2025-12-18 21:30:00
Markets:
- WTI crude flat at $56.04
- US 10-year yields down 3.3 bps to 4.12%
- Gold down $10 to $4330
- S&P 500 up 0.8%
- EUR lags, AUD leads
For such a lively day in terms of economic data, the FX market was surprisingly flat at the finish. The moves have been limited to 16 pips or less, with a modest decline in the euro as the most-notable move. It came as an ECB sources report following the decision highlighted that the governing council isn’t ready to let go of dovish optionality, given a number of risks to growth next year.
The CPI report sparked some serious confusion. The big downside miss on headline and core initially sparked USD selling but skepticism arrived shortly afterwards. The BLS chose not to estimate a number of items and instead left them as zeros for October’s data. This is the first real report since the government shutdown and the inability to collect data during that period forced a series of assumptions. For what it’s worth, two-year yields are virtually flat since the report even with Goolsbee offering a dovish take.
The Bank of England decision was not a big surprise but initially led to some good sized GBP bids as cable ran to 1.3448 in a nearly 1 cent rally. It couldn’t hold on though and gave the vast majority back, in part due to some more-dovish comments from Bailey later.
Gold went on a $40 round trip to $4371 and back down to $4331 while silver cooled a tad from its earlier record.
The big winner on the day was stocks in part due to a huge revenue beat from Micron. Megacap tech was bid and the Nasdaq led the way in a partial reversal following four days of declines. Is Santa finally arriving to the market? Fedex reported after the bell and the early indications are 4% and that’s good news from the economic bellwether.
