Daily Market Update

Overview

Much of the sentiment at the moment is being driven by data from last week that seemed to scare markets straight about the likelihood of no interest rate cuts for longer than they desire. The Federal Reserve seems to really be on a “wait-and-see” approach, looking for signs that would set an alarm and set them on course for a more dovish stance.

Today will not help much in searching for those clues with no major data set for release until Thursday’s headline risk event with Consumer Price Index figures for December. Earlier, the National Federation of Independent Business’s Small Business Optimism survey did come in higher than expected for last month, further evidence that economic things keep looking steady for suppliers.
Oil prices stopped the bleeding after dropping to their weakest point in a month after the disruption from Saudi Arabia. Ongoing conflicts will likely keep oil prices from falling too much more than they have. It could affect petrocurrencies going forward.

What to Watch Today…

EUR ⇓

The Euro’s moves have been limited as the year is still in its early stage of getting everyone back and making calls on what is to come for the remainder of 2024. Thus far, some light out of Germany from export data shows more productivity. Furthermore, the European Central Bank’s Economic Sentiment Index showed signs of renewed faith in the future. On Friday, we will hear from ECB Chief Economist Philip Lane, whose statements could move the currency before it enters a week full of economic indicators to chew.

MXN ⇓

The Mexican Peso is down a bit but could turn the tables soon after gauges showed inflation has resumed. Consumer Price Index from last month revealed an uptick of 0.71% thus bringing the annual average up to 4.66%. Banxico, the central bank, explained last month that cuts are under consideration, but under the right conditions, and this may just delay them further from taking any action, much in line with the Fed.