Hello traders, welcome to the last week—and the final two trading days—of 2024. Today's calendar is relatively busy for a Monday. Key data includes Spanish CPI, expected at 2.6%, which will influence the euro but is not Tier 1 data. From the U.S., we anticipate Chicago PMI at 42.7% and pending home sales at 0.9%, providing some direction for the markets.
The week has started with a bearish tone on indices, influenced by last week's negative close. There’s no sign of the anticipated Santa rally, with red dominating the major indices. This negative sentiment persists as traders reflect on the year’s broader economic conditions and prepare for 2025.
On the forex market, Japanese yen weakness is evident, while antipodean currencies such as the Australian and New Zealand dollars are gaining strength. This trend highlights risk-on sentiment in parts of the market, despite the broader bearish tone in equities.
Commodities are showing resilience as oil continues to climb higher, supported by bullish momentum in recent sessions. Precious metals, including gold, are also pushing upward, hinting at renewed demand.
One of the most notable movements occurred on Friday in cocoa, which saw an extraordinary 10% drop in a single day. This dramatic decline came from rejection at long-term tops. Despite this, cocoa remains up 130% year-to-date, underscoring the massive rally it has enjoyed this year. Friday’s pullback may signal profit-taking at elevated levels.