SIGNALING POSSIBLE PRESSURES
According to the Bureau of Labor Statistics, wholesale prices rose by 0.4% in November, exceeding expectations and indicating a slowdown in inflation progress, The producer price index, which tracks changes in prices of goods sold by manufacturers to measure inflation from their perspective, indicated a notable increase as it saw a 0.4% increase for the month, higher than the expected 0.2%. On an annual basis, PPI rose by 3%, the largest jump since February 2023. However, core PPI, excluding food and energy, only increased by 0.2%. Services costs rose by 0.2%, mainly driven by a rise in trade, while final-demand goods prices surged by 0.7%, attributed to a significant increase in food prices. It is worth noting that the elevated PPI figures signal the possibility of increased consumer inflation in the near future, and such inflationary pressures could prompt central banks to raise interest rates to curb rising prices.
ABOVE EXPECTATIONS
In the week ending December 7, there were 242,000 initial jobless claims reported by the U.S. Department of Labor, which was higher than the previous week and above market expectations. This data indicates that more individuals filed for unemployment benefits during that week. In addition, the insured unemployment rate, which measures the percentage of people receiving benefits, was 1.2%, while the 4-week moving average was 224,250. Furthermore, the advance number for seasonally adjusted insured unemployment for the week ending November 30 was 1,886,000, up by 15,000 from the previous week.
LOSING LUSTER
Gold prices have declined after reaching a more than one-month high earlier this morning, and this was driven by the expectations of a Federal Reserve interest rate cut next week. Despite the recent economic data releases which have signalled possible inflation pressures, many still expect rate cuts to happen at the upcoming Fed’s meeting, and as a result of this, spot gold dropped by 0.5% to $2,704.41 per ounce, following its highest level since November 6. In addition, U.S. gold futures also fell by 0.5% to $2,744.60, and this dip is attributed to profit-taking after the recent rally in gold prices, which were influenced by factors such as geopolitical tensions, China’s renewed gold purchases, and in-line inflation numbers reported yesterday.
LIFTOFF FRENZY
It has been announced that the XRP has seen a remarkable 260% increase in value over the past month, surpassing well-known digital currencies like Bitcoin and Ethereum, alongside the launch of Ripple’s new stablecoin, RLUSD. This regulated digital dollar alternative is backed by USD deposits and U.S. Treasury bonds in a bid to compete with Tether and USD Coin. Ripple has partnered with major exchanges to support RLUSD, expecting it to reach a significant $2 trillion market cap by 2028. Moreover, XRP reaching $2.14, its highest value in almost a year, coincided with positive investor sentiment post the election of Donald Trump as the new U.S. president, which is anticipated to ease regulatory pressures on the industry. Ripple’s ongoing legal battle with the Securities and Exchange Commission (SEC) took a favorable turn with potential changes to the leadership, signaling further positive outcomes for the company. Despite a slowdown in momentum due to profit-taking, heightened whale activity around XRP suggests strategic maneuvers within the market.
INTERNATIONAL NEWS
European markets have remained stable, fluctuating between small losses and gains following the European Central Bank’s decision to lower interest rates by 25 basis points. This marks the ECB’s fourth interest rate cut this year, aligning with expectations of a quarter-percentage-point adjustment and bringing the key rate to 3%, reflecting a total reduction of 1 percentage point since the start of the current easing cycle in June 2024. The news impacted the euro, causing an initial decline against the dollar followed by a recovery, ultimately rising by 0.18% to $1.051. In addition, the pan-European Stoxx 600 index saw a minimal decrease, while mining stocks experienced a decline of 1.3%, but the automotive sector witnessed an increase of 0.53%. Additionally, the Swiss National Bank also surprised markets by cutting rates by 50 basis points, a larger move than anticipated, in response to concerns over low inflation and a strong Swiss franc.
