As December begins, Monday, 2 December 2024, sets the stage for a critical month in the markets, focusing on economic data, monetary policy expectations, and global growth signals.
Monday’s session is likely to start with cautious optimism as traders react to global manufacturing data and early consumer spending trends. Key sectors to watch include manufacturing, retail, and energy.
KEY INDICATORS
Central Bank outlook
With key central bank meetings scheduled later in December, markets will position for updated policy guidance from the Federal Reserve, ECB, and others.
Any commentary from Fed officials ahead of the blackout period will be closely analysed.
Global manufacturing PMI data
Eurozone US ISM manufacturing PMI: The release of November’s PMI will be a key highlight, offering insights into the health of the manufacturing sector and business sentiment amid elevated interest rates.
Eurozone manufacturing PMI: Final readings will shed light on regional economic activity, with implications for sectors like industrials and materials.
China’s economic pulse
Investors will digest China’s official and Caixin manufacturing PMI data, released over the weekend.
These figures will provide a clearer picture of recovery momentum or continued slowdown, impacting global markets, particularly commodities and Asian equities.
Fundamental indicators scheduled for this week that can start shaping the end of year behaviour in the markets and dictate the start of the new year based on the speculative figures and reports pending their release.
MARKET MOVERS
EUR/USD
Possible short preference Short positions below 1.05016 with targets at 1.04788 & 1.04592 in extension. Alternative scenario Above 1.05354 look for further upside with 1.05696 & 1.05949 as targets. The break below 1.05016 is a negative signal that has opened a path to 1.04788.
Dollar faces crunch week for US rates, yen holds gains
The dollar started in a cautious mood on Monday in what is shaping up to be a critical week for the prospect of US rate cuts, while the yen’s recent rebound was underpinned by wagers on rising rates at home.
Markets now imply a 56% chance that the BOJ will hike by a quarter point to 0.5% at its policy meeting on 18-19 December.
The risk of an early hike was enough to keep the dollar pinned at 149.60 yen, having shed 3.3% last week in its worst run since July.
The euro held at USD 1.0555, after bouncing 1.5% last week and away from a one-year trough of USD 1.0425.
The dollar index was flat at 105.790, having closed out November with a gain of 1.8%, even after last week’s setback.
The jobless rate is seen edging up to 4.2%, from 4.1%, which should keep the Federal Reserve on course to cut by 25 basis points on 18 December.
Commodities price change over DoD, MoM and YoY period. Up to date
XAU/USD
Possible short preference Short positions below 2629.73 with targets at 2622.93 & 2613.10 in extension. Alternative scenario Above 2653.15 look for further upside with 2662.27 & 2673.01 as targets. As long as the resistance at 2653 is not surpassed, the risk of the break below 2629.73 remains high.
TODAY’S NEWS HEADLINES
Gold falls on firmer US dollar, profit-taking; key US data in focus
Gold prices snapped a four-session rally to fall on Monday, pressured by a firmer US dollar and profit-taking, while investors awaited key US economic data for cues on the Federal Reserve’s monetary policy outlook.
Spot gold fell 0.7% to USD 2,636.38 per ounce, as of 2:04 AM GMT.
US gold futures edged 0.8% lower to USD 2,658.80.
Spot silver shed 0.7% to USD 30.39 per ounce.
Platinum fell 0.2% to USD 944.20.
Palladium dropped 0.3% to USD 975.44.
Oil inches up on upbeat China data, shaky Israel-Lebanon ceasefire
Oil prices edged up on Monday, supported by upbeat factory activity in the world’s second-largest oil consumer, China, and as Israel resumed attacks on Lebanon despite a ceasefire agreement, stoking tensions in the Middle East.
Brent crude futures climbed 8 cents, or 0.1%, to USD 71.92 a barrel by 1:07 AM GMT.
US West Texas Intermediate crude was at USD 68.09 a barrel, up 9 cents, or 0.1%.
Prices rose after an official survey showed that China’s factory activity expanded modestly for a second straight month in November, suggesting a blitz of stimulus is finally trickling through just as Donald Trump ramps up his trade threats.
European stocks turn higher; Stellantis falls 8% to more than two-year low after CEO resigns
The regional Stoxx 600 reversed an earlier decline to trade 0.3% higher by 11:13 a.m. London time, after the index closed out November with its strongest monthly performance since August.
France’s CAC 40 index remained in the red, down 0.4%, as investors monitored ongoing political volatility in the country.
