News flow was dominated by Geo Political angst, an Earthquake and an aircraft blaze in Japan and continued uncertainty and rising tensions surrounding shipping routes through the Red Sea.
Manufacturing activity ended the year on a soft note as Manufacturing PMI across EZ , Japan, UK and US suggested deterioration. EZ PMIs were marginally better than the previous month but still in contraction strongly suggesting a recession in Q4. USD index strengthened overnight , bouncing off recent lows of 100.62 and traded a high of 102.252. EURUSD rode on the December seasonality but quickly reversed , 1.80% off highs 1.1139. German-US Bond Yields reversed from -1.798% to trade a low of -1.914%.
US yields rose across the curve despite soft manufacturing data and lower crude oil prices. Implied FFR pricing for the Dec 2024 policy shifted 7 bps higher. Brent Crude prices continued to suffer, down 1.25% on the day to settle the day at $ 75.87 bbpd.
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