Geopolitics Remains in Focus as Holiday Mood Kicks In

Daily Update- 24th December 2019

Yesterday’s Focus

• USD: Durable Goods Orders (Nov) 

• USD: Chicago Fed National Activity Index (Nov) 

Yesterday’s Explained

Orders for durable goods decline 2% in November. New orders for key U.S.-made capital goods barely rose in November and shipments fell, suggesting business investment will probably remain a drag on economic growth in the fourth quarter. Last month, overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, tumbled 2.0% after gaining 0.2% in the prior month.

Durable goods orders were held down by a 72.7% plunge in demand for defense aircraft orders and parts last month. Economists expect a rebound after the U.S. Congress passed a huge defense spending bill last week. Also turning positive was the Chicago Fed's National Activity Index and that was up a bit more than expected.

 

Today’s Market

• BOJ: Monetary Policy Meeting Minutes
• Australia, Eurozone, Switzerland, UK – Christmas Eve Holiday, All Day
• U.S. – Markets close early

Today’s Focus

The Bank of Japan's next move will be to dial back its massive stimulus, which is already priced into the FX market. There's a chance growth in overseas and Japanese economies could pick up next year, so any such withdrawal of stimulus will begin from 2021 at the earliest. Monetary policy in Japan is likely to be in a holding pattern for the time being, which the minutes will likely continue to be pointing towards.