Morning Brew November 25 2024

Good morning,

We are heading into a special week with a load of key data, expiries of futures, Thanksgiving, and Black Friday, politics continue to impact markets as well.

The US holiday shifts normal schedules, with the FOMC Minutes released on Tuesday, Initial Jobless Claims on Wednesday, and the US PCE released at 16:00 CET on Wednesday. There was huge volatility in FX after data from Germany, the UK, and the EU disappointed. The pound tumbled as British business output in November shrank for the first time in more than a year, and retail sales disappointed. The euro traded as low as 1.0338, pushing the USD Index above 108.

Over the weekend, the selection of Scott Besset as US Treasury Secretary caused yields to fall and the USD to follow. He is seen as a fairly mainstream candidate without extremist views. His stated goals are to limit the budget deficit to 3% of GDP, achieve 3% GDP growth, and sell an additional 3 million barrels of oil daily. US 10-year yields are currently at 4.32, and the USD Index is at 106.92.

The Swiss National Bank said on Friday that it could reintroduce negative interest rates if necessary. EUR/CHF gained 0.3% and USD/CHF 0.8%.

Gold prices broke above the $2,700 threshold for the first time in over two weeks to close at 2715, while silver was at 31.30. On Friday, overnight, both suffered massive sell-offs to 30.70 and 2666. As the USD weakens and oil falls only moderately on the Besset nomination, I suspect the upcoming expiry of the December contracts as the main culprit. Bitcoin failed to breach the 100k mark so far, with BTC now at 98140.

The Dow rose 0.97%, the S&P 0.35%, and the Nasdaq 0.16%. On the week, the large US indexes rose nearly 2%. This morning, equities are risk-on again, with the GER40 seen at 19400, the S&P 500 at 5992, and the US Tech 100 NAS at 20881.

We have seen quite a shift in interest rate expectations. The Fed is now almost 50/50 between a 25 basis point cut and no action, while the ECB is 60/40 for a 50 bps cut in December. This morning, China injected $124.3 billion into the banking system, showing concern about the state of the Chinese economy.

Monday

- Data  Japan Leading Indicator, Germany IFO Index

• G7 meet
  Earnings: Splash, Zoom,

Tuesday
- Data Japan PPI, US Consumer Confidence FED Minutes,
Earnings: Abercrombie&Fitch, Kohl, Best Buy, Macy`s Dick`s Dell, Crowdstrike, Workday, Autodesk, HP,

Wednesday
- Data Australia CPI & Rate Decision, US Durable Goods, Initial Jobless claims, PCE 16:00 CET

Thursday
- Data EU Consumer Confidence, DE CPI, Thanksgiving

Friday
- Data Japan Unemployment Rate, France GDP & CPI. Swiss KOF, EU HICP, Canada GDP, Black Friday

Expiries In GMT

NGZ4 will expire on 26/Nov at 2030 hrs
FLGZ4 will expire on 28/Nov at 1600 hrs
TTFMZ4 will expire on 28/Nov at 1000 hrs
GCZ4 will expire on 29/Nov at 1600 hrs
MGCZ4 will expire on 29/Nov at 1600 hrs
HGZ4 will expire on 29/Nov at 1600 hrs
KEZ4 will expire on 29/Nov at 1600 hrs
SILZ4 will expire on 29/Nov at 1600 hrs
SIZ4 will expire on 29/Nov at 1600 hrs
TNZ4 will expire on 29/Nov at 1600 hrs
UBZ4 will expire on 29/Nov at 1600 hrs
ZTZ4 will expire on 29/Nov at 1600 hrs
ZWZ4 will expire on 29/Nov at 1600 hrs