Dollar edged higher in subdued holiday trading, maintaining its recent  strength but staying within a narrow range below last week’s highs against major currencies. Markets largely brushed aside the disappointing US durable goods orders data, as the series is known for its volatility. Moreover, traders are prioritizing labor market and consumption trends, which Fed views […]

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As markets wind down for the year-end holiday period, forex trading activity turns subdued, with limited momentum across major pairs. Dollar, while maintaining its position as the strongest currency of the month, is facing challenges in decisively breaking last month’s highs against European majors. However, the greenback still made some headway against Yen and commodity […]

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In an interview with the Financial Times, ECB President Christine Lagarde expressed optimism about nearing the inflation target. She remarked that ECB is “very close” to declaring that inflation has been “sustainably” brought back to its 2% medium-term target. The latest inflation reading of 2.2% reflects the success of ECB’s restrictive monetary policy. However, she […]

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The Federal Reserve’s policy change and economic projections have significantly impacted markets, leading to a rise in US yields. The US PCE data released on Friday rose less than expected, alleviating some selling pressure on US equities. The Bank of Japan held rates steady, defying expectations of a rate cut, while the risk of a […]

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The tradition of central banks hosting meetings just before Christmas continued this year with policy decisions in the US, Japan, UK, Norway, and Sweden. The largest present came from the US Federal Reserve in the shape of a significant hawkish surprise. Fed cut the policy rate target by 25bp to 4.25-4.50% as expected, but Powell delivered […]

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Markets A looming US government shutdown starting as soon as tonight is capturing market and media attention. Policymakers had agreed on a bipartisan deal to fund spending through March 24. Enter Trump and Musk. Both urged Republicans to kill the deal, a.o. because it didn’t raise the debt ceiling. Trump otherwise has to address the […]

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In focus today In the euro area, we get data on consumer confidence for December. Consumer confidence has been on a rising trend the past two years but in November it unexpectedly declined. It will be very import for the growth outlook to see if the decline was just a blip or it continued in […]

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The forex and stock markets are holding steady today, with limited volatility as traders anticipate FOMC rate decision and updated economic projections. A 25bps rate cut, reducing the target range to 4.25–4.50%, is virtually certain. However, the market’s focus lies on the tone and guidance Fed delivers. Critical questions include whether a pause in easing […]

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ECB Chief Economist Philip Lane highlighted the importance of maintaining “agility” in monetary policy decisions during a speech today. Lane emphasized that in the current environment of elevated uncertainty, ECB’s “prudent” approach will be guided by a meeting-by-meeting strategy without pre-committing to any specific rate path. Lane outlined that the pace of monetary easing will […]

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Eurozone headline inflation for November was finalized at 2.2% yoy, up from October’s 2.0%. Meanwhile, Core CPI, which excludes food, alcohol, and tobacco, eased to 2.7% yoy, down from October’s 2.9%. Services contributed the most to the Eurozone annual inflation rate, adding +1.74 percentage points, followed by food, alcohol, and tobacco (+0.53 pp) and non-energy […]

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Markets Retail sales for November were solid on face value though the details offered a more balanced picture. That was enough to cap the intraday rise in US yields. Net daily changes varied in a tight range between -1 bps and +0.7 bps in an otherwise uneventful session. German rates eased up to 1.7 bps […]

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Canada joined the global political gloom. The sudden resignation of the finance minister on Monday started raising questions about Trudeau’s leadership as politicians there try to find ways to deal with economic slowdown topped by Trump’s tariff threats. Happily for the Bank of Canada (BoC), inflation dropped below the 2% target for the second time […]

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In focus today Focus today will be on tonight’s FOMC meeting. We expect a 25bp cut, which is also fully discounted by markets. Apart from the rate decision, market attention will be on the updated rate projections, and especially on the FOMC’s latest view on the terminal rate level. We think Chair Powell will aim […]

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Markets Relative market calm this morning was already disturbed sooner than expected by the publication of the UK labour market data. The unemployment rate remained unchanged at 4.3% and November payrolls declined a bigger than expected 35k. However, it was wage growth data catching the eye just two days before the final BoE policy meeting […]

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Canadian Dollar trades broadly lower today while commodity currencies are generally soft. Canada’s CPI report reinforced the outlook of stable inflation hovering around target. BOC has likely completed its aggressive rate-cutting phase and pauses in policy easing are anticipated at some meetings next year. Nonetheless, the direction remains clear: further rate reductions are expected to […]

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The December ZEW Economic Sentiment survey delivered a notable improvement in outlook for both Germany and the Eurozone, driven by optimism surrounding interest rate cuts and policy shifts. German ZEW Economic Sentiment index surged to 15.7 from 7.4, far exceeding expectations of 7.0. However, Current Situation Index continued to deteriorate, slipping further to -93.1 from […]

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Finland’s ECB Governing Council member Olli Rehn highlighted growing risks to Europe’s economic outlook with the uncertainty over trade policy as a key downside factor. Rehn warned that Europe must be prepared to respond to potential trade conflicts with the US, emphasizing that while “negotiation is preferable,” EU’s position could be strengthened by demonstrating readiness […]

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Eurozone goods exports rose 2.1% yoy to EUR 254.0B in October. Goods imports rose 3.2% yoy to EUR 247.2B. Trade balance stood at EUR 6.8B surplus. Intra-Eurozone trade rose 2.2% yoy to EUR 229.2B. In seasonally adjusted term, exports fell -1.6% mom to EUR 232.5B. Imports rose 1.3% mom to EUR 226.5B. Trade surplus narrowed […]

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Markets Yesterday’s PMI releases in Europe and the US confirmed the ongoing divergence in growth on both sides of the Atlantic, cementing market expectations on similar divergence in Fed and ECB policy. The S&P global US flash PMI showed output growth at the end of the year at a 33-month high (56.6 from 54.9) amid […]

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Europe appears to be coming apart one nation at a time’, writes Bloomberg to summarize the complicated politics of the old continent. After the French snap election led to a divided government and an ungovernable France since summer, German politicians gave a no-confidence verdict for the three-way ruling party of Germany, paving the way for […]

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