Market Update 17/12/2024

• Wall Street started the week strong, with the Nasdaq up 1.3%, S&P 500 up 0.5%, and the Dow Jones unchanged in the final hours of the North American session. U.S. 2-year and 10-year Treasury yields remained stable, while crude oil fell 0.9% to $70.60 per barrel. Before the Asian market opened, AUD/USD traded in a range of 0.63455/0.6382, eventually settling around 0.6365/70.

• Asian stocks began the week on a weak note, with the Hang Seng down 0.9%, CSI 300 down 0.5%, and the Nikkei flat. Locally, the Australian Securities Exchange fell 0.6%, dragged down by the materials sector which closed 2% lower. As London opened, AUD/USD was near 0.6370 in a relatively quiet Asian trading session.

• China’s November retail sales grew 3% year-on-year, below the expected 5%, while industrial production grew 5.4% year-on-year, in line with expectations. USD/CNH edged higher during the session, reaching a high of 7.2950.

• A series of PMI data from the Eurozone showed mixed results. France’s December preliminary manufacturing PMI came in at 41.9 (expected 43.0) and services at 46.0 (expected 46.7). Germany’s PMI showed services rising to 51.0 (expected 49.3) and manufacturing at 43.1 (expected 42.5). ECB President Lagarde also spoke, indicating further rate cuts and a clear direction. EUR/USD showed little reaction to these comments, slightly up for the day at 1.0520.

• European stocks opened lower, with Euro Stoxx 50 down 0.2%, CAC down 0.4%, and DAX down 0.3%. More PMI data from the UK showed December preliminary services at 51.4 (expected 50.0) and manufacturing at 47.3 (expected 48.5). The pound sterling rose after the data release, up 20 points to a high of 1.26715. Elsewhere, the dollar gained modestly, with AUD/USD falling to a low of 0.6350 and USD/CAD rising to a high of 1.4245.