UK House Prices Rise Amid Cautious Trading
Market Commentary: January 2, 2025
The first trading day of 2025 starts with mixed data from the UK. Starting with stronger-than-expected house price growth. However, also a weak PMI reading. Meanwhile, US employment and crude oil inventory data are in focus later today. Energy and metals markets are steady, while currency pairs reflect cautious trading sentiment.
Key Data Out Today
- UK House Prices (Nationwide):
- MoM: 0.7%, beating forecasts of 0.1% (previous: 1.2%).
- YoY: 4.7%, higher than the 3.8% forecast (previous: 3.7%).
- UK PMI (Markit): Due at 09:30, forecast at 47.3, signaling ongoing contraction in the manufacturing sector.
- US Initial Jobless Claims (WoW): Expected at 222K, up from the previous 219K.
- EIA Crude Oil Inventory: Forecast at -2.75M barrels (previous: -4.23M), indicating tighter supply.
Energy & Metals
Energy:
- Crude Oil: WTI at $71.92 (+0.28%), Brent at $74.86 (+0.30%). Rising optimism around Chinese demand is supporting prices.
- Natural Gas: Up 2.13% to $3.68/MMBtu, driven by seasonal demand and weather forecasts.
- Heating Oil: Slight decline (-0.11%) to $2.31/gal, reflecting balanced supply-demand dynamics.
Metals:
- Gold: Higher at $2638.22/oz (+0.53%), supported by safe-haven demand as markets assess economic risks.
- Silver: Up 1.53% to $29.32/oz, showing stronger momentum relative to gold.
Currency Movements
EUR/USD:
Trading at 1.0360 (+0.02%), reflecting stable Eurozone sentiment despite weak inflation pressures.
GBP/USD:
Lower at 1.2493 (-0.21%), weighed down by weak UK PMI expectations.
AUD/USD:
Higher at 0.6212 (+0.37%), supported by gains in commodity-linked currencies.
NZD/USD:
Slightly higher at 0.5616 (+0.42%), though underperforming its Australian counterpart.
USD/JPY:
Down 0.31% to 156.86, as traders take profits on recent gains in the dollar.
USD/CNY:
Trading lower at 7.3250 (-0.17%), reflecting mild yuan strength amid improved Chinese economic sentiment.
USD/CHF:
Lower at 0.9050 (-0.27%), indicating modest demand for safe-haven currencies.
USD/CAD:
Up 0.23% to 1.4411, with CAD underperforming despite higher oil prices.
USD/MXN:
Lower at 20.79 (-0.31%), as the peso remains resilient against the dollar.
USD/INR:
Down 0.26% to 85.73, reflecting balanced flows in emerging market currencies.
Things to Watch
- UK PMI: A weaker reading could pressure GBP further as manufacturing continues to struggle.
- US Jobless Claims: Any surprises could influence Fed expectations and USD performance.
- EIA Crude Oil Report: Inventory changes will guide near-term price action in the energy market.
- Commodity Prices: Volatility in natural gas and metals could drive currency-linked moves.
Markets are starting the year with cautious optimism. Key data releases and energy dynamics set the tone for the day.