Comentario económico 13 de diciembre 2023

COP – Urban Unemployment for October came in under consensus at 9.0% vs. 9.4% expected this morning. After the strength in COP over the last few days, mostly driven by HF inflows, we saw USDCOP break 4000 and stay above that level throughout the session today. December is a month of strong COP outflows for local corporates, and forward points continue making USDCOP buying attractive, so for now we are watching 4000 as a support level and 4070 resistance. Flow-wise today we saw RM COP outflows as well as some corporate USDCOP buying.

 

NY Open – Waiting on Powell

It was a quiet trading session, typical of a pre-FOMC markets. FX interbank volumes during the London session were 20% lower than the last 30d average, with Treasuries activity muted too. Overnight, NZD underperformed after data showed further deceleration in prices, deepening 2024 rate cut pricing. The conclusion China’s Central Economic Work Conference saw limited stimulus push, which dragged Chinese equities lower, though CNH reaction was muted. Growth woes continues in GBP, with misses in monthly GDP and IP.

For the final FOMC decision of the year (14:00 EST), our economists expect downward revisions to core inflation and median “dots”. Our dot plot base case is 25bp, 50bp and 50bp downward revisions to 2023, 2024 and 2025. This will make it difficult for Powell to deliver hawkish guidance at the press conference (14:30). Elsewhere, Brazil awaits a 50bps cut in the Selic rate at 50bps. Our economists’ first take of Argentina new policy measures is positive.

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