Turmoil in South Korea, Crypto still hovering around all-time highs
U.S. Economic Data
Federal Reserve Policy: Traders expect a 70% chance of a 0.25% rate cut during the Dec. 18 meeting, based on the Fed’s mixed messaging and economic conditions. Chair Jerome Powell’s remarks later in the week may clarify the outlook.
Labor Market Trends: The ADP report showed private sector hiring increased in November but fell short of expectations. JOLTS data indicated employers were hesitant to expand, despite rising job openings. Economists forecast Friday’s employment report to reveal a 200,000 payroll increase in November, up from 12,000 in October, with unemployment ticking up to 4.2%.
Stock Market Performance:
The S&P 500 rose 0.3% and is poised for its 56th record close this year.
The Dow Jones Industrial Average gained 0.7%, and the Nasdaq Composite increased by 0.6%.
Salesforce shares surged 10% after exceeding revenue expectations, while Marvell Technology jumped 17.7% due to strong AI-related demand.
Foot Locker plunged 17% following lower-than-expected sales and revenue.
Bond Yields and Dollar: Treasury yields rose slightly, with the 10-year note at 4.24%. The dollar index increased marginally amid geopolitical and economic developments.
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European Economic Updates
France: The French parliament debated a no-confidence motion against Prime Minister Michel Barnier over the 2025 budget. Despite political tension, the CAC 40 rose 0.9%, and the euro remained steady at $1.0511. French-German bond spreads narrowed to 82 basis points.
U.K. and Eurozone: Britain’s 10-year gilt yield rose to 4.26%. Key economic releases, including Eurozone GDP and retail sales data, are anticipated later this week.
Asian Markets and Geopolitics
The KOSPI fell 1.4% after President Yoon Suk Yeol declared and then quickly revoked martial law, facing backlash and impeachment efforts.
The won rebounded after a 2.5% drop, supported by government pledges to stabilize markets, including a $7 billion intervention fund.
Samsung Electronics, South Korea’s largest firm, declined 0.9%.
China:
Stocks continued to slide, with the CSI 300 declining amid weak services sector data and escalating trade tensions with the U.S.
Beijing banned exports of critical military-related minerals in retaliation to U.S. chip export restrictions. Industry groups encouraged Chinese firms to prioritize domestic chip suppliers.
The offshore yuan stabilized after hitting a 2024 low.
Commodities and Cryptocurrencies
Oil and Gold: West Texas Intermediate crude hovered at $69.84 per barrel, and spot gold rose 0.3% to $2,651.58 per ounce, reflecting slight investor hedging amid market uncertainty.
Cryptocurrencies: Bitcoin remained stable, rising 0.1% to $96,213.04, while Ether surged 5.4% to $3,812.19.
Corporate Highlights
Tech and Retail: Dollar Tree saw sales gains, while Foot Locker downgraded forecasts due to softer consumer demand. AI-driven optimism boosted Salesforce and Marvell Technology.
Automotive and Health: General Motors announced $5 billion in charges tied to struggles in China. Eli Lilly reported strong performance for its weight-loss drug Zepbound, outperforming Novo Nordisk’s Wegovy.
Financials: Royal Bank of Canada outperformed expectations, benefiting from the HSBC Canada acquisition and lower-than-expected loan loss provisions.
Key Economic Indicators
Global Economic Reports: U.S. jobless claims, Eurozone GDP, and retail sales data expected Thursday and Friday.
Fed Beige Book: Insights into post-election economic sentiment may provide a clearer picture of trends.
Corporate Earnings: Major updates from companies like Synopsys, Dollar Tree, and Hormel Foods are expected to influence market sentiment.
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