Price volatility for several products remains high as European trading begins on Friday (December 20, 2024), ahead of the upcoming release of inflation data based on the Personal Consumption Expenditure (PCE) index for the United States at 20:30 WIB.
This data release may induce significant volatility across all products, given that it serves as a benchmark for the Federal Reserve in determining monetary policy. Here are the figures from Trading Central:
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- PCE Inflation (Nov/year-on-year): forecast 2.5% vs previous 2.3%
- Core PCE Inflation (Nov/year-on-year): forecast 2.9% vs previous 2.8%
GOLD
Gold prices (XAUUSD) are oscillating between US$ 2,589 and US$ 2,607 per troy ounce as European trading starts, showing relatively tight movements compared to the past two days.
However, the release of the PCE inflation data could result in significant fluctuations. If the actual figures exceed the forecast, it is likely that the Fed will not aggressively cut interest rates next year,
potentially placing substantial pressure on gold prices in tonight’s trading.
OIL
Oil prices (CLS10) have dipped at the start of European trading, reaching a daily low of US$ 68.55 per barrel. Negative sentiment arises from central banks in several countries exercising caution regarding interest rate cuts next year.
This situation lowers global economic outlooks, which adversely affects oil demand prospects. Negative sentiment is expected to influence oil price movements tonight, with even greater pressure likely if the US PCE inflation data is released higher than the forecast.
EURUSD
EURUSD has been very volatile, trading within the range of 1.03431 – 1.03085 early in the European session.
The pair bounced back following Germany’s PPI (Producer Price Index) data release for November, reported at 0.1% year-on-year (YoY), which exceeded the forecast of -0.3% YoY, and the previous month’s figure of -1.1% YoY. This marks the first positive growth in Germany’s PPI since July 2023.
Nevertheless, the rise in EURUSD remains constrained due to the imminent release of the PCE inflation data. A higher-than-expected forecast may pressure EURUSD again.
GBPUSD
GBPUSD has rebounded to 1.25201 at the start of European trading after dropping to 1.24746 earlier this morning, marking its lowest level in over seven months and triggering technical corrections.
Given this trend, GBPUSD may face renewed pressure if the US PCE inflation data exceeds the forecast.
USDJPY
USDJPY fell to 156.621 after peaking at 157.925, the highest in five months, prompting profit-taking activities.
The sentiment for USDJPY is currently very positive, as the Fed is not expected to cut interest rates aggressively next year, while the Bank of Japan (BoJ) remains uncertain about when it will raise rates.
This indicates that if the US PCE inflation data is released higher than the forecast, USDJPY may receive further positive sentiment.
Насдак
Nasdaq plummeted to 21,084 at the opening of the European session, marking a decline of 323 index points compared to Thursday’s close.
Profit-taking actions have triggered this decline, and there is a potential for such actions to continue throughout tonight’s trading if US PCE inflation is reported higher than the forecast.
