Morning Brew December 5 2024

Good morning,

I will not be in the office for the next two days. Below are the key data releases until Tuesday:

• Bitcoin has breached the 100k mark and, according to many technical analysts, seems to have room to reach 120k.
• The Dow, as a CFD, is trading above 45k for the first time.
• The DAX is holding above 20k, and the S&P is approaching 6100, while yields have remained relatively unchanged.
• Despite the French government collapsing yesterday, the Euro remains stable at 1.0525 against the USD. Gold and silver are also stable at 2648 and 31.25, respectively.

Jerome Powell mentioned that the economy performed better than expected in September. We are currently seeing a 70% chance of a 25 basis point rate cut by the Fed in December. Next week, the Royal Bank of Australia is expected to take no action, while the Bank of Canada is anticipated to cut by 25 basis points. The Banco do Brasil is the outlier, with an expected hike of 75 basis points. The ECB is expected to cut by 25 basis points, and the SNB by 50 basis points.

It seems the Christmas rally is in full swing, driven more by technical factors and FOMO than by fundamentals. If you are a trader, consider your risk and exit levels and watch closely for shifts in sentiment. Many argue that we are in a bubble, particularly concerning large tech companies. However, even if that is true, it's unclear when a bubble might burst, and betting on it could be costly.

Throughout the day, there will be several secondary PMI releases. While they typically do not cause significant market movements, a substantial miss in expectations could be important. The key event will be tomorrow’s labor data from the US, which is a crucial input for the next rate decision. The Nonfarm Payroll is expected to be at 200k, with the unemployment rate at 4.2%.

Thursday
- Data German Industrial Orders, US  Initial Jobless Claims,

Friday
- Data De Industrial Output, EU GDP, US Nonfarm Payroll, University of Michigan Consumer confidence.

Monday
- Data  China CPI&PPI

Tuesday
- Data  DE Inflation DK, NO CPI, China trade balance

Physically Settled Futures (GMT)

LEZ4 will expire on 9/dec at 1600 hrs
FOATZ4 will expire on 6/dec at 1600 hrs
FGBXZ4 will expire on 6/dec at 1600 hrs
FGBSZ4 will expire on 6/dec at 1600 hrs
FGBMZ4 will expire on 6/dec at 1600 hrs
FGBLZ4 will expire on 6/dec at 1600 hrs
FBTSZ4 will expire on 6/dec at 1600 hrs
FBTPZ4 will expire on 6/dec at 1600 hrs
CZ4 will expire on 6/dec at 1000 hrs
CONFZ4 will expire on 6/dec at 1000 hrs