Danske Research Team
Danske Bank A/S
Market Movers ahead
December 2015 looks set to be a dream month for interest rate nerds given the prospect of the ECB cutting and the Fed hiking for the first time since mid-2006. The ECB gets to kick off the party on Thursday, when we expect it both to lower its deposit rate by 20bp and to extend and enlarge its QE programme.
Friday brings the November jobs report stateside, which will give us our last insight into the current state of the US labour market before the Fed decides whether to hike on 16 December. We expect somewhat lower employment growth in November than in October but 175,000 new jobs in a month would still point to higher interest rates.
In addition, just to keep things interesting in our dream month, the week also brings the ISM in the US, flash inflation in Europe and the PMI in China.
Global macro and market themes
December 2015 looks set to be a dream month for interest rate nerds given the prospect of the ECB cutting and the Fed hiking for the first time since mid-2006. The ECB gets to kick off the party on Thursday, when we expect it both to lower its deposit rate by 20bp and to extend and enlarge its QE programme.
Friday brings the November jobs report stateside, which will give us our last insight into the current state of the US labour market before the Fed decides whether to hike on 16 December. We expect somewhat lower employment growth in November than in October but 175,000 new jobs in a month would still point to higher interest rates.
In addition, just to keep things interesting in our dream month, the week also brings the ISM in the US, flash inflation in Europe and the PMI in China.
Global macro and market themes
- Euro area growth set to reaccelerate.
- ECB preparing to cut...
- ...while the Fed is ready for lift-off.
- Bond yields set to move higher.
- China bottoming but medium-term challenges remain.
- CNY under increased pressure - more in store.
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Editors’ Picks
EUR/USD clings to daily gains near 1.0300 after US PMI data
EUR/USD trades in positive territory at around 1.0300 on Friday. The pair breathes a sigh of relief as the US Dollar rally stalls, even as markets stay cautious amid geopolitical risks and Trump's tariff plans. US ISM PMI improved to 49.3 in December, beating expectations.
GBP/USD holds around 1.2400 as the mood improves
GBP/USD preserves its recovery momentum and trades around 1.2400 in the American session on Friday. A broad pullback in the US Dollar allows the pair to find some respite after losing over 1% on Thursday. A better mood limits US Dollar gains.
Gold retreats below $2,650 in quiet end to the week
Gold shed some ground on Friday after rising more than 1% on Thursday. The benchmark 10-year US Treasury bond yield trimmed pre-opening losses and stands at around 4.57%, undermining demand for the bright metal. Market players await next week's first-tier data.
Stellar bulls aim for double-digit rally ahead
Stellar extends its gains, trading above $0.45 on Friday after rallying more than 32% this week. On-chain data indicates further rally as XLM’s Open Interest and Total Value Locked rise. Additionally, the technical outlook suggests a rally continuation projection of further 40% gains.
Week ahead – US NFP to test the markets, Eurozone CPI data also in focus
King Dollar flexes its muscles ahead of Friday’s NFP. Eurozone flash CPI numbers awaited as euro bleeds. Canada’s jobs data to impact bets of a January BoC cut. Australia’s CPI and Japan’s wages also on tap.
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