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The dollar index (DXY00) increased by 0.25% following the November Empire manufacturing survey, which rose unexpectedly by 8.0 points to a 1-year high of 18.7. This growth surpassed forecast expectations of a decline to 5.8. As a result, the likelihood of a Federal Reserve rate cut at the upcoming December 9-10 meeting fell to 41% from 70% earlier this month.
In Europe, the European Commission revised its 2025 Eurozone GDP forecast upwards to 1.3% from 0.9%, while the ECB Vice President, Luis de Guindos, noted elevated financial stability risks, impacting the euro, which is down 0.30%. In Japan, the economy contracted by 1.8% in Q3, the sharpest drop in 1.5 years, supporting the case for a stimulus package amid concerns over rising government debt. The 10-year Japanese government bond yield rose to a 17-year high of 1.737%.
In commodities, December COMEX gold fell by 0.74% and silver by 0.60%, driven by a stronger dollar and decreasing expectations for rate cuts. Despite this, central bank demand for gold remained robust, with China’s PBOC reserves rising to 74.09 million troy ounces, marking the twelfth consecutive month of increases.
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