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Date: 8th January 2025.


Global Market Update: Inflation Concerns Weigh on Stocks, Bitcoin Drops Below $100K, Gold Holds Steady.



Trading Leveraged Producys is Risky


Asia & European Sessions:


*European stocks saw an extended downturn in Asia and the US, driven by mounting inflation worries that triggered a selloff in Treasury markets.
*Fed funds futures took a hit after the stronger than expected JOLTS report, and the ISM services data that showed a pick up in activity, a solid labor market, and an acceleration in prices paid, all supporting a more cautious rate cut stance. Indeed, the implied January contract now shows just -1.7 bps in cuts this month. Earlier bets on a reduction by March have been abandoned, with rate cuts now anticipated in the latter half of the year.
*German manufacturing orders plunged -5.4% m/m in November, after already falling -1.5% m/m in the previous month. The correction was much sharper than anticipated and left the annual rate back in negative territory. There is some life in the manufacturing sector yet, even though the volatile headline numbers and negative survey readings flag ongoing weakness across the sector.
*Asian stocks saw significant losses as the MSCI index of regional equities recorded its largest single-day decline in over two weeks, erasing gains made on Tuesday. China’s primary stock index briefly dipped to its lowest point since September, reflecting investor anxiety over a potential increase in US tariffs.
*Investor sentiment across Asia remains dampened by ongoing economic uncertainty. In China, concerns about a deflationary spiral are growing, even as yield spreads in credit markets reach their lowest levels since the global financial crisis. This has challenged investor appetite amid a wave of debt issuances worldwide.
*The stronger than expected ISM services and JOLTS data weighed on Treasuries as they further eroded Fed rate cut risks, and the subsequent climb in yields and more hawkish Fed outlook hit stocks.
*The major indexes finished measurably weaker on the day with the NASDAQ dropping -1.89%, while the S&P 500 was off -1.11% and the Dow slipped -0.42%.
*Nvidia opened with a better than 2% gain to an intraday record peak of $153 after bullish news from the CES trade show, but the stock reversed in the afternoon and plunged -6% to $140.14 at the close





Financial Markets Performance:


*The US Dollar rallied to 108.65 with next immediate resistance at 108.85
*The EURUSD dipped further to 1.0325, while the GBPUSD is lower to 1.2445.
*The USDJPY is at 158.23 as the Yen remains under pressure.
*Gold is steady at $2650. Haven flows and central bank purchases helped to push gold to record highs in 2024 and central bank buying is helping to keep the price at high levels. China's central bank resumed gold purchases in November, and data released today, show that purchases continued in December.
*Oil rose for a 2nd consecutive day to $75 after industry reports indicated another drawdown in US inventories.
*Bitcoin fell more than 5%, slipping to $96,200 after the $100,000 milestone. The drop came in response to positive US economic data, which pointed to a resilient economy and reduced the likelihood of further rate cuts by the Fed.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.


Please note that times displayed based on local time zone and are from time of writing this report.




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HFMarkets

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