Morning Brew December 12 2024

Good morning,

The US CPI came with no surprise yesterday, providing little insights, the market reaction was a bit strange to be honest. Traders are now certain we will see a cut by 25 basis points next week, at he same time longer yields rose. US 10 Years are at 4.27, the USD Index 106.55.

The SNB is seen to cut 25 BPS with a probability of 55%, up from 45% yesterday. The remaining 45% are in favor or a 50 BPS cut.  The rate in December 25 is seen at around 0, that is likely to be the figure to watch – are traders expecting negative rates next year on not. Economists polled by Retuers are 90% certain of a 25BPS cut  The decision is expected at 9:30 CET.

EURCHF is 0.9286 and USDCHF 0.8835.

The ECB is nearly certain to cut by 25 BPS and seen to deliver 6 cuts in the next 12 months – that is the benchmark to watch. The key factor is likely to be Lagarde’s speech EURUSD is 1.0512, GER40 20400

As expected the Bank of Canada cut rate by 50 Basis points yesterday but tones were a little hawkish, the Loonie rose, currently we are trading 1.4144

Equities traded a little mixed yesterday with the Dow a little in minus but the S&P and Nasdaq strong on Tech. Google rose 5% on the new Chip, Tesla 6% likely caused by GM exiting the self driving space, Nvidia 3%, the driver is a little unclear, possibly related to increased hiring in China. The US500 is trading at 6075, the USTech 100 NAS is at 21721, Tesla reached an all time high at 424, Google

Gold and Silver are friendly at 32.15 and 2718, Bitcoin is back above 100k.

Expect an interesting trading day, trade safely

Thursday
- Data AU Employment Data, Sweden CPI, Swiss Rate Decision, ECB Rate Decision, Initial Jobless Claims,
Friday
- Data Japan Tankan,  France CPI,

Expiries in GMT:

FPZ4 will expire on 11/dec at 1600 hrs
JGB1Z4 will expire on 12/dec at 1600 hrs
Currency Futures 13/dec at 1600 hrs

Expiring CFDs

GASOILUKDEC24 will expire on 10/dec at 1600 hrs
USDINDEXDEC24 will expire on 12/dec at 1600 hrs
EMISSIONSDEC24 will expire on 12/dec at 1600 hrs