From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar is trading firmer against nearly all the G10 currencies. The yen is the best performer, and it is virtually flat despite the swing toward BOJ hike next month. Expectations have steadied for a Fed cut next month around 80%. The November inflation reports from the largest eurozone members failed to inspire the market and the euro's four-day advance is being threatened. Sterling's favorable reaction to the government's budget stalled yesterday near $1.3270 after starting the week below $1.3100. Emerging market currencies are mixed. The Chinese yuan is a little firmer, even though the PBOC lifted the dollar's fix for the first time in six sessions.
Global equities are mostly higher. Markets in the Asia Pacific region were mixed, though, with losses in Samsung and SK Hynix dragging South Korea's Kospi down by 1.5%, though small cap stocks did better. The Hang Seng and mainland stocks that trade there fell. Europe's Stoxx 600 is little changed after advancing in the first four sessions this week. US index futures are firm. Benchmark 10-year yields are little changed and mostly narrowly mixed in Europe. The US 10-year yield, which settled below 4% on Wednesday, is barely above there now. Gold is firm, but the earlier momentum that carried it to a new two-week high (~$4193) has eased. Initial support now is seen around $4150. Oil is firmer ahead of the weekend OPEC+ meeting. January WTI is at a new high for the week, a little above $59.
USD: The Dollar Index fell for the fourth consecutive session yesterday to reach 99.40. It is threatening to snap that streak today and is consolidating between about 99.50 and 99.80 today. The market expectations have swung hard toward a Fed cut next month, but with a little more than an 80% chance now discounted, the pendulum might have swung as far as it might, pending more data, and today's calendar is empty. The Fed's quiet period ahead of the FOMC meeting begins this weekend, and the lack of opportunity makes it difficult for officials to push back against expectations. The market will be sensitive to articles written by journalists who cover the Federal Reserve closely, as some are wary of a repeat of past efforts when it appeared stories were planted to help shape expectations during the run-up to an FOMC meeting....
....MUCH MORE
Indeed.
