Markets Eye German Inflation and US Factory Orders
The first Monday of 2025 starts with key updates from Europe and the United States. German Inflation data, investor confidence, and US factory orders are out later today. Energy and metals markets reflect a mix of sentiment. Currency movements remain cautious as traders weigh incoming economic reports.
Key Data Out Today
- Europe:
- German Composite PMI (Dec): Steady at 47.8, reflecting ongoing challenges in the Eurozone’s economic recovery.
- German CPI (Dec): Expected to rise by 0.4% MoM and 2.4% YoY, indicating persistent inflationary pressures.
- Sentix Investor Confidence (Jan): Forecast at -17.5, pointing to subdued sentiment entering the new year.
- United States:
- S&P Global Composite PMI (Dec): Expected at 56.6, suggesting ongoing strength in US business activity.
- Factory Orders (Nov): Forecast at -0.3%, indicating potential softening in industrial demand.
Energy & Precious Metals
Energy
- Crude Oil: WTI at $73.60 (-0.49%) and Brent at $76.11 (-0.52%), showing minor pullbacks after last week’s gains.
- Natural Gas: Rose by 8.12% to $3.63/MMBtu, supported by weather-related demand.
- Heating Oil: Down 0.39% at $2.35/gal, reflecting stable supply.
Metals
- Gold: Slightly lower at $2628.02/oz (-0.39%), with safe-haven demand tapering off.
- Silver: Higher by 0.19% at $29.67/oz, driven by steady industrial usage.
Currency Movements
EUR/USD
- EUR/USD: Trading at 1.0338, up 0.28% for the day. The euro has depreciated by approximately 5.58% year-over-year against the U.S. dollar, influenced by differing economic growth rates and monetary policies between the Eurozone and the United States.
GBP/USD
- GBP/USD: At 1.2470, showing a daily increase of 0.38%. Despite a 2.19% year-over-year decline, the British pound concluded 2024 as the top-performing major currency against the U.S. dollar. Resilient UK economic data supported its performance. Interest rate expectations between the Bank of England and the Federal Reserve were closely aligned.
AUD/USD
- AUD/USD: Trading at 0.6242, a daily rise of 0.45%. The Australian dollar has declined by 7.09% year-over-year, impacted by global risk sentiment and fluctuations in commodity prices, which are vital to Australia’s export-driven economy.
NZD/USD
- NZD/USD: At 0.5634, up 0.36% today. The New Zealand dollar has seen a 9.85% year-over-year decrease. It is influenced by similar factors affecting the Australian dollar. These include shifts in global commodity demand and investor risk appetite.
USD/JPY
- USD/JPY: Standing at 157.758, up 0.30% today. The Japanese yen has weakened by 9.39% over the past year, reaching multi-month lows against the dollar. This trend is attributed to rising U.S. Treasury yields. Additionally, the Bank of Japan remains committed to maintaining ultra-loose monetary policy. This is despite market speculation about potential policy adjustments.
USD/CNY
- USD/CNY: Trading at 7.3546, a slight daily decrease of 0.05%. The Chinese yuan has depreciated by 2.70% over the past year against the dollar. Recent actions by the People’s Bank of China aim to manage economic stability. These actions include warnings to mutual funds against aggressive bond buying. They also focus on currency valuation.
USD/CHF
- USD/CHF: At 0.9072, down 0.14% today. The Swiss franc has weakened by 6.99% year-over-year against the dollar. Its safe-haven appeal fluctuates in response to global economic uncertainties. The monetary policy decisions by the Swiss National Bank also affect its appeal.
USD/CAD
- USD/CAD: Standing at 1.4377, a daily decrease of 0.49%. The Canadian dollar has depreciated by 7.74% over the past year, influenced by oil price volatility and differing economic indicators between Canada and the United States.
USD/MXN
- USD/MXN: Trading at 20.6116, down 0.10% today. The Mexican peso has declined by 22.56% year-over-year against the dollar, affected by factors such as U.S. monetary policy tightening and domestic economic challenges.
USD/INR
- USD/INR: At 85.8265, up 0.08% today. The Indian rupee has weakened by 3.35% over the past year, with depreciation pressures stemming from global economic conditions and capital flow dynamics.
Things to Keep an Eye On
- German CPI Data: The German inflation trend will influence Eurozone monetary policy outlooks.
- US Factory Orders: A weak reading could signal cooling industrial demand.
- Energy Price Trends: Focus on natural gas and crude oil as market sentiment stabilizes.
- PMI Readings: Both in Europe and the US, these figures remain key for market direction.