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Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Risk appetite was mostly positive in the equity space, regional markets firmer, led by tech sensitive countries, while US futures were also higher. This saw some yen underperformance in the FX space, but aggregate moves have been modest.
US Tsys futures are trading little changed today, ranges are narrow while volumes are slightly below average.
Looking ahead, we have UK GDP revisions later, along with US durable good orders and building permits.
Tsys futures are trading little changed today, ranges are narrow while volumes are slightly below average. TU is +00¼ at 102-22¾, while TY is trading +00 + at 108-31+.
Cash tsys are trading +/- 0.5bps, curve slightly flatter. The 10yr hovers just above the 4.50% level at 4.52%.
Traders are betting yields will continue to rise, taking at look at TLT (iShares 20+yr Treasury Bond) Etf, investors withdrew a net $1.55b from itin the last session for which data is available, reducing the fund's assets by 2.9% to $51.1b, the lowest level since June 21. This was the biggest one-day decrease in at least a year. The most active option for the Jan 15 expiry is the 85 put, we last trade at 88.31.
In Treasury options on friday, flows included A large options trade targeting a rise in US 10yr Treasury yields to around 5.4% by January 24 saw 50,000 February 103.00 puts bought for approximately $1.5m. This appears to be new risk, given the low prior open interest of 7,036 contracts at this strike. While in SOFR futures stand out flows included a large block sale in the Dec25 futures over the US morning session
Later today we have durable goods orders and new home sale
JGB futures have had a slightly downside bias since the lunchtime break, but overall moves remain contained. The March contract (JBH5) last 142.42, -.05 versus settlement levels. US Tsy futures have been relatively steady today as market wind down for the holiday period later this week.
Cash JGB yields are little changed, the 10yr remaining just under 1.07% at this stage. The 10yr swap rate is around 1.015%, also little changed for the session. Aggregate moves are less than 1bps across keys parts of the JGB curve and swap rate space.
We do have some BoJ and data event risks this week, the mins of the BoJ Oct meeting are out tomorrow, services PPI on Wednesday (Christmas day), along with a Ueda speech. On Friday the Tokyo CPI for Dec prints.
It remains to be seen if these events shift market sentiment, as the central bank awaits January trends on wages (for 2025), along with early US policy shifts (under the returning Trump administration).
Aussie bonds have outperformed in the APAC region today, curves have bull-flattened, with yields trading 5-10bps lower, with the 10yr outperforming.
ACGB yields have rallied today, outperforming the US Tsys move, with the passing of the US stopgap bill supporting markets. The 2yr is is -5.7bps at 3.919%, while the 10yr is trading -9.2bps at 4.40%. The 2s10s dropped 3.5bps at now trades 46.50bps, it briefly touched 50bps on Friday.
ACGB futures are currently YM +6.0, VTA +4.5, XM +9.5
Swap curves are trading -2bps across the curve
Bill strip is +2 to +6,
RBA-dated OIS pricing has firmed 1-3bps across the the next few meetings today, with 17bps of cuts priced for Feb, or a 69% chance of a cut, the first full cut is now priced in for the April meeting. Further out the curves there is 72.5bps of cumulative cuts now priced by December 2025, down from 80bps to start the week.
Tomorrow we have the Minutes of the RBA December rate meeting, which will close out the year for any data releases.
NZGBs have closed richer today, outperforming the move made on Friday in US tsys. In has been a very slow session
New Zealand’s Treasury Department acknowledges a deeper-than-expected economic downturn but remains optimistic about a recovery beginning in early 2025, as highlighted in its Fortnightly Economic Update. Indicators such as improving consumer and business confidence, easing inflationary pressures, and higher card spending suggest the worst may be over. However, they caution that future GDP revisions could remain larger than usual.
NZ's residential mortgage lending in November totaled NZ$7.41b, up 13% y/y but down 4% m/m after seasonal adjustment. First-home buyers accounted for NZ$1.5b (20.2% of total), a 3.7% annual decline, while investors borrowed NZ$1.6b, up 41% y/y. The number of new mortgage commitments fell 1.5% m/m to 18,981.
US Cash tsys are trading +/- 0.5bps, curve slightly flatter. The 10yr hovers just above the 4.50% level at 4.52%.
NZGBs curve has bull-flattened today, the 2yr is -2.8bps and trades at yearly lows, while the 10yr is -8.4bps at 4.446%. The 3s10s is +0.5bps at trades at its steepest level this year.
RBNZ dated OIS is pricing is little changed today with 54.7bps of cuts for the Feb meeting, and 100bps of cumulative cuts are now priced in by May. There is a cumulative 124bps of cuts priced in through to October 2025.
There is no further data out for New Zealand this year.
G10 FX markets have started the holiday impacted week in fairly muted fashion. There has been a slight risk on tone in early trade, but follow through has been very limited for the likes of AUD and NZD. The USD BBDXY index was last little changed near the 1297 level.
AUD/USD has found resistance near 0.6270, which marked highs from late last week (post softer US data outcomes). On the downside, moves sub 0.6250 have been supported, and we last tracked close to this level. This leaves us little changed for the session. The NZD has followed a similar trajectory, last near 0.5650/55, also little changed for the session.
USD/JPY has drifted a little higher, last in the 156.50/55 region, not too far from session highs (156.69). Lows for the session were in the first part of trade and at 156.14, above intra-session lows from Friday (just under 156.00).
We do have some event risks on the calendar for Japan this week, the mins of the BoJ Oct meeting are out tomorrow, services PPI on Wednesday (Christmas day), along with a Ueda speech. On Friday the Tokyo CPI for Dec prints.
EUR/USD is a touch higher, last near 1.0440/45.
In the cross asset space, US equity futures are higher, led by the tech side, up nearly 0.60% for the Nasdaq. Regional equity markets are mostly higher, led by the tech side.
US yields are close to flat at this stage, retreating from recent highs on Friday post the softer core PCE inflation reading. This is likely helping broader risk appetite in the equity space as week.
Looking ahead, we have UK GDP revisions later, along with US durable good orders and building permits.
The latest CFTC Commitments of Traders report shows notable speculative positioning shifts.
In fixed income, large buying of 10-year futures (143k) and reduced duration shorts (124k) preceded the Fed announcement, while SOFR shorts fell by 219k.
In FX, record weekly AUD selling (70k) and significant NZD selling (14.3k) contrasted with strong Swiss franc buying (13.2k) and smaller euro and MXN purchases, boosting the aggregate dollar long by $4 billion.
In equities, traders were better buyers of S&P futures buying 43k contracts, bought 2k Russell and selling 4k Dow contracts while increasing VIX shorts by 4k.
In commodities, oil longs surged by 40k, while gold and copper longs dropped by 14k and 5k, respectively.
Asian markets rebounded today, lifted by easing US inflation and renewed Fed rate rate-cut bets. Japan's Nikkei 225 rose 1.10%, while the Topix climbed 0.9%, driven by Toyota Motor and bank stocks ahead of BOJ minutes and Governor Ueda's speech. Hong Kong’s Hang Seng gained 0.7%, supported by record mainland Chinese buying of HK$778b ($100b) in 2024, as a weaker yuan and Beijing’s stimulus fueled demand.
South Korea's Kospi jumped 1.470% and Taiwan's Taiex advanced 2.50%, with tech stocks like TSMC and Hon Hai leading gains. Australia’s ASX 200 jumped 1.4%, tracking the rally in U.S. equities. Mainland China saw modest gains as Premier Li Qiang called for innovation in semiconductors, while investor sentiment remained cautious due to global trade concerns. The broader MSCI Asia Pacific Index snapped a six-day losing streak, offering some respite after recent volatility sparked by robust U.S. data and reduced Fed rate-cut expectations for 2025.
There were heavy outflows on Friday in the tech heavy markets of South Korea and Taiwan, foreign investors have returned somewhat to Korea today, although inflows are well below what is needed to cover recent outflows, with just $100m inflows so far today, with majority of the flows heading into financial stocks.
Heavy outflows from the tech heavy markets on Friday, with Taiwan seeing its largest outflow since June. Philippines has seen 8 straight sessions of outflows while Indonesia has seen 7 straight sessions of outflows.
South Korea: Recorded outflows of -$625m Friday, with a 5-day total of -$1.61b. YTD flows remain positive at +$2.22b. The 5-day average is -$322m, worse than the 20-day average of -$160m and the 100-day average of -$165m.
Taiwan: Saw significant outflows of -$1.78b Friday, contributing to a 5-day total of -$2.24b. YTD flows remain deeply negative at -$19.56b. The 5-day average is -$448m, worse than the 20-day average of -$175m and the 100-day average of -$139m.
India: Posted outflows of -$93m Thursday, with a 5-day total of -$114m. YTD flows remain positive at +$615m. The 5-day average is -$23m, worse than the 20-day average of +$158m but better than the 100-day average of -$43m.
Indonesia: Recorded outflows of -$26m Friday, with a 5-day total of -$253m. YTD flows remain positive at +$1.11b. The 5-day average is -$51m, worse than the 20-day average of -$31m but better than the 100-day average of +$11m.
Thailand: Registered outflows of -$62m Friday, with a 5-day total of -$124m. YTD flows are negative at -$4.16b. The 5-day average is -$25m, worse than the 20-day average of -$22m and the 100-day average of -$9m.
Malaysia: Experienced outflows of -$52m Friday, with a 5-day total of -$238m. YTD flows are negative at -$913m. The 5-day average is -$48m, better than the 20-day average of -$55m but worse than the 100-day average of -$10m.
Philippines: Posted outflows of -$13m Friday, with a 5-day total of -$70m. YTD flows remain negative at -$412m. The 5-day average is -$14m, worse than the 20-day average of -$9m and the 100-day average of +$1m.
Hedge Funds increased their bullish positioning on oil with net longs growing through mid-December according to CFTC.
The rise represents the biggest gain since September 2023.
Oil is faced with a balancing act of potential supply glut, versus potential further sanctions as a last policy from the Biden administration.
WTI had a poor week last week but finished higher today at US$69.85 having opened at $69.46.
Brent too rose to US$73.28, having closed on Friday at $72.94.
Adding to the potential supply glut for 2025, Belarus confirmed it is receiving Russian oil following a shut down.
However Russia is forecasting a slowdown in exports next year after Moscow ordered the refineries to focus on domestic markets first.
Support for restrictions on OECD restrictions on financing for oil projects has collapsedwith the idea of a deal to limit carbon heavy financing now appearing remote.
Gold was left floundering into the end of last week, only to receive a small kicker from weaker than expected PCE data in the US.
Gold had been hovering around US$2600 in early trading Friday only to jump to $2622.91 at the close and it has hovered around that level all day in Asia.
With lower rates typically good for gold, the muted Personal Consumption Expenditure revives the debate on how many rate cuts in the US in 2015.
Having had a very good year in 2024 on a view of rate cuts, gold appears evenly poised in the coming months, pending the outlook for rates.
The FED had indicated that the possibility exists for less rate cuts that is currently priced in and this has the potential to be challenging for gold.
Tonight sees Building Permits, Chicago Fed National Activity Index Durable Good and New Home Sale releases for further guidance on rates.
North East Asia currencies are slightly weaker versus the USD, but remain comfortably within recent ranges. In contrast, South East Asian currencies have mostly firmed against the dollar, with some of this reflecting catch up from USD weakness on Friday (post onshore closes), while regional equity sentiment has mostly been positive today.
USD/CNH is a little above 7.3030 in latest dealings, around 0.15% weaker in CNH terms. Earlier lows for the pair were at 7.2853. We are still above the 20-day EMA support point (last near 7.2740). Spot USD/CNY is also higher, but sub 7.3000 at this stage. Local equities are firmer, but the CSI 300 remains 4000 at this stage.
Spot USD/KRW has also traded with a positive bias as well, although has found selling interest above the 1450 level. We had better export data earlier (for the first 20-days of Dec), providing some optimism around growth, while retail sales also remained firm in y/y terms. Still, most of the bias around onshore sentiment is for downside risks to growth.
Taiwan equities (up over 2.5%) have surged on plans Nvidia will open an overseas headquarters in the country. USD/TWD spot is little changed though, last near 32.70.
In SEA, baht is the best performer up 0.65%. USD/THB is back sub 34.25. We are still comfortably above earlier Dec lows of 33.66 though. PHP is up around 0.40%, leaving USD/PHP back sub 58.40, with the pair now some distance from record lows at 59.00. BSP has been active around this level.
USD/IDR has edged lower, last near 16170. Recent highs in this pair were above 16300. BI's declaration to boldly guard the FX, along lower US yields have helped the pair track lower.
USD/SGD is slightly lower, back under 1.3550. Data showed Nov CPI below expectations, with core and headline now sub 2%. This is likely to add momentum to easing calls for 2025.
UP TODAY (TIMES GMT/LOCAL)
Date
GMT/Local
Impact
Country
Event
23/12/2024
0700/0700
***
GB
GDP Second Estimate
23/12/2024
0700/0700
*
GB
Quarterly current account balance
23/12/2024
0800/0900
***
ES
GDP (f)
23/12/2024
1330/0830
*
CA
Industrial Product and Raw Material Price Index
23/12/2024
1330/0830
***
CA
Gross Domestic Product by Industry
23/12/2024
1330/0830
**
US
Durable Goods New Orders
23/12/2024
1500/1000
*
US
US Treasury Auction Result for 26 Week Bill
23/12/2024
1500/1000
*
US
US Treasury Auction Result for 13 Week Bill
23/12/2024
1500/1000
***
US
New Home Sales
23/12/2024
1630/1130
**
US
US Treasury Auction Result for 52 Week Bill
23/12/2024
1630/1130
*
US
US Treasury Auction Result for Cash Management Bill
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.
Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MNI (SYDNEY)
Risk appetite was mostly positive in the equity space, regional markets firmer, led by tech sensitive countries, while US futures were also higher. This saw some yen underperformance in the FX space, but aggregate moves have been modest.
US Tsys futures are trading little changed today, ranges are narrow while volumes are slightly below average.
Looking ahead, we have UK GDP revisions later, along with US durable good orders and building permits.
Tsys futures are trading little changed today, ranges are narrow while volumes are slightly below average. TU is +00¼ at 102-22¾, while TY is trading +00 + at 108-31+.
Cash tsys are trading +/- 0.5bps, curve slightly flatter. The 10yr hovers just above the 4.50% level at 4.52%.
Traders are betting yields will continue to rise, taking at look at TLT (iShares 20+yr Treasury Bond) Etf, investors withdrew a net $1.55b from itin the last session for which data is available, reducing the fund's assets by 2.9% to $51.1b, the lowest level since June 21. This was the biggest one-day decrease in at least a year. The most active option for the Jan 15 expiry is the 85 put, we last trade at 88.31.
In Treasury options on friday, flows included A large options trade targeting a rise in US 10yr Treasury yields to around 5.4% by January 24 saw 50,000 February 103.00 puts bought for approximately $1.5m. This appears to be new risk, given the low prior open interest of 7,036 contracts at this strike. While in SOFR futures stand out flows included a large block sale in the Dec25 futures over the US morning session
Later today we have durable goods orders and new home sale
JGB futures have had a slightly downside bias since the lunchtime break, but overall moves remain contained. The March contract (JBH5) last 142.42, -.05 versus settlement levels. US Tsy futures have been relatively steady today as market wind down for the holiday period later this week.
Cash JGB yields are little changed, the 10yr remaining just under 1.07% at this stage. The 10yr swap rate is around 1.015%, also little changed for the session. Aggregate moves are less than 1bps across keys parts of the JGB curve and swap rate space.
We do have some BoJ and data event risks this week, the mins of the BoJ Oct meeting are out tomorrow, services PPI on Wednesday (Christmas day), along with a Ueda speech. On Friday the Tokyo CPI for Dec prints.
It remains to be seen if these events shift market sentiment, as the central bank awaits January trends on wages (for 2025), along with early US policy shifts (under the returning Trump administration).
Aussie bonds have outperformed in the APAC region today, curves have bull-flattened, with yields trading 5-10bps lower, with the 10yr outperforming.
ACGB yields have rallied today, outperforming the US Tsys move, with the passing of the US stopgap bill supporting markets. The 2yr is is -5.7bps at 3.919%, while the 10yr is trading -9.2bps at 4.40%. The 2s10s dropped 3.5bps at now trades 46.50bps, it briefly touched 50bps on Friday.
ACGB futures are currently YM +6.0, VTA +4.5, XM +9.5
Swap curves are trading -2bps across the curve
Bill strip is +2 to +6,
RBA-dated OIS pricing has firmed 1-3bps across the the next few meetings today, with 17bps of cuts priced for Feb, or a 69% chance of a cut, the first full cut is now priced in for the April meeting. Further out the curves there is 72.5bps of cumulative cuts now priced by December 2025, down from 80bps to start the week.
Tomorrow we have the Minutes of the RBA December rate meeting, which will close out the year for any data releases.
NZGBs have closed richer today, outperforming the move made on Friday in US tsys. In has been a very slow session
New Zealand’s Treasury Department acknowledges a deeper-than-expected economic downturn but remains optimistic about a recovery beginning in early 2025, as highlighted in its Fortnightly Economic Update. Indicators such as improving consumer and business confidence, easing inflationary pressures, and higher card spending suggest the worst may be over. However, they caution that future GDP revisions could remain larger than usual.
NZ's residential mortgage lending in November totaled NZ$7.41b, up 13% y/y but down 4% m/m after seasonal adjustment. First-home buyers accounted for NZ$1.5b (20.2% of total), a 3.7% annual decline, while investors borrowed NZ$1.6b, up 41% y/y. The number of new mortgage commitments fell 1.5% m/m to 18,981.
US Cash tsys are trading +/- 0.5bps, curve slightly flatter. The 10yr hovers just above the 4.50% level at 4.52%.
NZGBs curve has bull-flattened today, the 2yr is -2.8bps and trades at yearly lows, while the 10yr is -8.4bps at 4.446%. The 3s10s is +0.5bps at trades at its steepest level this year.
RBNZ dated OIS is pricing is little changed today with 54.7bps of cuts for the Feb meeting, and 100bps of cumulative cuts are now priced in by May. There is a cumulative 124bps of cuts priced in through to October 2025.
There is no further data out for New Zealand this year.
G10 FX markets have started the holiday impacted week in fairly muted fashion. There has been a slight risk on tone in early trade, but follow through has been very limited for the likes of AUD and NZD. The USD BBDXY index was last little changed near the 1297 level.
AUD/USD has found resistance near 0.6270, which marked highs from late last week (post softer US data outcomes). On the downside, moves sub 0.6250 have been supported, and we last tracked close to this level. This leaves us little changed for the session. The NZD has followed a similar trajectory, last near 0.5650/55, also little changed for the session.
USD/JPY has drifted a little higher, last in the 156.50/55 region, not too far from session highs (156.69). Lows for the session were in the first part of trade and at 156.14, above intra-session lows from Friday (just under 156.00).
We do have some event risks on the calendar for Japan this week, the mins of the BoJ Oct meeting are out tomorrow, services PPI on Wednesday (Christmas day), along with a Ueda speech. On Friday the Tokyo CPI for Dec prints.
EUR/USD is a touch higher, last near 1.0440/45.
In the cross asset space, US equity futures are higher, led by the tech side, up nearly 0.60% for the Nasdaq. Regional equity markets are mostly higher, led by the tech side.
US yields are close to flat at this stage, retreating from recent highs on Friday post the softer core PCE inflation reading. This is likely helping broader risk appetite in the equity space as week.
Looking ahead, we have UK GDP revisions later, along with US durable good orders and building permits.
The latest CFTC Commitments of Traders report shows notable speculative positioning shifts.
In fixed income, large buying of 10-year futures (143k) and reduced duration shorts (124k) preceded the Fed announcement, while SOFR shorts fell by 219k.
In FX, record weekly AUD selling (70k) and significant NZD selling (14.3k) contrasted with strong Swiss franc buying (13.2k) and smaller euro and MXN purchases, boosting the aggregate dollar long by $4 billion.
In equities, traders were better buyers of S&P futures buying 43k contracts, bought 2k Russell and selling 4k Dow contracts while increasing VIX shorts by 4k.
In commodities, oil longs surged by 40k, while gold and copper longs dropped by 14k and 5k, respectively.
Asian markets rebounded today, lifted by easing US inflation and renewed Fed rate rate-cut bets. Japan's Nikkei 225 rose 1.10%, while the Topix climbed 0.9%, driven by Toyota Motor and bank stocks ahead of BOJ minutes and Governor Ueda's speech. Hong Kong’s Hang Seng gained 0.7%, supported by record mainland Chinese buying of HK$778b ($100b) in 2024, as a weaker yuan and Beijing’s stimulus fueled demand.
South Korea's Kospi jumped 1.470% and Taiwan's Taiex advanced 2.50%, with tech stocks like TSMC and Hon Hai leading gains. Australia’s ASX 200 jumped 1.4%, tracking the rally in U.S. equities. Mainland China saw modest gains as Premier Li Qiang called for innovation in semiconductors, while investor sentiment remained cautious due to global trade concerns. The broader MSCI Asia Pacific Index snapped a six-day losing streak, offering some respite after recent volatility sparked by robust U.S. data and reduced Fed rate-cut expectations for 2025.
There were heavy outflows on Friday in the tech heavy markets of South Korea and Taiwan, foreign investors have returned somewhat to Korea today, although inflows are well below what is needed to cover recent outflows, with just $100m inflows so far today, with majority of the flows heading into financial stocks.
Heavy outflows from the tech heavy markets on Friday, with Taiwan seeing its largest outflow since June. Philippines has seen 8 straight sessions of outflows while Indonesia has seen 7 straight sessions of outflows.
South Korea: Recorded outflows of -$625m Friday, with a 5-day total of -$1.61b. YTD flows remain positive at +$2.22b. The 5-day average is -$322m, worse than the 20-day average of -$160m and the 100-day average of -$165m.
Taiwan: Saw significant outflows of -$1.78b Friday, contributing to a 5-day total of -$2.24b. YTD flows remain deeply negative at -$19.56b. The 5-day average is -$448m, worse than the 20-day average of -$175m and the 100-day average of -$139m.
India: Posted outflows of -$93m Thursday, with a 5-day total of -$114m. YTD flows remain positive at +$615m. The 5-day average is -$23m, worse than the 20-day average of +$158m but better than the 100-day average of -$43m.
Indonesia: Recorded outflows of -$26m Friday, with a 5-day total of -$253m. YTD flows remain positive at +$1.11b. The 5-day average is -$51m, worse than the 20-day average of -$31m but better than the 100-day average of +$11m.
Thailand: Registered outflows of -$62m Friday, with a 5-day total of -$124m. YTD flows are negative at -$4.16b. The 5-day average is -$25m, worse than the 20-day average of -$22m and the 100-day average of -$9m.
Malaysia: Experienced outflows of -$52m Friday, with a 5-day total of -$238m. YTD flows are negative at -$913m. The 5-day average is -$48m, better than the 20-day average of -$55m but worse than the 100-day average of -$10m.
Philippines: Posted outflows of -$13m Friday, with a 5-day total of -$70m. YTD flows remain negative at -$412m. The 5-day average is -$14m, worse than the 20-day average of -$9m and the 100-day average of +$1m.
Hedge Funds increased their bullish positioning on oil with net longs growing through mid-December according to CFTC.
The rise represents the biggest gain since September 2023.
Oil is faced with a balancing act of potential supply glut, versus potential further sanctions as a last policy from the Biden administration.
WTI had a poor week last week but finished higher today at US$69.85 having opened at $69.46.
Brent too rose to US$73.28, having closed on Friday at $72.94.
Adding to the potential supply glut for 2025, Belarus confirmed it is receiving Russian oil following a shut down.
However Russia is forecasting a slowdown in exports next year after Moscow ordered the refineries to focus on domestic markets first.
Support for restrictions on OECD restrictions on financing for oil projects has collapsedwith the idea of a deal to limit carbon heavy financing now appearing remote.
Gold was left floundering into the end of last week, only to receive a small kicker from weaker than expected PCE data in the US.
Gold had been hovering around US$2600 in early trading Friday only to jump to $2622.91 at the close and it has hovered around that level all day in Asia.
With lower rates typically good for gold, the muted Personal Consumption Expenditure revives the debate on how many rate cuts in the US in 2015.
Having had a very good year in 2024 on a view of rate cuts, gold appears evenly poised in the coming months, pending the outlook for rates.
The FED had indicated that the possibility exists for less rate cuts that is currently priced in and this has the potential to be challenging for gold.
Tonight sees Building Permits, Chicago Fed National Activity Index Durable Good and New Home Sale releases for further guidance on rates.
North East Asia currencies are slightly weaker versus the USD, but remain comfortably within recent ranges. In contrast, South East Asian currencies have mostly firmed against the dollar, with some of this reflecting catch up from USD weakness on Friday (post onshore closes), while regional equity sentiment has mostly been positive today.
USD/CNH is a little above 7.3030 in latest dealings, around 0.15% weaker in CNH terms. Earlier lows for the pair were at 7.2853. We are still above the 20-day EMA support point (last near 7.2740). Spot USD/CNY is also higher, but sub 7.3000 at this stage. Local equities are firmer, but the CSI 300 remains 4000 at this stage.
Spot USD/KRW has also traded with a positive bias as well, although has found selling interest above the 1450 level. We had better export data earlier (for the first 20-days of Dec), providing some optimism around growth, while retail sales also remained firm in y/y terms. Still, most of the bias around onshore sentiment is for downside risks to growth.
Taiwan equities (up over 2.5%) have surged on plans Nvidia will open an overseas headquarters in the country. USD/TWD spot is little changed though, last near 32.70.
In SEA, baht is the best performer up 0.65%. USD/THB is back sub 34.25. We are still comfortably above earlier Dec lows of 33.66 though. PHP is up around 0.40%, leaving USD/PHP back sub 58.40, with the pair now some distance from record lows at 59.00. BSP has been active around this level.
USD/IDR has edged lower, last near 16170. Recent highs in this pair were above 16300. BI's declaration to boldly guard the FX, along lower US yields have helped the pair track lower.
USD/SGD is slightly lower, back under 1.3550. Data showed Nov CPI below expectations, with core and headline now sub 2%. This is likely to add momentum to easing calls for 2025.
UP TODAY (TIMES GMT/LOCAL)
Date
GMT/Local
Impact
Country
Event
23/12/2024
0700/0700
***
GB
GDP Second Estimate
23/12/2024
0700/0700
*
GB
Quarterly current account balance
23/12/2024
0800/0900
***
ES
GDP (f)
23/12/2024
1330/0830
*
CA
Industrial Product and Raw Material Price Index
23/12/2024
1330/0830
***
CA
Gross Domestic Product by Industry
23/12/2024
1330/0830
**
US
Durable Goods New Orders
23/12/2024
1500/1000
*
US
US Treasury Auction Result for 26 Week Bill
23/12/2024
1500/1000
*
US
US Treasury Auction Result for 13 Week Bill
23/12/2024
1500/1000
***
US
New Home Sales
23/12/2024
1630/1130
**
US
US Treasury Auction Result for 52 Week Bill
23/12/2024
1630/1130
*
US
US Treasury Auction Result for Cash Management Bill
23/12/2024
1800/1300
*
US
US Treasury Auction Result for 2 Year Note
23/12/2024
1830/1330
CA
Bank of Canada meeting minutes
24/12/2024
0030/1130
AU
RBA Minutes
24/12/2024
1330/0830
**
US
Philadelphia Fed Nonmanufacturing Index
24/12/2024
1355/0855
**
US
Redbook Retail Sales Index
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