US broader indices give up gains and close lower on the dayNew Zealand December consumer confidence jumps into optimism! 100.2 (prior 99.8)Republican Congressman Tom Cole says there’s an agreement on a stopgap funding billCrude oil futures settles at $69.38, down -$0.64 or 0.91%Mexico central bank cuts its benchmark interest rate to 10% from 10.25%Bitcoin moving down and away from $100KUS sells 5 year TIPS at 2.121% vs WI at 2.065% at the time of the auctionDeutsche Bank says the Fed won’t cut rates in 2025US 30 year mortage rate rises to 6.72% from 6.60% last week.Canadian Prime Minister Justin Trudeau to further shuffle cabinet on FridayEuropean equity close: DAX falls back below 20,000Trump says he wants the debt ceiling eliminated or extendedThe question hanging over the market: What are Trump’s real priorities?BOE’s Bailey: Market rate pricing for February is in a reasonable placeUS November existing home sales 4.15m vs 4.07m expectedThe lesson from Powell: It’s kind of fallen apartUS Q3 final GDP +3.1% vs +2.8% expectedDecember Philly Fed manufacturing index -16.4 vs +3.0 expectedUS Initial jobless claims 220K vs 230K estimateWhat is moving in the markets today? A technical look at the 3 major currency pairsForexLive European FX news wrap: Yen tumbles on Ueda, BOE keeps rates steadyBOE leaves bank rate unchanged at 4.75%, as expected
Markets:
Crude oil $69.14 down -$0.88 or -1.26%Gold up $8.98 or 0.35% at $2593Silver -$0.30 or -1.07% at $29.02Bitcoin down -$2,300 at $97,611
In the US stocks, the broader indices gave up gains and closed lower, but the Dow snapped a 10 day losing streak and is closing higher.
Dow up 15.37 points or 0.04% at 43,342.24S&P fell -5.08 poiints or -0.09% at 5867.08Nasdaq fell -19.92 points or -0.10% a 18,372.77
In the US debt market :
2 year 4.316%, down -4.3 bps10 year 4.57%, up 5.0 bps30 year 4.744%, +6.5 bps
European indices closed sharply lower:
German Dx, -1.35%France’s CAC -1.22%UK FTSE 100, -1.14%Spain’s Ibex -1.52%Italy’s FTSE MIB -1.78%
In the forex, the USD is mixed with the greenback higher vs the JPY the biggest mover (by 1.69%. The dollar also rose vs the GBP (by 0.60%). Both the BOJ and BOE kept rates unchanged but the moves were considered more dovish sending the JPY and the GBP lower.
The BOE kept rates unchanged. The surprise was the vote which had 3 dissenters who wanted to cut rates. That has sent the GBPUSD back lower (the USD higher) after the pair had moved higher in the early European session. Below are the main points from the BOE statement this morning.
Bank rate vote 6-3 vs 8-1 expected (Dhingra, Ramsden, Taylor voted to cut bank rate by 25 bps)A gradual approach to removing monetary policy restraint remains appropriateWe can’t commit to when or by how much we will cut rates in 2025 as economic uncertainty is highServices consumer price inflation has remained elevatedRemaining domestic inflationary pressures are resolving more slowlyMost indicators of UK near-term activity have declinedLabour market is broadly in balance
The GBPUSD which snapped back higher to test the 100-hour MA (and swing area) near 1.2660 in the European morning session, turned lower after the decision, fell below the low from the Asian session at 1.2563 and accelerated the decline until it reached the lows from November (lowest level since May) at 1.24865. The low for the day reached 1.2494 with the price currently trading near that level going into the new trading day. Going into the new day, that level will be a barometer for the buyers and the sellers.
The Bank of Japan also met today and they too kept rates unchanged. BOJ Ueda said:
Japan economy is recovering modestly, although some weakness seenHard to say if incoming data will be sufficient to support January hikeNeed more data on wages (which may imply waiting on hikes).Need to gauge situation for quite a while on both wages and possible Trump tariffsIf we decide not to hike, we will consider that decision as a safe oneThere is of course the risk of falling behind the curve in waitingBut we will consider said risk if we were to decide to skip a rate hike in January
The comments sound like there will be no rise in rates soon, and as a result, the USDJPY moved higher (lower JPY). The price extended to the next target area between 157.66 and 158.42 on the daily chart where the buying slowed, but so far the modest correction has been able to stay above close support near 157.10 (the low reached 157.30. Watch the 157.10 level for a close and short term bias defining level after the trend move higher today.
This article was written by Greg Michalowski at www.forexlive.com.
