Market Commentary: January 3, 2025
The first Friday of 2025 kicks off with a mix of Eurozone labor data and US manufacturing updates. German unemployment figures stand out today. The ISM Manufacturing PMI is also significant. Markets start the day steady on both the commodity and currency front.
Key Data Out Today
- Eurozone:
- German Unemployment Change (Dec): Forecasts suggest an increase of 15K. This is up from the previous 7K. It potentially signals slowing labor market momentum.
- German Unemployment Rate (Dec): Expected at 6.2%, up from 6.1%, highlighting possible challenges for the region’s economy.
- United States:
- ISM Manufacturing PMI (Dec): Expected at 48.4, indicating contraction in the manufacturing sector for a second consecutive month.
- ISM Manufacturing Employment and Prices Paid: Will provide insight into cost pressures and labor conditions in the manufacturing industry.
Energy & Metals
Energy:
- Crude Oil: WTI at $73.06 (-0.09%), and Brent at $75.89 (-0.04%). Prices are steady after a strong weekly performance, supported by demand optimism.
- Natural Gas: Declined by 3.71% to $3.52/MMBtu, reflecting milder weather forecasts reducing short-term demand.
- Propane: Surged by 8.89% to $0.85/gal, driven by inventory drawdowns and seasonal demand.
Metals:
- Gold: Slightly lower at $2655.02/oz (-0.13%), as traders book profits after recent gains.
- Silver: Gained 0.35% to $29.63/oz, supported by industrial demand stability.
Currency Movements
EUR/USD:
EUR/USD: Up 0.15% at 1.0282, as markets digest upcoming German labor data.
GBP/USD:
GBP/USD: Higher by 0.13% to 1.2396, showing resilience despite weak UK momentum.
AUD/USD:
AUD/USD: Gained 0.16% to 0.6212, reflecting steady support for commodity-linked currencies.
NZD/USD:
NZD/USD: Up 0.09% to 0.5600, but broader USD strength limits the upside.
USD/JPY:
USD/JPY: Lower by 0.25% at 157.10, reflecting some demand for the yen as US bond yields ease.
USD/CHF:
USD/CHF: Down 0.24% to 0.9101, showing weakness as safe-haven flows shift.
USD/CAD:
USD/CAD: Flat at 1.4398 (-0.03%), as oil prices stabilize.
USD/MXN:
USD/MXN: Slightly higher at 20.61 (+0.03%), reflecting cautious trading sentiment.
USD/INR:
USD/INR: Flat at 85.77 (-0.03%), as markets weigh global risk sentiment.
Things to Watch
- German Labor Market Data: Any signs of weakening could impact EUR sentiment.
- ISM Manufacturing PMI: A key gauge of US industrial health; a weaker reading could weigh on the USD.
- Energy Market Trends: Focus on crude oil inventory data and natural gas demand forecasts.
- ECB and Fed Speeches: ECB’s Lane and Fed’s Barkin could provide hints about future monetary policy directions.
Markets are watching for signs of resilience or deterioration in the German labor market and US manufacturing activity. Energy and metals markets remain steady, while currency pairs show cautious movement ahead of key speeches and data releases.