Macros, datos y acción de precios

Macroeconomic Agenda and Federal Reserve Insights

Overview of the Weekly Agenda

• The discussion begins with an introduction to the macroeconomic agenda for the week of December 1st to December 5th, highlighting significant upcoming events.

Anticipation of Federal Reserve Meeting

• There is a focus on the upcoming Federal Reserve meeting scheduled for December 10th, with speculation surrounding Donald Trump's choice for Powell's replacement as Fed Chair. Trump has hinted at revealing this candidate soon but remains vague about details.

Candidate Profiles and Market Impact

• The profile of the new candidate is crucial; a Dovish candidate may keep the dollar weak, while a Hawkish one could stabilize market expectations by making decisive interest rate decisions. This distinction affects investor confidence and economic projections significantly.

Economic Indicators: PMI Report

• The latest PMI report indicates a decline in U.S. manufacturing production, falling to 48.2 from 48.7, marking nine consecutive months of contraction which raises concerns about economic stability and growth potential. This negative data led to increased market volatility upon its release.

Labor Market Concerns

• The labor market shows signs of weakness with reports of mass layoffs from major companies like Amazon and Apple, contributing to uncertainty in economic conditions and affecting overall production levels negatively. Investors are cautious due to these developments as they impact future growth prospects.

European Economic Outlook

• On Tuesday, insights from Guindos suggest that the European economy remains stable without plans for interest rate cuts, which supports a favorable euro-dollar exchange rate amidst ongoing global uncertainties regarding inflation and employment trends.

Economic Insights and Market Reactions

Euro Exchange Rate Management

• Guindos stated, "I tolerate the euro price up to 21," indicating a threshold for the euro-dollar exchange rate that he finds acceptable.

• Guindos reassures that the European Central Bank (ECB) will intervene if the euro strengthens excessively against the dollar, maintaining market stability.

• He emphasizes a target to keep the euro below 1.21, which is crucial for market confidence and economic health.

Federal Reserve's Approach

• The current Fed Chair Powell adopts a cautious approach, monitoring employment, inflation, consumption, and production closely before making decisions.

• This contrasts sharply with Trump's more aggressive economic strategies that led to historic highs in American indices throughout the year.

Employment Data Analysis

• Weekly unemployment claims show discrepancies but indicate an overall improvement as claims have decreased compared to previous weeks.

• Industrial production remains unchanged; however, service sector production is above 50, suggesting better performance compared to manufacturing.

Upcoming Economic Indicators

• The ADP employment report is expected not to cause significant volatility; it serves as a precursor but lacks direct correlation with NFP outcomes.

• Caution is advised against assuming that positive ADP results guarantee favorable NFP figures due to differing influencing variables.

Anticipated Economic Reports

• Upcoming reports include industrial data from France, Italy, Canada, and U.S. manufacturing orders; uncertainty surrounds whether NFP will be included this Friday.

• Consumer sentiment shows slight improvements while durable goods orders reflect a decline compared to previous months—important indicators of economic health.

Federal Reserve Meeting Preparations

• The Federal Reserve meeting scheduled between December 8th and 10th requires traders to prepare thoroughly for potential market impacts based on forthcoming information.

Interest Rate Cuts and Market Reactions

Overview of Fed's Interest Rate Projections

• The Federal Reserve's sentiment regarding interest rate cuts is shifting, with probabilities indicating potential reductions ranging from 25 to 100 basis points. Current forecasts show an increase in the likelihood of a cut from 30% to 87%.

• There is now only a 12% chance that rates will remain between 3.75% and 4%, suggesting that a cut is almost imminent, which is crucial for market monitoring.

FOMC Members' Positions

• Within the Federal Open Market Committee (FOMC), members have clear stances: some favor cutting rates while others oppose it, with few undecided members. This dynamic could influence the final voting outcome on the day of the meeting.

• The decision-making process occurs during a two-day meeting, emphasizing the importance of understanding each member's profile and their inclination towards rate cuts or maintaining current levels.

Market Absorption of Rate Cuts

• The market may already be pricing in expected rate cuts; thus, actual changes might not significantly impact prices if they align with expectations.

• Observing technical indicators will reveal whether there has been significant movement in currency values, particularly if the dollar experiences liquidation ahead of any official announcements.

Anticipating Market Movements

• If rates are cut on December 10th but the dollar has already depreciated beforehand, market reactions could be counterintuitive—indicating that traders should monitor price trends leading up to decisions closely.

• Understanding how markets discount information can help predict movements; if prices have been declining prior to an announcement, it suggests that traders are already positioning themselves based on anticipated outcomes.

Implications for Dollar Index and Economic Indicators

• Close attention should be paid to the dollar index as it provides insights into market expectations regarding Fed actions and potential buying opportunities based on current price levels relative to historical highs.

Political Influences on Federal Reserve Decisions

Trump's Candidate List for Fed Leadership

• Trump’s candidate list for Federal Reserve leadership includes notable figures like Christopher Waller and Michel Bowman. Their backgrounds suggest strong ties to economic policy-making within private sectors.

• Rick Reader from BlackRock stands out among candidates due to his significant influence in financial markets; this raises questions about private sector involvement in public monetary policy decisions.

Expectations from Potential Appointees

• Candidates aligned with Trump are expected to adopt hawkish stances rather than dovish ones, reflecting Trump's preference for aggressive economic strategies rather than cautious approaches that could hinder growth.

Technical Analysis Ahead of Key Decisions

Price Action Insights

• As discussions progress into technical analysis, understanding price action becomes critical for anticipating market behavior throughout the week leading up to key economic announcements.

Market Analysis and Projections

Overview of Current Market Levels

• The discussion begins with an analysis of market levels for the week, focusing on a key threshold of 100 for the dollar index.

• If the dollar maintains above 100, it is expected to strengthen against other currencies, leading to a bearish trend in other assets.

Federal Reserve's Impact on Market Sentiment

• The anticipated reduction by the Federal Reserve was confirmed around November 25, influencing market positions.

• A drop below 99 indicates a bearish outlook; however, staying above this level could signal buying interest.

Dollar Index Projections

• Key thresholds are identified: crossing below 99.20 or 99.10 suggests further declines, while maintaining above these levels may indicate bullish sentiment.

• A strong dollar scenario is projected if it stays above 99.50; otherwise, a bearish trend is likely as it approaches lower levels.

Gold Performance Insights

• The performance of gold has been notable; reaching highs around 4,250 indicates strong buying interest.

• Critical price points are established at 4,200; falling below this could lead to liquidation and shifts towards the dollar.

Strategic Decisions Based on Price Movements

• The importance of monitoring movements around the critical level of 4,200 is emphasized for making strategic buy/sell decisions.

• Caution is advised when trading near this level due to potential false signals that could trap buyers.

Euro-Dollar Dynamics

Initial Selling Strategy for Euro

• The strategy initially favored selling euros when prices were below 16 but shifted as December began.

Recent Price Movements and Predictions

• As euro prices rose close to 16.50 after starting under 16, there was hesitation about continuing with selling strategies.

Future Outlook Based on Price Levels

• A clear division in strategy emerges: selling below 16 and buying above it. Current trends suggest high probabilities for further declines if prices remain under this threshold.

Market Analysis and Key Indicators

Overview of Currency Movements

• The speaker discusses the different scenarios for currency pairs, emphasizing that the key level for GBP/USD is 132. Below this level indicates a sell position, while above suggests a buy.

• The dollar index remains above 99; if it continues to rise, selling opportunities may arise. The focus remains on the critical level of 132 for GBP/USD.

S&P 500 Insights

• The S&P 500 has reached highs around 6900, with current trading above 6800. There may be profit-taking leading to potential price liquidation.

• Above the 6800 mark, there is significant buying interest. If prices stay above this threshold, they could rise back towards 6900 or even reach 7000.

• A downward movement below 6800 could lead to a drop towards 6700. Market behavior will depend on whether traders are ready to take annual profits.

Trading Strategies and Market Timing

• Emphasis is placed on monitoring market openings in the U.S., as these moments present crucial trading opportunities and define daily price movements.

Federal Reserve Considerations

• Discussion includes upcoming economic indicators such as interest rates and NFP data from the U.S., highlighting uncertainty surrounding Jerome Powell's replacement and its implications for monetary policy.

• Observations about gold prices suggest a potential bearish trend if it crosses below certain levels (42,200).

Political Influence on Monetary Policy

• The speaker advises following Trump's candidate closely to understand their stance on monetary policy, which could impact market sentiment regarding interest rate cuts by the Fed.

• Potential discrepancies between expected and actual rate cuts could lead to unexpected market reactions; e.g., if only a modest cut occurs when larger reductions were anticipated.