Macroeconomic/ geopolitical developments
- US stocks averages hit multi month highs marking the longest weekly winning streak for US stocks since 2017, with the DJIA at a new record high. The market rally followed the Federal Reserve’s notable shift to a more dovish tone.
- US CPI mostly in line with expectations, seeing a 3.1% year-over-year increase for November, a slight decrease from October’s 3.2% and a significant drop from the June 2022 peak of 9.1%. On a monthly basis, the CPI inched up by 0.1%, rebounding from a flat reading in October.
- US Retail Sales beats consensus, increasing 0.3% in November following a 0.2% dip in October. Year-on-year, sales also increased in November, by 4.1%.
- Fed pivots dovish making the decision to hold interest rates steady, signalling the end of a two-year tightening policy, has led to a surge in market optimism,
- The ECB kept a more hawkish stance, remaining committed to maintaining tight monetary policies well into the next year. This dispelled any optimism that the Federal Reserve’s shift toward rate cuts signalled a global shift.
Global financial market developments
- US and global equity index futures pushed still higher, staying fully in bull mode.
- US and European yields saw significant lower yield moves to multi-month yield lows
- The US Dollar Index plunged, renewing bull forces, rejecting the prior correction higher, and stays in a bigger bear mode.
- Gold futures rebounded after the setback from the spike to an all-time high.
- Oil futures consolidated near recent bear move lows, sustaining bearish forces.
Key this week
Central Bank Watch: A quieter week for Central Banks, we get the Reserve Bank of Australia (RBA) Meeting Minutes and Bank of Japan (BoJ) Monetary Policy decision, statement and conference on Tuesday, then the People’s Bank of China (PBoC) Interest Rate Decision Wednesday.
Macro Data Watch: CPI data is released from the EU, Canada and the UK on Tuesday and Wednesday, key data to watch from the US will be Wednesday’s Consumer Confidence release, then Friday brings US PCE (MoM, YoY) and the Michigan Consumer Sentiment Index.
| Date | Major Macro Data |
| 12/18/2023 | German IFO Survey |
| 12/19/2023 | RBA Meeting Minutes; BoJ Monetary Policy decision, statement and conference; EU Harmonized Index of Consumer Prices; Canadian CPI |
| 12/20/2023 | PBoC Interest Rate Decision; UK inflation report, including CPI; German Consumer Confidence Survey; US Consumer Confidence; EU Consumer Confidence |
| 12/21/2023 | US GDP and PCE (QoQ); Canada Retail Sales |
| 12/22/2023 | Japan CPI; UK GDP and Retail Sales; US PCE (MoM, YoY) and Durable Goods; Canada GDP; Michigan Consumer Sentiment Index |
