Magna Financial Market Report –December 9th 2024
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• Rate cuts anticipated from the BoC, ECB, and SNB
• US inflation data to be released on Wednesday
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RECAP
The US employment data released on Friday has raised the probability of a 25-basis-point rate cut by the Federal Reserve later this month. The report revealed an addition of 227,000 jobs, an increase in the unemployment rate to 4.1%, and monthly wage growth of 0.4%. While these figures initially led to a dip in the US dollar, the currency rebounded following remarks from Fed member Bowman. She pointed out that a swift reduction in rates could reignite inflation, advocating instead for a more cautious and gradual approach.
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OUR SUMMARY
This week promises significant central bank activity, with key interest rate decisions from Australia, Canada, Switzerland, and Europe scheduled. The Reserve Bank of Australia (RBA) is expected to hold rates steady, while the Bank of Canada (BoC) is anticipated to implement a 50-basis-point cut. The European Central Bank (ECB) is forecasted to reduce rates by 25 basis points, and the Swiss National Bank (SNB) has a 60% chance of a 50-basis-point cut.
These rate decisions are particularly important in the context of potential trade tariffs under President-elect Donald Trump, which could influence economic outlooks. Additionally, the US CPI report will be closely watched. The market currently prices in a 25-basis-point rate cut for next week’s Federal Reserve
meeting, but any stronger-than-expected inflation data could lead to reconsiderations about the need for such a cut.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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