Nov

U.S. Core PCE Price Index, U.S. GDP, U.S. Jobless Claims

27/11/2024 - 07:57 UTC

The U.S. dollar traded almost unchanged most major currencies on Monday, with the dollar index (USDX) fluctuating between gains and losses only to end the session 0.01% lower. The U.S. dollar has experienced eight consecutive weeks of appreciation, primarily driven by higher U.S. Treasury yields resulting from reduced expectations of monetary easing. Additionally, market participants are factoring in the potential impact of increased tariffs and tighter immigration controls under the incoming U.S. administration, which could lead to a risk-off environment and further support the dollar.

The main Wall Street stock indices gained on Tuesday, despite concerns about potential U.S. trade tariffs. A recent Reuters report suggested that planned U.S. tariffs would encompass energy imports, raising concerns for Canadian producers. Analysts at Citigroup noted a shift in market sentiment, transitioning from pre-election uncertainty to a period of apprehension surrounding future policy decisions. Investors are now turning their attention to the release of the PCE price index data scheduled for Wednesday. This crucial inflation metric is closely monitored by the Federal Reserve and could influence its monetary policy decisions in the coming months.

On the cryptos front, Bitcoin extended its decline, moving further away from its all-time high reached last week at $99K and is currently trading close to the $93K mark as of 07:15 AM GMT on Wednesday. Reports suggest that Bitcoin's recent price decline was fuelled mainly by profit taking following the recent rally, as well as comments from President-elect Donald Trump indicating more trade tariffs on China and other countries are possible, triggering a risk-off sentiment for investors.

Market participants are gearing up for a busy day ahead, with a slew of economic indicators including the Core PCE Price Index, growth data in the form of GDP, U.S. Jobless Claims, the Chicago PMI, pending home sales, personal income and personal spending and weekly crude oil inventories from the Energy Information Administration.

EUR/USD

The EUR/USD pair hovered around the 1.0500 level on Tuesday, ending the session 0.45% higher. This week's economic calendar remains light, with the US Thanksgiving holiday on Thursday expected to dampen late-week trading activity.

The latest Federal Reserve (Fed) Meeting Minutes reveal that members of the Federal Open Market Committee (FOMC) remain cautious about accelerating the pace of rate cuts.

The European economic calendar is largely uneventful this week, with Friday’s release of the Harmonized Index of Consumer Prices (HICP) inflation for November standing out as a key highlight. In the US, Wednesday brings updates on Personal Consumption Expenditure Price Index inflation and Gross Domestic Product (GDP) growth, both critical indicators of economic health.

Gold

Gold prices held firm at around $2,630 for a second consecutive day, despite fresh geopolitical tensions triggered by US President Donald Trump’s announcement of potential tariffs on three major trading partners via social media.

While such uncertainty typically boosts the appeal of gold as a safe-haven asset, a cooling of tensions in the Middle East has tempered demand for the precious metal.

Meanwhile, the latest Federal Open Market Committee (FOMC) minutes suggested that the Federal Reserve could maintain interest rates at restrictive levels if inflation remains elevated, signaling a possible pause in rate cuts.

On the data front, the US Conference Board’s (CB) Consumer Confidence Index for November outperformed expectations and October’s reading, reflecting robust consumer sentiment.

WTI Oil

Oil prices declined on Tuesday, marking a continuation of the previous day’s losses, as reports of a ceasefire agreement between Israel and Hezbollah reduced geopolitical risk premiums in the energy market.

The ceasefire agreement, announced by U.S. President Joe Biden, is set to take effect on Wednesday. Israeli Prime Minister Benjamin Netanyahu affirmed readiness to implement the deal while warning of a strong response to any violations by Hezbollah.

U.S. President-elect Donald Trump’s announcement of a 25% tariff on imports from Mexico and Canada added another layer of uncertainty.

Meanwhile, weekly inventory data provided further market insights. According to the American Petroleum Institute (API), U.S. crude oil stocks fell by 5.94 million barrels for the week ending November 22.

US 500

U.S. stock markets ended higher on Tuesday, with the US 500 and US Tech 100 leading gains as technology stocks rallied. Investors balanced President-elect Donald Trump’s tariff proposals on key trading partners with insights from the Federal Reserve’s latest meeting minutes.

U.S. short-term interest rate futures trimmed earlier losses following the release of the Federal Reserve’s November 6–7 meeting minutes. The minutes revealed a divided stance among policymakers on the necessity of further rate cuts, with consensus forming around the need to avoid concrete forward guidance at this stage.

Overnight, Trump announced plans to impose a 25% conditional tariff on Canadian and Mexican imports that could violate his renegotiated trade deal. He also proposed an additional 10% tariff on Chinese imports, stoking fears of trade wars.

U.S. Core PCE Price Index, U.S. GDP, U.S. Jobless Claims

EUR/USD

Gold

WTI Oil

US 500

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