January 6, 2025
As we embark on the first full trading week of 2025, investors are approaching the markets with a sense of cautious optimism. This week presents a dynamic blend of significant economic data, corporate announcements, and geopolitical developments, all of which are poised to shape market sentiment in the days ahead.
KEY ECONOMIC INDICATOR
Incoming President’s inauguration:
- The week of January 6, 2025, is set to feature a significant political event: the inauguration of the newly elected U.S. President.
- Policy expectations: Markets will closely analyze the new President’s economic agenda. Plans related to fiscal stimulus, tax policies, infrastructure spending, and climate initiatives could trigger sector-specific movements.
- Interest rate speculation: The new administration’s stance on inflation and fiscal spending may influence Federal Reserve policy expectations, particularly if aggressive spending plans are anticipated.
U.S. job market in focus:
- Crude the highlight of the week will be Friday’s U.S. Nonfarm Payrolls (NFP) report for December.
- This crucial data will provide insights into the labour market’s health, influencing Federal Reserve policy expectations. Markets are also watching Wednesday’s ADP Employment Change report as a precursor to the NFP release.
Inflation and interest rate speculation:
- Inflation remains a hot topic, with markets speculating on whether the Federal Reserve will make any rate adjustments in the coming months.
- The consumer credit report, scheduled for Tuesday, could offer clues about consumer spending and borrowing trends, further shaping interest rate outlooks.
There are several economic events happening this coming week, the most notable one being the Inauguration of President-elect Donald J. Trump.
MARKET MOVER
EUR/USD
Preferred short preference
Short positions below 21027.50 with targets at 20950.90 & 20824.60 in extension.
Alternative scenario
Above 21268.60 look for further upside with 21329.90 & 21425.60 as targets.
The index currently faces a challenging resistance area at 21027.50
XAU/USD
Potential long preference
Long positions above 2658.48 with targets at 2672.52 & 2690.06 in extension.
Alternative scenario
Below 2635.68 look for further downside with 2623.40 & 2610.82 as targets.
The RSI is mixed with a bullish bias.
MARKET NEWS
Dollar on track for best week since early November
- The dollar dipped on Friday but was on track for its strongest weekly performance since early November on expectations that the U.S. economy will continue to outperform its peers globally this year and that U.S. interest rates will stay relatively higher.
- New policies under the incoming Donald Trump administration, including business deregulation, tax cuts, curbs on illegal immigration and tariffs, are also expected to boost growth and add to price pressures.
- The dollar index was last down 0.16% on the day 109.04, after hitting a two-year high of 109.54 on Thursday.
- It is on track for a weekly gain of 0.94%.
Gold slips from three-week high as strong dollar weighs
- Gold prices retreated from a three-week high on Friday, pressured by a robust dollar, while markets braced for potential economic and trade shifts under U.S. President-elect Donald Trump.
- Spot gold eased 0.3% to $2,649.29 an ounce after hitting its highest level since Dec. 13.
- Bullion is up about 1.1% for the week so far.
- U.S. gold futures were down 0.2% at $2,663.70.
Oil set for weekly gains as market eyes U.S. and Chinese policy support
- Oil prices changed a little on Friday and were poised for weekly gains after closing at their highest in more than two months in the previous session, underpinned by expectations of further economic stimulus in China and lower U.S. interest rates.
- Brent crude futures were down 7 cents at $75.86 a barrel by 0900 GMT after settling at the highest level since Oct. 25 on Thursday.
- U.S. West Texas Intermediate crude dipped by 6 cents to $73.07, with Thursday’s close its highest since Oct. 14.
- Brent was on track for a 2.2% weekly gain, while WTI was set for a 3.5% increase.
Click here to open account and start trading.
