Market movers ahead
- We expect the focus to remain on oil price development and Russia over the comingweeks.
- In the US, we estimate PCE core inflation was 1.5% y/y in November: The labourmarket report for December is due to be released in the first week of January.
- In the euro area, we expect headline HICP for December to decline to negativeterritory at -0.1% y/y, while core inflation should remain unchanged at 0.7% y/y.
- The third and final round of the Greek presidential election is scheduled for 29December.
- Danish FX reserves may attract some attention due to the strong krone.
Global macro and market themes
- Risk markets recover following another correction.
- Stronger business cycle signals are set to underpin risk assets in H1 15.
- Looming Fed hikes put upward pressure on US yields and the USD.
Focus
- Flash Comment: Rouble liquidity squeeze set to weigh on GDP growth, 19 December.
- Flash Comment: Euro inflation set to decline to -0.5% and remain negative untilQ4 15, 19 December.
- Research Global: Oil price to bottom when non-OPEC output rise halts – déjà vuNo 2, 18 December.
- Flash Comment: FOMC meeting – It all depends on the data, 17 December
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Editors’ Picks
AUD/USD could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.