Market Commentary: Friday 13th December

GBPUSD is lower this morning at 1.2640, following news that the UK economy shrank by 0.1% in October, against a consensus expectation of a 0.1% gain. The mood in Asia is also subdued, with the Nikkei down 0.95% and the Hang Seng dropping 1.8%. Iron Ore prices fell 2% in Singapore amid a lack of concrete details from China’s economic gathering. Officials, led by President Xi Jinping, pledged to increase borrowing and spending in 2025 following the Central Economic Work Conference (CEWC) in Beijing, but the policy measures remain vague.

Looking back at yesterday, the European Central Bank cut borrowing costs by 25 basis points, the Swiss National Bank surprised markets with a 50 basis point cut, and the Central Bank of Brazil not only raised rates but signaled it would implement 100bp hikes in each of the next two meetings.

Today’s focus will be on Eurozone industrial production, the US Import/Export Price Index, and Canadian wholesale data.

Market-wise:

• The yield on 10-year Treasuries continues to climb, reaching 4.32%.
• Bitcoin rose 0.3% to $100,103.42, while Ether gained 1.5% to $3,925.61.
• West Texas Intermediate crude was steady at $70.15 a barrel.
• Spot gold opens the session at $2,683.65 an ounce.

It’s starting to feel as though the festive season is kicking in. Wishing you all a great weekend!

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