -16.4

15:00 🇺🇸 Existing Home Sales — Exp: 4.09M | 1.0% Actual: 4.15M | 4.8%

21:45 🇳🇿 Trade Balance — Exp: -1951M

23:30 🇯🇵 ⚡️ National Consumer Price Index — Exp: 2.5%

23:30 🇯🇵 National Consumer Price Index Ex-Fresh Food — Exp: 2.6%


[Updated in real time]