The global shipping market is certainly top of mind as we celebrate a holiday weekend. Yemen continues to threaten the Red Sea but now there are worries about a wider threat to shipping. Iran said it could shut down the Gibraltar Strait, which is something that most people doubt. At the same time, the latest attack defies belief.

„The motor vessel CHEM PLUTO, a Liberia-flagged, Japanese-owned, and Netherlands-operated chemical tanker was struck at approximately 10 a.m. local time (6 a.m. GMT) yesterday in the Indian Ocean, 200 nautical miles from the coast of India, by a one-way attack drone fired from Iran,“ a Pentagon spokesperson told Reuters.

Either Iran had some very bad intel, the Pentagon is playing games or Iran is playing an incredibly stupid game.

In any case, the stakes for global shipping and the oil market continue to rise. I’ll be interested to see how crude trades in the next few days.

This article was written by Adam Button at www.forexlive.com.

• US stocks close the week mixed. Major indices rise for the 8th consecutive week
• Crude oil futures settle at $73.56
• European indices end the week with mixed results
• Nat. Economic Dir Brainard: Inflation has decreased faster than more optimistic forecasts.
• Atlanta Fed GDPNow estimate for Q4 growth 2.3% down from 2.8% last
• US new-home sales for November 0.590M vs 0.685M estimate
• UMich November US consumer sentiment final 69.7 vs 69.4 expected
• Iran paramilitary forces helping Houthis target ships -report
• US November PCE core inflation 3.2% vs 3.3% expected
• Canada October GDP MoM 0.0% versus 0.2% expected
• US durable goods orders (preliminary) for November 5.4% vs 2.2% estimate
• The GBP is the strongest and the USD is the weakest as the NA session begins
• ForexLive European FX morning news wrap: Xmas weekend subdues major currencies

The year is working to an end, but before markets slow to a trickle next week, there was one more key economic release today. The headline and core PCE data – the favored inflation quide for the Fed – was released at 8:30 AM ET, and it showed a lower than expected gain of 0.1% for the core measure (0.2% was expected) and -0.1% for the core measure (0.0% expected). The YoY measures for core and headline were also lower at 3.2% and 2.8% respectively (vs 3.3% and 3.0% expected). The decline of -0.1% was the first since April 2020.

Looking at the last 6 months of the core PCE annualized, it rose by 1.9%, which suggests the Fed is on it’s way to getting inflation down toward it’s 2.0% target.

Another key release today was the Michigan Final consumer sentiment which saw a rise to 69.7 from 69.4 preliminary and 61.3 last month. For the year, the high reached 71.6 in July, before moving down to 61.3 in November. Rates moving lower and sharply lower oil prices have put the consumer in better spirits to end the year. Also within the report is the confirmation of the 1 year inflation expectations at 3.1%. That was equal to the preliminary estimate and well off the 4.5% in November.

Not so robust today was new homes sales which came lower than expectations at 0.590M annualized rate, the lowest level since November.

In the markets, the data sent yield lower, but the longer ended up backing up and closing marginally higher. Looking at the levels at the end of day:

• 2-year yield 4.3294% down -2.0 basis points. It traded down -3.7 basis points at the low. For the trading week, the 2 year fell -12.2 basis points
• 10-year yield 3.9006%, up 0.7 basis points. It traded down -4.4 basis points at the low for the day. For the trading week, the 10-year yield fell -1.2 basis points
• 30-year yield 4.05%, up 1.9 basis points. It traded down 4.0 basis points at the low for the day. For the trading week, the 30 year yield rose 4.2 basis points

IN the forex market, the major indices are ending the day scrunched together and little changed. The CAD is ending the day as the strongest of the major currencies while the JPY is the weakest, but trading was quiet with little in the way of a definitive price trend. Most of the pairs saw up-and-down price action (or down-and-up).

US stocks closed mixed on the day but the major indices were all higher for their 8th consecutive week.

• Dow industrial average fell -0.05% on the day but managed to close up by 0.22%
• S&P rose 0.19% on the day, and closed up 0.75% for the week
• Nasdaq closed up 0.19% on the day and rose 1.21% for the week.

The small-cap Russell 2000 led the charge for the day and the week with a gain of 0.84% on the day and +2.46% for the week. In December, the index is now up 12.434% accounting for most of the index’s 15.48% gain for the year.

Forexlive will have limited service next week as we celebrate Christmas and New Years. Let me take this opportunity to thank all so you for your support in 2023. We all look forward to another profitable and helpful year in 2024.

Peace on earth. Goodwill to all.

This article was written by Greg Michalowski at www.forexlive.com.

Major US stock indices are closing the day mixed. The Dow Industrial Average is modestly lower while the S&P and NASDAQ closed higher on the day. For the trading week, all the major indices were higher for the eighth consecutive week gain.

A snapshot of the closing level shows:

• Dow Industrial Average fell -18.54 points or -0.05% at 37385.98
• S&P index rose 7.87 points or 0.17% at 4754.63
• Nasdaq index rose 29.10 points or 0.19% at 14992.96

The small-cap Russell 2000 rose 16.89 points or 0.84% at 2033.96

For the S&P index it reached a high today of 4772.94. That came within 14 points of its all-time high close of 4796.57 reached on January 3, 2022.

For the trading week:

• Dow Industrial Average rose 0.22%
• S&P index rose 0.75%
• Nasdaq index rose 1.21%

The Russell 2000 outpaced with a gain of 2.46%

With one week to go in trading for the year, the Nasdaq index is far outpacing the other indices.

• Dow Industrial Average is up 12.79%
• S&P index is up 23.84%
• Nasdaq index is up 43.25%

The Russell 2000 is trading up 15.48%

This article was written by Greg Michalowski at www.forexlive.com.

The price of crude oil futures are settling at $73.56, down -$0.33 or -0.45%.

The high price reached $74.95. The low price extended to $73.41.

For the trading week, crude is up for the second consecutive week. The price is up $1.81 or 2.53%. Last week the price rose $0.54 or 0.75%.

For the trading year, the price is down around -$6.92 or -8.60%.

This week, Angola announce that they were leaving OPEC+ due to disputes on production quotas. Angola’s quota is about 1.1 million barrels or around 2% of OPEC+ output.

The weekly inventory data show that:

• Crude stocks had a build of 2.909 million versus estimates of a drawdown of -2.283 million
• Gasoline stocks had a build of 2.710M vs estimates of a build of 1.233M
• Distilates showed a build of 1.485M vs estimates of a build of 0.496M

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices have give up gains and trade in negative territory

• Dow Industrial Average is trading down -100 points or -0.27% at 37306
• S&P index is down -5.31 points or -0.12% at 4741.35
• Nasdaq index is down -13.70 points or -0.09% at 14949

The small-cap Russell 2000 is still higher on the day by 13.10 points or 0.65% at 2030.13.

Markets are illiquid as traders work toward the Christmas weekend and the last week of the trading year next week.

This article was written by Greg Michalowski at www.forexlive.com.

For both the day and the week, the major European indices closed mixed.

On the day:

• German DAX rose 0.11%
• France CAC, -0.03%
• UK FTSE 100, +0.04%
• Spain’s Ibex, +0.08%
• Italy’s FTSE MIB+0.26%

For the trading week:

• German DAX, -0.27%
• France CAC, -0.37%
• UK FTSE 100, +1.60%
• Spain’s Ibex, +0.16%
• Italy’s FTSE MIB, -0.07%

As we head into the final week, year-to-date gains are showing:

• German DAX, +19.98%
• France CAC, +16.92%
• UK FTSE 100 +3.3%
• Spain’s Ibex, +22.88%
• Italy’s FTSE MIB, +28.04%

Looking at 10-year yield’s in Europe, yields were mostly lower for the week:

• German 1.975%, -5.7 basis points
• France 2.481%, -7.7 basis points
• UK 3.505%, -19.1 basis points
• Spain 2.905%, -10.6 basis points
• Italy 3.560% -17.8 basis points

This article was written by Greg Michalowski at www.forexlive.com.

Headlines:

• US stocks look to make it 8 for 8 ahead of the holidays
• UK November retail sales +1.3% vs +0.4% m/m expected
• UK Q3 final GDP -0.1% vs 0.0% q/q prelim
• Germany November import price index -0.1% vs +0.3% m/m prior
• Japan projects higher interest rates for upcoming budget for the first time in 17 years

Markets:

• CHF leads on the day
• European equities little changed; S&P 500 futures down 0.1%
• US 10-year yields down 3 bps to 3.861%
• Gold up 0.5% to $2,055.53
• WTI crude up 1.0% to $74.62
• Bitcoin down 0.7% to $43,720

Things are truly winding down in financial markets now as we approach the Christmas weekend.

Major currencies were subdued for the most part, with the dollar keeping lightly changed overall but set to end the week lower once again. USD/CHF did ease to its lowest level since 2015 as the pair looks to break the July lows of 0.8550-55.

Besides that, there wasn’t much action even with a strong beat on UK retail sales. GBP/USD is slightly higher by 0.2% to 1.2710 but nothing out of the ordinary on the day.

In other markets, bond yields continue to be pinned down while equities look like it is already in holiday mood. That being said, Wall Street is in the hunt to make it eight straight weeks of gains and look to tee up a potential upside break heading into the new year.

But for now, the festive period is going to keep things on ice in all likelihood. I wish everyone the best of holidays and a very Merry Christmas to those celebrating! Have a wonderful weekend. 🙂

This article was written by Justin Low at www.forexlive.com.

It has been a rather challenging year for oil. From talks of tighter market conditions to slowing economies across the globe, there were arguments to both sides of the story. And that is also reflected somewhat in price action, with the high for WTI crude being at $95 at the end of September before sinking back lower in the past two months as markets step up rate cuts pricing.

The fortunate thing for oil prices is that buyers have stepped up when it mattered most. At each point during the course of the year the 200-week moving average (green line) was tested, they managed to keep a defense of that. And even when things were looking rather gloomy last week, they managed to barely turn it around towards the end.

And so for this year, oil is still down over 7% but if not for the defense at the 200-week moving average seen above, it really could’ve been much worse.

So, what’s next as we move towards 2024?

The outlook is mostly leaning towards bearish side amid economic and energy-transition headwinds. As such, OPEC+ will have an important role in trying to at least keep a floor on prices with deeper production cuts. That being said, if economic conditions aren’t as bad as feared, that could still stimulate higher demand and keep the market tight. That is one consideration to be mindful about, especially since lower prices will also help to lift demand conditions in general.

This article was written by Justin Low at www.forexlive.com.

The Japanese Ministry of Finance just announced that it will cut spending for the first time in 12 years in the 2024/25 budget, as they prepare for a shift away from ultra easy monetary policy settings. The budget is estimated around ¥112 trillion, down 2% from the current year’s initial amount of roughly ¥114 trillion.

In estimating borrowing costs, the government has now assumed higher interest rates – which is the first increase in 17 years. They are projecting interest rates at 1.9%, up from the current 1.1%, and that will push the debt-servicing costs up by 7% to ¥27 trillion in the upcoming fiscal year.

This article was written by Justin Low at www.forexlive.com.

• Eurostoxx -0.1%
• Germany DAX -0.1%
• France CAC 40 flat
• UK FTSE -0.2%
• Spain IBEX flat
• Italy FTSE MIB -0.1%

The Christmas weekend is upon us, so there shouldn’t be much else to really catch traders‘ attention today. It’s shaping up to be a tepid end to the week, although US stocks will be hoping to carry on some of the recent good form to next year.

This article was written by Justin Low at www.forexlive.com.