*New Zealand M3 Money Supply (Nov) 424.4B forecast ,419.0B previous
*07:00 German Import Price Index MoM (Nov): 0.5% forecast, 0.6% previous
EUR/USD: The euro edged higher on Monday as the dollar softened, following Friday's U.S. inflation data, which showed only a modest rise last month, easing concerns about the pace of U.S. rate cuts next year. The data, which included the Fed's preferred inflation gauge, revealed moderate monthly price increases, with underlying inflation showing its smallest gain in six months. However, the annual increase in core inflation, which excludes food and energy, remained stubbornly above the U.S. central bank's 2% target. Traders are now pricing in 44 basis points of rate cuts next year, just shy of the two 25 basis point cuts the Fed projected last week. In September, the Fed had forecast four cuts, but market expectations have since shifted, pushing the first rate cut of 2025 to June. Immediate resistance can be seen at 1.0399(38.2%fib), an upside break can trigger rise towards 1.0438(50%fib).On the downside, immediate support is seen at 1.0346(23.6%fib), a break below could take the pair towards 1.0300(Psychological level)
GBP/USD: The pound rose slightly against the dollar on Monday as the greenback pulled back, following Friday's data which showed a modest rise in U.S. inflation last month, easing concerns about the pace of rate cuts in the U.S. next year. Looking ahead, investors are turning their attention to the upcoming UK GDP data, which will provide key insights into the health of the UK economy. The Office for National Statistics will publish UK GDP data, with the economy projected to show a slight 0.1% growth in the third quarter, in line with initial estimates, after expanding by 0.5% in the second quarter. Immediate resistance can be seen at 1.2690(38.2%fib), an upside break can trigger rise towards 1.2731 (Dec 18th high).On the downside, immediate support is seen at 1.2560(23.6%fib), a break below could take the pair towards 1.2524(Lower BB)
AUD/USD: The Australian dollar edged higher against the U.S. dollar on Monday but gains were limited as investors awaited the Reserve Bank of Australia's December policy meeting minutes. The RBA is set to release these minutes on Tuesday, after keeping its policy unchanged earlier this month while unexpectedly hinting at the possibility of a rate cut next year. Market swaps currently imply a 70% chance of a rate cut in February, with a first cut fully priced in for April. As of 06:10 GMT, the Australian dollar was up 0.24% at 0.6262 against the greenback. Immediate resistance can be seen at 0.6279(38.2%fib), an upside break can trigger rise towards 0.6339(50%fib).On the downside, immediate support is seen at 0.6190(23.6%fib), a break below could take the pair towards 0.6160(Lower BB)
USD/JPY: The dollar edged past 156.50 level against yen on Monday as yen weakened on growing concerns that Japanese authorities may intervene to stabilize the currency. The currency has faced pressure from a robust dollar and a significant interest rate differential that remains in place despite the Fed's rate cuts. It has dropped over 10% against the dollar this year and is on track for its fourth consecutive year of declines. The yen's drop has led to warnings from officials in Tokyo, with analysts expecting more comments and efforts to influence the currency until the end of the year. The yen weakened to 0.17 percent 156.65 per dollar, close to the five-month low it reached on Friday. Immediate resistance can be seen at 157.37 (Higher BB) an upside break can trigger rise towards 158.81 (23.6%fib). On the downside, immediate support is seen at 155.60(38.2%fib) a break below could take the pair towards 155.00 (Psychological level).
Equities Recap
Asian shares rallied on Monday after a benign reading on U.S. inflation restored some hope for further policy easing next year, while there was relief that Washington had averted a government shutdown.
Hang Seng was up 0.73% , and South Korea's KOSPI was up by 1.57%. Nikkei was up 1.16
Commodities Recap
Gold gained slightly on Monday in light trading, as investors closed their short positions following the U.S. Federal Reserve's cautious outlook on potential rate cuts for 2025, which had driven prices to one-month lows last week..
Spot gold added 0.2% to $2,626.47 per ounce, as of 0510 GMT, trading in a narrow $11 range. U.S. gold futures eased 0.1% to $2,641.50.
Oil prices rose on Monday as lower-than-expected U.S. inflation data revived hopes for further policy easing, although the outlook for a supply surplus next year weighed on the market.
Brent crude futures rose 36 cents, or 0.5%, to $73.30 a barrel by 0421 GMT. U.S. West Texas Intermediate crude futures climbed 39 cents, or 0.6%, to $69.85 per barrel.