Home › Market News › Natural Gas, US Dollar, and Japanese Yen Futures Updates
The Economic Calendar:
MONDAY: S&P Global Manufacturing Index (8:45a CT), Construction Spending (9:00a CT), ISM Manufacturing Index (9:00a CT), Fed Waller Speech (2:15p CT), Fed Balance Sheet (3:30p CT), Fed Williams Speech (3:30p CT)
TUESDAY: Redbook (7:55a CT), JOLTs (9:00a CT), RCM/TIPP Economic Optimism Index (9:10a CT), Fed Kugler Speech (11:35a CT), Fed Goolsbee Speech (2:45p CT)
WEDNESDAY: MBA Mortgage Applications (6:00a CT), ADP Employment Change (7:15a CT), Fed Musalem Speech (7:45a CT), S&P Global Composite PMI (8:45a CT), Factory Orders (9:00a CT), ISM Services Index (9:00a CT), EIA Petroleum Status Report (9:30a CT), Fed Chair Powell Speech (12:45p CT), Fed Beige Book (1:00p CT)
THURSDAY: Challenger Job Cuts (6:30a CT), Balance of Trade (7:30a CT), Jobless Claims (7:30a CT), Import/Export Prices (7:30a CT), EIA Natural Gas Report (9:30a CT), Fed Barkin Speech (10:30a CT), Fed Balance Sheet (2:30p CT)
FRIDAY: November Jobs Report (7:30a CT), Used Car Prices (8:00a CT), Fed Bowman Speech (8:15a CT), University of Michigan Consumer Sentiment (9:00a CT), Total Vehicle Sales (9:00a CT), Fed Goolsbee Speech (9:30a CT), Fed Hammack Speech (11:00a CT), Baker Hughes Rig Count (12:00p CT), Fed Daly Speech (12:00p CT), Consumer Credit Change (2:00p CT)
Key Events:
Traders are focused on jobs data on Friday. Below, find the street estimates.
Source: TradingEconomics
The stock market has experienced a strong upward trend, with the S&P 500 and NASDAQ 100 posting gains of 1.18% and 0.78%, respectively, for the week. November has been particularly favorable, with the S&P 500 and NASDAQ 100 gaining 3.89% and 2.69%, respectively.
The Russell 2000, which tracks small-cap stocks, outperformed the broader market, rising 9.23% in November. The Energy, Financials, and Consumer Discretionary sectors led the charge, with gains of 8.5%, 8.9%, and 11.1%, respectively.
Some analysts, like Deutsche Bank, predict the S&P 500 could reach 7,000 points next year. Many factors fuel this optimistic outlook, including strong corporate earnings, economic recovery, and accommodative monetary policy.
The probability of a 25 basis point rate cut at the December 18th meeting is now 66%, up from 52% a week ago.
Recent economic data, including inflation figures and labor market reports, has reinforced the Federal Reserve’s stance on interest rates. With a strong labor market and continued economic growth, the central bank should not rush to implement rate cuts.
U.S. Core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure of inflation, increased 2.8% from October last year and 0.3% from a month earlier.
Per market expectations, the U.S. Q3 GDP came in at 2.8% on Wednesday. While still strong, household spending was revised modestly lower from the initial reading, reflecting slightly less robust merchandise outlays.
Source: CME Group
Could this be the sovereign risk nobody was expecting?
France’s long-term borrowing costs have surged to levels comparable to Greece’s, sparking concerns about the country’s economic stability. This development is primarily attributed to the ongoing political turmoil and uncertainty surrounding the government’s ability to pass a budget and implement necessary fiscal reforms.
Prime Minister Michel Barnier’s government faces a potential no-confidence vote from Marine Le Pen’s far-right National Rally party. This political standoff has heightened market anxiety, as a government collapse could lead to increased market volatility and further pressure on French bond yields.
The rising yield spread between French and German government bonds reflects investor concerns about France’s fiscal health and ability to meet its debt obligations. French bond yields could rise even further if the political situation deteriorates, potentially leading to a broader contagion effect across European markets.
U.S. natural gas futures climbed last week, fueled by various factors. Weather forecasts predict colder temperatures across the Midwest and Eastern areas of the country over the next two weeks, which should significantly increase demand for heating.
This positive demand outlook was further bolstered by strong liquefied natural gas (LNG) exports exceeding 14 billion cubic feet per day over the past few days.
The benchmark Nymex Henry Hub contract for December delivery settled at $3.363 per million British thermal units (mmBtu), representing a 5% increase on the day and a 2.3% gain for the week. This uptick comes after a monthly gain of 24%.
Despite the recent price rise, some analysts anticipate a potential shift in the coming week. Additionally, some analysts predict higher production and moderating weather patterns, which could lead to downward pressure on prices over the next 7-10 days.
The U.S. dollar has been a strong performer in recent months, driven by factors such as robust economic growth, rising interest rates, and geopolitical uncertainties. However, the currency has experienced some recent weakness due to end-of-month portfolio rebalancing and thin holiday trading volumes.
Despite this short-term pullback, the dollar’s long-term outlook remains positive. Federated Hermes’ John Sidawi believes that the dollar’s exceptional status is unlikely to diminish in 2025, as there is no evidence of significant economic or geopolitical shifts that could undermine its strength.
The dollar’s performance will continue closely tied to U.S. monetary policy. As the Federal Reserve navigates the economic landscape, its interest rates and quantitative tightening decisions will significantly impact the dollar’s value. Additionally, the relative performance of the U.S. economy compared to other major economies will play a crucial role in determining the dollar’s strength.
Source: TradingView
The Japanese Yen futures surged 1.2% to a six-week high against the dollar on Friday after Tokyo’s inflation data fuelled expectations of a Bank of Japan rate hike next month.
Core consumer prices in Japan rose 2.2% in November from a year earlier, higher than the Japanese Central Bank target of a 2% inflation rate.
Traders see a 57% chance of a 0.25% hike in the upcoming central bank meeting.
Source: TradingView
Your morning coffee fix could be going up in price soon…
Coffee prices are hitting 50-year highs, and futures on the ICE exchange are trading at $3.18050 per lb, having hit their highest since 1977 at $3.3545.
Prices for arabica coffee have risen by about 75% this year, making it one of the strongest-performing commodities.
Coffee prices have surged to their highest levels in over half a century, driven by a combination of factors:
Source: TradingView
We are still on the quest for $100000 BTCUSD. After a brief pullback early in the week to $91000, the price rallied to a high of $98600 by Friday.
Bitcoin, often touted as a digital gold, has shown a surprising correlation with traditional risk assets like stocks. This challenges the notion of Bitcoin as a completely uncorrelated asset.
Historically, Bitcoin has tended to move in tandem with the NASDAQ, particularly during periods of heightened risk appetite. This suggests that broader market sentiment and economic conditions influence Bitcoin’s price.
While Bitcoin has recently reached a fair value relative to the NASDAQ, historical patterns indicate further upside potential. However, traders should be aware of the risks of increased volatility and potential economic downturns.
As the market enters a potentially more exuberant phase, traders may face challenges managing Bitcoin’s volatility. It’s crucial to monitor economic indicators, geopolitical events, and regulatory developments that could impact Bitcoin’s price.
