The overall market mood remains more pensive with investors keeping a close watch on the US jobs report later and potential court ruling on Trump’s tariffs. However, the mood in Europe this week has largely been more positive – not least being shielded from the tech slump yesterday as well.European stocks are pushing slight gains at the balance to start the day now, with France’s benchmark index leading the charge. The CAC 40 is up 0.6% and is closing in on fresh record highs. All else being equal, this would mark the best weekly finish for the index on record.This follows up on Germany’s own benchmark index with the DAX already cruising to fresh record highs with over 2% gains on the week. It may be trading more flat to start the session but it doesn’t take away what has been a good week for European investors. Besides that, Spain’s IBEX is also up over 1% on the week and settling at its own record highs.So overall, it has been a stellar week for the most part for European indices to say the least.Now, it’s all about sticking that landing as we will have to navigate through some big events before the week is over and done with.US futures are already feeling more pensive, keeping flattish on the day. That as we saw a rotation out of tech with the Nasdaq having fallen by 0.4% yesterday with the Dow gaining by 0.5% instead. AI valuation concerns continue to keep things in check but today, it’s all about how investors will take to the US jobs report and the potential Supreme Court ruling on Trump’s tariffs.So, buckle up. It’s going to be a fun ride as we get to the weekend. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight The upcoming US jobs report is a major catalyst for market sentiment, and here’s why that matters: Investors are on edge as they anticipate how the jobs data will influence the Federal Reserve’s next moves. A strong jobs report could reinforce expectations for continued rate hikes, which historically pressures both equities and crypto markets. Conversely, a weak report might spark a relief rally, particularly in risk assets. Meanwhile, Europe seems insulated from the recent tech slump, which could lead to a divergence in performance between US and European markets. Traders should keep an eye on key levels—if the S&P 500 breaks below its recent support, it could trigger further selling. On the flip side, the potential court ruling on Trump’s tariffs could create volatility, especially in sectors sensitive to trade policies. This is a reminder that geopolitical factors can have immediate impacts on market dynamics. Watch for how these events unfold in the coming days, as they could set the tone for trading strategies moving into the end of the month. 📮 Takeaway Keep an eye on the US jobs report this week; a strong print could pressure risk assets while a weak one might trigger a rally—watch S&P 500 support levels closely.

From the man himself:”Venezuela is releasing large numbers of political prisoners as a sign of “Seeking Peace.” This is a very important and smart gesture. The U.S.A. and Venezuela are working well together, especially as it pertains to rebuilding, in a much bigger, better, and more modern form, their oil and gas infrastructure. Because of this cooperation, I have cancelled the previously expected second Wave of Attacks, which looks like it will not be needed, however, all ships will stay in place for safety and security purposes. At least 100 Billion Dollars will be invested by BIG OIL, all of whom I will be meeting with today at The White House. Thank you for your attention to this matter! President DJT”There’s just nothing quite like a world leader casually talking about attacks and invasion-like actions against another country like it is nothing. Good stuff. Tells you a lot about the geopolitical landscape we’re dealing with at the moment.While expected, Trump continues to just reaffirm that the US will be occupying Venezuela for an extended period of time. Mind you, he said yesterday that it could even be for years. So, don’t hold your breath.Now, the focus and attention turns towards Iran and Greenland. After all that has happened, you wouldn’t want to risk ruling out Trump from taking action there. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight Venezuela’s release of political prisoners could signal a shift in geopolitical dynamics, impacting oil prices and crypto markets. As the U.S. and Venezuela collaborate on oil infrastructure, traders should monitor how this affects global oil supply and demand. A more stable Venezuela could lead to increased oil production, which might pressure oil prices downward. This, in turn, could influence crypto assets like Ethereum, especially if traders view oil as a hedge against inflation. Keep an eye on ETH’s performance around the $3,000 mark; a breach below could trigger further selling pressure. Conversely, if oil prices stabilize or rise due to geopolitical tensions, we might see a flight to crypto as a safe haven. Watch for any announcements regarding U.S.-Venezuela relations, as they could create volatility in both oil and crypto markets, particularly in the short term. 📮 Takeaway Monitor ETH around $3,000; geopolitical shifts in Venezuela could impact oil prices and crypto sentiment significantly.

The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market’s reaction is the distribution of forecasts.In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.Non-Farm Payrolls19K-155K range of estimates40K-75K range most clustered60K-70K consensusUnemployment Rate4.7% (2%)4.6% (30%)4.5% (58%) – consensus4.4% (8%)4.3% (2%)Average Hourly Earnings Y/Y3.7% (14%) 3.6% (67%) – consensus3.5% (10%)3.4% (10%)Average Hourly Earnings M/M0.4% (7%) 0.3% (70%) – consensus0.2% (18%)0.1% (5%)Average Weekly Hours34.3 (74%) – consensus34.2 (26%)The December jobs data so far has been good as Adam noted in his post here. As noted by Fed Chair Powell and other Fed members, the unemployment rate should be the most important indicator at the moment, although a notable deviation in the headline payrolls won’t be ignored.Looking at the distribution of forecasts, we can notice that the expectations are skewed to the upside for the unemployment rate. So, a 4.4% rate or lower will be taken as a hawkish surprise, while we need a 4.7% rate or higher for a dovish surprise.Having said that, I have a feeling that CPI will be more important because inflation worry is what is constraining the Fed from acting more quickly and with more conviction on rate cuts. Nonetheless, notable deviations in the NFP report will still trigger big market moves and influence the market pricing. This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight Market reactions hinge on how actual data compares to expectations, and here’s why that’s crucial right now: when forecasts cluster tightly, any deviation can trigger significant volatility. Traders need to be aware that if the actual figures come in outside this clustered range, it could lead to sharp price movements across various assets. For instance, if economic data releases show a stronger or weaker performance than anticipated, expect correlated assets like forex pairs or commodities to react accordingly. This is especially relevant in the current environment where economic indicators are being closely monitored. With central banks adjusting policies based on these data points, the ripple effects can be felt across the board. For example, a surprise in employment numbers could impact currency valuations and subsequently influence commodity prices. So, keep an eye on the forecast ranges and be prepared for potential surprises that could shake up your positions. Watch for key economic releases in the coming weeks, as these will be pivotal in shaping market sentiment and could lead to trading opportunities or risks depending on how they align with expectations. 📮 Takeaway Monitor upcoming economic data releases closely; any deviation from clustered forecasts could trigger significant market volatility.

Rate cuts by year-endFed: 54 bps (86% probability of no change at the upcoming meeting)BoE: 43 bps (87% probability of no change at the upcoming meeting)ECB: 1 bps (99% probability of no change at the upcoming meeting)Rate hikes by year-endBoC: 13 bps (88% probability of no change at the upcoming meeting)BoJ: 35 bps (97% probability of no change at the upcoming meeting)RBA: 32 bps (76% probability of no change at the upcoming meeting)RBNZ: 33 bps (98% probability of no change at the upcoming meeting)SNB: 4 bps (100% probability of no change at the upcoming meeting)We started the year with some slightly dovish changes in terms of market pricing. For the ECB, the market was pricing 10 bps of tightening in 2026 in December, but that turned into 1 bps of easing following the soft inflation data. The expectations remain pretty much unchanged for the Fed and the BoE, which stand on the most dovish side of the spectrum in terms of market pricing.For the BoJ, we saw a bit of a dovish repricing following soft Tokyo CPI, weak wage growth data and some geopolitical tensions between China and Japan. The same goes for the BoC as the softer than expected Canadian inflation report in December took the pricing from 25 bps of tightening to 13 bps now.Lastly, we had a slightly dovish repricing for the RBA following the recent softer Australia’s monthly inflation, although the core inflation figures remained firm. This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight The Fed’s strong stance on rate cuts signals a pivotal moment for traders: With an 86% probability of no change in the upcoming meeting, traders need to reassess their positions. The BoE and ECB also show similar trends, with high probabilities of maintaining current rates. This environment suggests that the central banks are prioritizing stability over aggressive monetary policy shifts, which could impact forex pairs heavily tied to these economies. For instance, the USD might strengthen against currencies from the UK and Eurozone as traders anticipate a divergence in monetary policy. But here’s the flip side: if inflation pressures unexpectedly rise, we could see a sudden shift in sentiment, leading to volatility. Traders should keep an eye on economic indicators like CPI and employment data in the coming weeks, as these could influence central bank decisions. Watch for key levels in major currency pairs; for example, a break below 1.10 in EUR/USD could signal further weakness in the Euro. Overall, the current landscape calls for a cautious approach, with a focus on data-driven decisions rather than speculation. 📮 Takeaway Monitor upcoming economic indicators closely; a break below 1.10 in EUR/USD could signal further Euro weakness amid stable rate expectations.

The firm estimates non-farm payrolls to clock in at 75k in December, beating estimates with private payrolls hitting 80k. That being said, they estimate the unemployment rate to jump up to 4.7% after having risen to 4.6% (4.56% unrounded) in November.”Just as with the last few months, we would caution that seemingly stronger job growth may be more a result of seasonal adjustment issues in a low hiring environment rather than a sustained pick-up in demand for workers. Seasonal factors imply a boost from typically low hiring in many months in Q4/Q1.”Building on the case that payrolls would stay supported due to seasonal factors, Citi notes that:”Looking through extreme seasonal adjustment issues around the Thanksgiving holiday, continuing jobless claims have been following a similar pattern as last year, declining more clearly by the end of November. This could suggest upside risk to our forecast, possibly with seasonally adjusted strength in sectors like transportation and retail trade.”They also pointed to the fact that December 2024 saw a “very strong” payrolls print of 323k.As for the unemployment rate, the firm argues that:”There has been substantial residual seasonality in the participation rate this year that would imply it rises again in December, although usual seasonal factor updates incorporated into December data are a risk to this assumption.”Adding that a key driver in their estimate stems from the anticipation that the labour force participation rate rising a bit further again from 62.47% to a rounded 62.6%.Besides that, Citi estimates average hourly earnings to be on the softer side this time around (+0.1% m/m) in saying that:”Calendar effects that imply softer wage growth could also be one temporary factor leading to softer wage growth in December. But forward-looking wage plans of businesses, which tend to lead actual wage growth trends by a few months, suggest this slowing will continue into 2026.” This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight The projected rise in unemployment to 4.7% could shake market confidence, and here’s why: Non-farm payrolls hitting 75k in December, while better than expected, still signals a slowing labor market. This could lead to a reassessment of interest rate policies by the Fed, especially if the trend continues. Traders should keep an eye on how this impacts the dollar and equities, as a weaker labor market often leads to dovish sentiment. If the unemployment rate indeed jumps, we might see volatility in the forex markets, particularly with USD pairs. Look for key technical levels on the dollar index; a break below recent support could trigger further selling pressure. Also, watch how sectors like consumer discretionary react—if they falter, it could indicate broader economic concerns. The real story here is the potential ripple effect on risk assets. If traders start pricing in a more cautious Fed, we could see a shift in capital flows, impacting everything from crypto to commodities. Keep December’s payroll numbers in focus as they could dictate market sentiment heading into the new year. 📮 Takeaway Watch for the dollar index’s reaction to the unemployment rate; a break below key support levels could signal a shift in market sentiment.

The firm estimates non-farm payrolls to show a growth of 75k in December, with private payrolls also matching that figure at 75k. Much like what Citi noted, JP Morgan also points to seasonal factors as underpinning the headline payrolls number:”The summer deceleration and subsequent acceleration bears some resemblance to last year, so there could be a bit of residual seasonality in play that causes job growth to keep accelerating. We thus forecast a near-trend value of 75k for payrolls, as a range of labor indicators don’t point to major changes in labor market conditions compared to earlier months.”That being said, they do point out the risk of weather having an adverse effect but one that is unlikely to appear here. As mentioned before, this is usually one that typically appears more in January and/or February.”Heating degree days showed weather in early November as somewhat warmer than usual, turning to colder than usual in December, which could weigh on jobs, though the effect is probably not large.”As for the unemployment rate, the firm forecasts the reading to be at 4.6% in December i.e. unchanged when looking at the rounded figure from November. That as they estimate the labour force participation rate to hold more or less steady at 62.5%.However, JP Morgan also points to potential data quality concerns as affecting the jobless rate this time around. As highlighted yesterday, the firm warned that:”Despite the government shutdown ending partway through the household survey reference week, a number of federal employees still classified themselves as being on temporary layoff. Reversing that in December could cut the unemployment rate about 4bp.”So, there’s that to consider alongside the other potential distortions that could creep into the December report later in the day. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight Non-farm payroll growth of 75k in December could signal a mixed bag for traders: While this figure aligns with expectations, the seasonal factors highlighted by JP Morgan suggest volatility ahead. If payrolls come in lower than anticipated, we might see a risk-off sentiment in equities and a flight to safety in the dollar. Traders should keep an eye on correlated markets, especially commodities and tech stocks, which often react sharply to labor market data. The broader context of economic recovery is still fragile, and any deviation from these payroll estimates could trigger significant price movements. Watch for key levels in the S&P 500 and the dollar index, as these could provide insight into market sentiment post-release. If we see a strong number, it might push the Fed to consider tightening sooner than expected, impacting interest rates and bond yields. The flip side is that if the numbers disappoint, it could reinforce the dovish stance of the Fed, leading to a rally in risk assets. Keep an eye on the December payroll release and its implications for the first quarter of 2024. 📮 Takeaway Watch the December non-farm payrolls closely; a figure below 75k could trigger a risk-off sentiment, impacting equities and the dollar.

AUD/USD extends its pullback and trades around 0.6690 on Thursday at the time of writing, down 0.40% on the day, after posting a more-than-one-year high on the previous day. 🔗 Source 💡 DMK Insight AUD/USD’s pullback to 0.6690 signals potential volatility ahead. After reaching a one-year high, this retracement could indicate profit-taking among traders, especially with the pair down 0.40% today. The recent high might have attracted sellers looking to capitalize on overbought conditions. Traders should keep an eye on the 0.6700 resistance level; if it holds, further downside could be in play. Conversely, if the pair manages to reclaim that level, it could signal renewed bullish momentum. Look for economic indicators from Australia or the U.S. that could impact this pair, particularly any shifts in interest rate expectations. The broader market context suggests that if the U.S. dollar strengthens due to hawkish Fed signals, AUD/USD could face additional pressure. Here’s the thing: while the pullback might seem concerning, it could also present a buying opportunity for those looking to enter at a lower price point. Monitor the 0.6650 support level closely; a break below could trigger further selling pressure. 📮 Takeaway Watch the 0.6700 resistance and 0.6650 support levels for AUD/USD; they could dictate the next move in this volatile environment.

The Canadian Dollar (CAD) remains on the defensive against the US Dollar (USD) on Thursday, pressured by broad-based Greenback strength. At the time of writing, USD/CAD trades around 1.3875, hovering near its highest level since December 5. 🔗 Source 💡 DMK Insight The CAD’s struggle against the USD signals potential volatility ahead for traders. With USD/CAD trading around 1.3875, it’s crucial to recognize that this level is the highest since early December. This broad-based strength in the USD is likely driven by recent economic data and interest rate expectations, which could continue to pressure the CAD. Traders should keep an eye on key economic indicators from both Canada and the U.S. in the coming days, as they could further influence this pair. If USD/CAD breaks above 1.3900, it could trigger more aggressive buying from institutions, pushing the CAD even lower. On the flip side, if the CAD manages to hold above 1.3800, it might indicate a potential reversal or at least a consolidation phase. Watch for any shifts in sentiment around the Bank of Canada’s monetary policy, as that could provide a catalyst for a bounce back. Overall, the immediate focus should be on the 1.3900 resistance level and the 1.3800 support level for potential trading opportunities. 📮 Takeaway Monitor USD/CAD closely; a break above 1.3900 could signal further CAD weakness, while holding above 1.3800 may indicate a reversal.

2026 is turning out to be full of surprises, mostly due to President Trump. He is once again dominating markets, and this time his rapid expansion of foreign policy is triggering a surge into defense stocks. 🔗 Source 💡 DMK Insight Trump’s foreign policy moves are shaking up defense stocks, and here’s why that matters: As we head into 2026, the volatility in defense stocks could present both opportunities and risks for traders. With Trump’s renewed focus on foreign policy, we might see increased government spending in defense, which historically boosts stocks in that sector. Traders should keep an eye on key defense players and their earnings reports, as positive guidance could lead to a bullish trend. However, this surge could also attract profit-taking, especially if the market perceives the moves as politically motivated rather than economically sound. Look for technical levels in major defense stocks—if they break above recent highs, it could signal a strong upward trend. Conversely, if they fail to maintain momentum, a pullback might be on the horizon. Monitoring sentiment around Trump’s policies will be crucial, as any misstep could lead to rapid shifts in market sentiment, impacting not just defense stocks but also related sectors like aerospace and technology. 📮 Takeaway Watch for key resistance levels in defense stocks; a breakout could signal a strong rally, but be cautious of potential profit-taking.