- Fed's Williams: If we get the progress I'm hoping to see, it will be natural to cut
- Fed's Goolsbee: The unemployment rate tends to go up rapidly
- US November services PMI from S&P Global 51.3 vs 50.6 expected
- US November industrial production +0.2% vs +0.3% expected
- Empire Fed Manufacturing index for December -14.5 vs 2.00 estimate.
- BOC's Macklem: The 2% inflation target is now in sight
- More from Macklem: It's too early to start discussing whether to cut rates in Canada
- Macklem: Data since last decision increasingly polnting to progress
- ECB's Nagel: German exports and private consumption are weak
- US CBO boosts 2023 US GDP growth forecast to +2.5% from +0.9% in July
- Shipping giant Maersk tells all its ships to pause Red Sea voyages - report
- Canada wholesale trade for October -0.5% versus -1.1% expected
- Canada November housing starts 212.6K vs 257.K1 expected
Markets:
- US 10-year yields down 1.7 bps to 3.91%
- Gold down $17 to $2018
- S&P 500 down 0.2%
- WTI crude up 17-cents to $71.75
- CAD leads, EUR lags
This market had all the hallmarks of one that was looking to retrace coming into New York trade. There had been a huge move since the FOMC and it was a Friday. Everyone was waiting for some kind of pushback from Williams on Powell's dovish comments. When he said "We aren't really talking about rate cuts right now" that was enough, even though the full context of that comment wasn't materially different from Powell, it was enough.
The dollar jumped and stocks gave back pre-market gains. The dollar gave back most of that move in the following hour but the S&P Global services data was also strong and that was enough to keep the bid alive, especially after another round of weak eurozone data.
EUR/USD finished the day down 97 pips on steady selling after touching 1.10 yesterday but failing to break the November high of 1.1017. Cable had been flat heading into NY trade but ultimately finished down 91 pips.
Elsewhere the dollar wasn't a strong as it gained a quarter-cent against the yen and traded choppy but eventually flat against the antipodeans. The Canadian dollar put in the top performance with the help of some hawkish comments from Macklem.
Have a great weekend.
