Headlines:
- An early test for gold and silver ahead of the main event tomorrow
- US non-farm payrolls distortion to carry over to December report tomorrow?
- USDJPY remains confined in a range: traders eye US NFP tomorrow for key breakouts
- Trump says that US oversight of Venezuela could stay on for years
- Nvidia to require full upfront payment from Chinese clients for H200 chips - report
- US job cuts fall to 17-month low to round off the final month of 2025
- Switzerland December CPI +0.1% vs +0.1% y/y expected
- Eurozone November PPI +0.5% vs +0.2% m/m expected
- Germany November industrial orders +5.6% vs -1.0% m/m expected
- UK December Halifax house prices -0.6% vs +0.2% m/m expected
- Chinese yuan bets looking more favoured as we get into the new year
Markets:
- USD steady, AUD and NZD lag on the day
- European equities lower; S&P 500 futures down 0.2%
- US 10-year yields up 2.3 bps to 4.161%
- Gold down 0.7% to $4,422.59
- WTI crude oil up 1.4% to $56.81
- Bitcoin down 1.5% to $89,700
As the market focus turns towards the US labour market report tomorrow, traders are taking some caution and a bit of a breather from the early moves to start the year. Equities were more tepid after the drop in Wall Street yesterday while precious metals continue to pull back as bets are taken off the table before the main event on Friday.
In FX, the dollar is keeping steadier and mostly little changed across the board. EUR/USD lacked appetite in a 13-pip trading range and is keeping flat at 1.1673 on the day. USD/JPY also barely budged as it is keeping flattish at 156.67 at the moment. The only notable movers were the antipodes with AUD/USD down 0.4% to 0.6695 and NZD/USD down 0.4% to 0.5745 amid the more sluggish risk mood.
European indices are keeping a little lower with the DAX also now turning negative after a more hopeful start. The German benchmark index pushed for record highs again but the momentum eventually fizzled with US futures also keeping slightly lower at the balance. S&P 500 futures are down 0.2% with Nasdaq futures down 0.3% on the day.
Trump touting that the US could stay in Venezuela for years and Nvidia continuing to tussle with Beijing are two notable headlines we got during the session. That apart from US layoffs easing in December but the 2025 picture marks the worst year in terms of job cuts since the Covid pandemic.
Meanwhile, precious metals continue to be in the spotlight with gold and silver running lower and dropping to test key near-term levels as highlighted in the linked post. It's an early test before we get to the US labour market report tomorrow with a potential pullback on the cards.
Gold dipped to a low of $4,408 in the past hour before a light bounce to $4,422 with silver just hovering off its lows and down nearly 4% to $75.07 currently. Danger, danger. When something becomes too heavy of a consensus, just be wary that pullbacks can be sharp and volatile.
