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Erik Schafhauser Zürich

Morning Brew December 17 2024

Morning Brew 1 minute to read
Erik
Erik Schafhauser

Senior Relationship Manager

Good morning,

We are approaching the last US Rate decision this year and the last one under President Biden. A 25 basis point cut is pretty much done and dusted at 96% probability but many are expecting a hawkish cut – implying the path may be not as hawkish as thought. Please find Charu`s preview here: Fed Preview: Rate Cut on Deck, But With 2025 Caution

- Donald Trump lost a bid to overturn his criminal conviction for paying  hush money to Stormy Daniels but Softbank announced it would invest USD100 Bio in the US in the next 4 years at a press conference with Donald Trump

China reportedly agreed last week to raise the budget deficit to 4% of gross domestic product

Even in Germany, stocks are becoming more trusted, 25% of Germans believe stocks to be the most trustworthy investment. That is quite a change and will lead to a constant flow into equities going forward in either ETF or direct investments.

The Vote of non-confidence  against Chancellor Scholz went as planned, in two months we will see new elections in Germany.

Canada`s finance minister quit yesterday after disagreements with Justin Trudeau.

Markets are fairly quiet, the Dow stayed on it`s losing streak at -0.25%, big Tech held up the S&P 500  and the Nasdaq up 0.4% and 1.25%, Tesla added more than 6% and has more than tripled from the Low in May. is Google gained 3.6%.  Despite there being little news, volumes were massive at 15 billion against an average of 14 billion.

EURUSD is at 1.05 as the US 10 Year Yields remain near the important technical resistance at 4.40, the key this week will be the question if that resistance will hold or if the US rate decision and the PCE push it higher., that would boost the USD and could be the catalyst for a strong move that many traders expect. A less hawkish Fed and weaker data could do the opposite.

Today, watch the Euro and the Dax with the  IFO and ZEW Indexes, later in the day, the US Retail sales will be important.

Tuesday
-  Data  UK Employment data, DE IFO Index. ZEW, US Retail Sales & Industrial Production Canada CPI
Wednesday
- Data Japan Trade Balance, UK CPI, US Rate Decision
Thursday
- Data BOE Rate decision, US GDP, Initial Jobless Claims
Friday
- Data China Rate decision US PCE

 

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