Market Comment: November 12, 2024
Today there’s mixed signals across major currencies. The USD holds steady against most peers. Data from the UK and Germany is in focus. UK unemployment shows slight upticks. Steady German inflation figures shape the tone. Commodity prices are reacting to global demand forecasts. This is especially true for oil and natural gas. Meanwhile, metals like gold and silver face pressure from a stronger dollar.
Key Data Out Today
- Germany’s Inflation Rate remained steady at 0.4% MoM for October and 2.0% YoY, aligning with forecasts.
- UK Unemployment Rate rose slightly to 4.3%, which may increase concerns about the UK’s economic stability.
- ZEW Economic Sentiment Index for the Euro Area and Germany indicated slight optimism. However, it was below expectations. This result kept the euro under some pressure.
- U.S. Federal Reserve Speeches today from Waller, Barkin, Kashkari, and Harker are likely to provide insights into future monetary policy direction. These insights will keep the USD in focus.
Energy & Precious Metals
- Crude Oil prices remained near $68 for WTI and $72 for Brent, with minimal movement this morning. Supply concerns persist, but demand outlook remains cautious.
- Natural Gas saw an increase of 0.7%, currently at $2.94/MMBtu, driven by recent cooler temperatures and forecasts suggesting higher demand for heating.
- Gold dropped 0.88% to $2,600.81 as the dollar strengthened, making gold less attractive.
- Silver also slipped 1.59%, with broader market pressures on metals due to a stronger USD and uncertainty about global growth.
Currency Movements
- EUR/USD saw a slight drop of 0.34% to 1.0627, pressured by mixed sentiment following Germany’s economic data. The ZEW Economic Sentiment Index for the Euro Area and Germany came in softer, affecting the euro.
- GBP/USD declined by 0.53% to 1.2805 as UK unemployment data showed a slight uptick to 4.3%, signaling potential challenges for the British economy.
- AUD/USD fell 0.45% to 0.6549 amid concerns around global growth and reduced demand for commodities.
- NZD/USD also slipped by 0.27% to 0.5953.
- USD/JPY rose by 0.23% to 153.87, with the yen weakening due to ongoing inflation concerns in Japan.
- USD/CNY increased 0.38% to 7.2513, with the yuan pressured by weaker domestic sentiment and a rise in COVID cases.
- USD/CHF climbed 0.21% to 0.8822 as demand for the dollar remained steady amid uncertain global outlooks.
- USD/CAD edged up by 0.24% to 1.3953, as Canadian employment data last week showed modest strength but not enough to counteract the greenback.
- USD/MXN and USD/INR both showed minor gains against their respective currencies, with USD/MXN at 20.44 (up 0.43%) and USD/INR at 84.41 (up 0.01%).
Things to Keep a Watch On:
- Fed Speeches: Several speeches from Fed officials are expected today, including Waller, Barkin, Kashkari, and Harker. Investors will be listening for insights into future policy direction, especially after recent rate decisions.
- UK Employment Data: The UK unemployment rate is ticking up slightly. Markets are watching for any further signs of labor market weakness. This could influence the Bank of England’s future monetary policy decisions.
- German ZEW Economic Sentiment: The ZEW index measures economic outlook. It is critical for both Germany and the Euro Area. This index gauges business confidence in the region amid global uncertainties.
- Commodity Price Movements: Crude oil prices have softened recently. Any shifts in energy prices may impact inflation expectations. These changes can affect economic sentiment globally, particularly in energy-reliant sectors.
- US Consumer Inflation Expectations: Inflation remains a key factor in the Fed’s decisions. Analysts will closely observe consumer inflation expectations. They will look for any indication of rising or easing inflation pressures.
- Currency Pairs Reacting to Data: Watch for movements in EUR/USD and GBP/USD as the European and UK economic data unfolds. Also, keep an eye on USD/JPY. US bond yields might potentially impact this pair.
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