Articles

• Tech and consumer lead US stocks higher; Utilities and energy drag down market
• The US Federal Reserve rate decision the highlight next week
• US consumer credit for October $9.18 billion versus $10.50 billion estimate
• The World Cup of foreign exchange begins
• Baker Hughes oil rig count +6 to 413
• Most major European indices close lower and near lows for the day
• Trump says he’s getting along very well with Canada and Mexico
• Bessent: China agreement is going well
• G7 and EU in talks on full ban on Russian maritime services
• USDINR Technicals: USDINR sellers took their shot, but missed. Buyers are back in control.
• US personal income for September 0.4% versus 0.3%. PCE for September 0.3% versus 0.3% exp
• December prelim UMich consumer sentiment 53.3 vs 52.0 expected
• Tech sector rallies: semiconductor stocks soar, Netflix drags entertainment sector down
• ECB’s Villeroy: We are in a good position, not a comfortable one
• Canadian dollar rises to ten-week high after the third strong jobs report in a row
• Canadian November employment change +53.6K vs -5.0K expected
• The USD is mixed to start the NA session. What are the technicals telling traders?
• investingLive European markets wrap: Dollar steadies on calmer risk appetite, eyes on Fed

The USD is closing mixed on the day with the USD moving the most vs the CAD after stronger Canada GDP data. The USDCAD fell by -0.93% and closed below its 100 and 200 day MAs above and below the 1.3900 level (see technical post here).

The USD was also lower vs the AUD (by -0.44%). For that currency pair, it rose around 1.4% this week – the biggest mover for the week (see post here).

The other changes vs the major currencies were more modest on the day:

• EUR: Unchanged
• GBP -0.01%
• CHF +0.11%
• NZD -0.23%

As mentioned, Canada delivered a much stronger-than-expected November jobs report, posting a 53.6K employment gain versus a -5.0K decline expected, following +66.6K in October. The unemployment rate dropped to 6.5%, well below the 7.0% forecast, though partly helped by a dip in the participation rate to 65.1% from 65.3%. The composition was mixed: full-time employment fell by 9.4K, while part-time jobs surged by 63.0K, down from the prior month’s 85.1K. Wage growth for permanent employees held steady at 4.0% year-over-year. After months of conflicting signals — weak data in July/August followed by strong prints in September/October — this report delivers a decisive upside surprise, pushing joblessness sharply lower and contradicting expectations of labor-market cooling. With the Bank of Canada already signaling a pause, today’s data raises the possibility of renewed tightening discussions and may prove a game-changer for the Canadian dollar. The move below the 100/200 day moving averages increased the bearish bias.

In the US, the U.S. personal income rose 0.4% in September, beating expectations of 0.3%, while personal consumption increased 0.3%, matching forecasts. Headline PCE inflation rose 0.3%, keeping the year-over-year rate at 2.8%, its highest level in a year. Core PCE, the Fed’s preferred inflation gauge, increased 0.2% on the month, with the YoY rate holding at 2.8%, slightly below the 2.9% expected. Excluding food, energy, and housing, PCE rose 0.2%, unchanged from last month. Overall spending climbed by $65.1 billion, driven overwhelmingly by a $63.0B increase in services and $2.1B in goods, showing that consumer demand remains steady even as inflation edges higher.

The preliminary December University of Michigan Consumer Sentiment Index rose to 53.3, beating expectations of 52.0 and improving sharply from 50.3 previously. The current conditions component softened slightly to 51.0 (vs. 51.3 expected and 52.3 prior), while expectations jumped to 52.1 (vs. 51.2 expected and 49.0 prior), signaling improving forward-looking sentiment. Inflation expectations eased meaningfully: one-year inflation fell to 4.1% from 4.7%, and five-year inflation slipped to 3.2% from 3.6%. While the UMich survey has known limitations, the Fed still monitors it closely, and the drop in inflation expectations represents a clear green light for potential rate cuts—a development equity markets typically welcome.

Looking at the US stock market, the major indices moved mostly higher to end the week:

• Dow industrial average +0.22%
• S&P index +0.19%
• NASDAQ index +0.31%

For the trading week:

• Dow industrial average but 0.50%
• S&P index +0.19%
• NASDAQ index +0.91%

In the US debt market, yields were higher

• 2-year yield 3.562%, +3.4 basis points
• 5 year yield 3.714%, +3.2 basis points
• 10 year yield 4.139%, +3.1 basis points
• 30 year yield 4.794%, +3.1 basis points

Looking at other markets:

• Crude oil rose $0.47 or 0.79% t $60.14
• Gold fell $10.46 or -0.25% to $4197.45
• Silver rose $1.19 for 2.10% to $58.29
• Bitcoin reversed back to the downside today with a decline of $-3084 to $89,022.

This article was written by Greg Michalowski at investinglive.com.

The Federal Reserve will announce or interest rate decision on Wednesday at 2 PM ET. Fed chair Powell will speak at 2:30 PM ET.

The Fed decision is 1 of 4 central bank decisions next week. The reserve Bank of Australia will announce their rate decision on Monday night in the US (10:30 PM ET) The expectations are for no change at 3.60%. The Bank of Canada – coming off a 2nd consecutive strong employment report – is also expected to keep rates unchanged will announce on Wednesday at 9:45 AM (rate is currently at 2.25%). Finally, the Swiss National Bank is expected to keep rates unchanged at 0.0% when they announce on Thursday morning.

Of note is that the US employment report which typically would have been released today will be released until December 16. CPI data is also delayed until after the FOMC rate decision.

Below is a list of the major economic releases of events next week.

Monday, Dec 8

• 10:30pm AUD – Cash Rate: Forecast 3.60%, Previous 3.60%

• AUD – RBA Rate Statement

• 11:30pm AUD – RBA Press Conference

Tuesday, Dec 9

• 4:00am JPY – BOJ Gov Ueda Speaks

• USD – ADP Weekly Employment Change: Forecast — , Previous –13.5K

• 10:00am USD – JOLTS Job Openings: Forecast 7.14M, Previous —

Wednesday, Dec 10

• 8:30am USD – Employment Cost Index q/q: Forecast 0.9%, Previous 0.9%

• 9:45am CAD – BOC Rate Statement

• CAD – Overnight Rate: Forecast 2.25%, Previous 2.25%

• 10:30am CAD – BOC Press Conference

• 2:00pm USD – Federal Funds Rate: Forecast 3.75%, Previous 4.00%

• 2:00pm USD – FOMC Economic Projections

• 2:00pm USD – FOMC Statement

• 2:30pm USD – FOMC Press Conference

• 7:30pm AUD – Employment Change: Forecast 20.3K, Previous 42.2K

• 7:30pm AUD – Unemployment Rate: Forecast 4.4%, Previous 4.3%

Thursday, Dec 11

• 3:30am CHF – SNB Monetary Policy Assessment

• 3:30am CHF – SNB Policy Rate: Forecast 0.00%, Previous 0.00%

• 4:00am CHF – SNB Press Conference

• 8:30am USD – Unemployment Claims: Forecast 221K, Previous 191K

Friday, Dec 12

• 2:00am GBP – GDP m/m: Forecast 0.1%, Previous –0.1%

This article was written by Greg Michalowski at investinglive.com.

• Prior month $11.01 billion revised from $13.09 billion
• Consumer credit for the month of October $9.18 billion versus $10.50 billion expected

This article was written by Greg Michalowski at investinglive.com.

The World Cup is in the USA, Canada and Mexico this year. The World Cup draw is underway now and the first three matchups drawn are:

1. Mexico-Korea
2. Canada-Switzerland
3. USA-Australia

Those are fairly good draws for the hosts in what’s sure to be a fun summer. But while countries compete on the football pitch, they also compete in the world economy. The best way to measure that is often in the foreign exchange market.

So with that, here are the competing currencies.

We all know Canada will win the real World Cup trophy, but which is going to be the best-performing currency between now and the July 19, 2026 World Cup final?

This article was written by Adam Button at investinglive.com.

Recall last week, Baker Hughes oil rig count fell -12. Today they rose by half of that with a gain of 6 to 413. The natural gas rates fell -1 to 129. The total rigs for the week rose 5 to 549.

Crude oil is trading near highs for the day up $0.60 41% at $60.28. The low price reached $59.42. The high prices and $60.50. For the week, the price is up 3.11%.

This article was written by Greg Michalowski at investinglive.com.

Treasury Secretary Bessent is out with a good review of the China trade detente. He said the had a constructive call with He Lifeng today about the implementation of the agreement between Xi and Trump. He said it is “going well”.

This article was written by Adam Button at investinglive.com.

Earlier reports said Trump wouldn’t be talking trade with his North American counterparts but now that doesn’t seem to be the case:

• Have meetings set up after FIFA event, will discuss trade
• Will meet with Canada and Mexico
• Getting along very well

That’s more good news or CAD but Trump is so vague and temperamental, he could blow up the USMCA an hour from now.

This article was written by Adam Button at investinglive.com.

Gold is one of several assets that have seen heavy selling in the past half-hour. Gold has quickly turned a $50 gain into a small loss in a near-vertical drop.

Elsewhere, strong gains in US equities have faded as well with a 0.5% rally in the S&P 500 fading to 2%.

Bitcoin is also being hit with selling as it falls 3.3% on the day and cracks $90K to the downside.

This looks like a headline driven move but the only headlines are the ones about Russia and I don’t see that as a reason for these moves.

This article was written by Adam Button at investinglive.com.

Oil prices will like this:

• The EU and G7 in talks on imposing a full ban on accessing maritime services by Russia to disrupt oil exports
• Would scrap oil price cap system

The oil price cap system has been a failure and this would probably be a failure too but there’s a chance it could actually cut off some Russian exports.

Oil was already up 68-cents to $60.37 ahead of this but has faded from earlier gains. There are also high-level US-Russia talks ongoing that could end the war so this sounds like a carrot-and-stick approach.

This article was written by Adam Button at investinglive.com.

There are two things that the market considers with economic data:

1. What the Fed will do
2. What the Fed should do

Now those two things are usually aligned but not always. The heavy politicization of the Fed has the market worried about unwise rate cuts now and into next year.

Today’s UMich consumer sentiment and PCE data shows the Fed might have more latitude than believed. Consumer sentiment is poor but the 1-year inflation expectations survey in the report fell to 4.1% from 4.7% while the five-year fell to 3.2% from 3.6%. That’s a big shift and it’s probably related to gasoline prices but it’s still a sign that consumers aren’t spending like the prices will jump again next year.

As for actual inflation, we’re still digging out from the US government shutdown so the PCE report today was from September but it showed core inflation at 2.8% compared to 2.9% previously (and 2.9% expected). That’s still not on target but it’s a step in the right direction.

A rate cut next week is still only 85% priced in (it should be 100%) but the market should feel more comfortable about 2-3 more cuts in 2026 as the right thing to do even if a Trump lackey is named Fed chair. Now if we get 4-5 cuts that would be a different story but we will cross that bridge when we get to it.

For now we’re getting some nice gains in stocks as we’re not getting indications of a policy error. The S&P 500 is up 0.5%.

This article was written by Adam Button at investinglive.com.

• Prior was 50.3
• Current conditions vs 51.3 expected (52.3 prior)
• Expectations vs 51.2 expected (49.0 prior)
• One-year inflation vs 4.7% prior
• Five-year inflation vs 3.6% prior

This article was written by Adam Button at investinglive.com.

• Personal income 0.4% versus 0.3%
• personal consumption 0.3% versus 0.3% as expected
• PCE for September 0.3% versus 0.3% expected. YoY 2.8% versus 2.8% expected
• Core PCE for September 0.2% versus 0.2% expected. YoY 2.8% versus 2.9% expected
• PCE Ex food energy, and housing 0.2% MoM versus 0.2% last month
• PCE Ex energy and housing 0.2% versus 0.3% last month

For the month there was $65.1 billion increase in current dollar PCE reflecting an increase of $63.0 billion on services and $2.1 billion on goods.

Looking at the PCE, the core PCE is at the same level that it was a year ago at 2.8%. The high of the core reached 3.0%. The headline moved up from 2.3% to the current 2.8%. The 2.8% is the highest going back a year.

This article was written by Greg Michalowski at investinglive.com.