What are the main events for today?

In the European session, the focus will be on the Swiss CPI and especially on the Eurozone CPI as the market’s pricing for the ECB remains very dovish. In the American session, the attention will switch to the ISM Services PMI and the US Job Openings.

07:30 GMT – Switzerland December CPI

The Swiss CPI Y/Y
is expected at 0.6% vs. 0.7% prior, while the M/M measure is seen at -0.1% vs.
-0.1% prior. As a reminder, the SNB cut its policy rate by 50 bps at the last decision bringing it to 0.50%
and dropped the language signalling further cuts in the coming quarters.

This suggests that
the central bank will likely slow the pace of easing which is something that
the market was already expecting with two 25 bps cuts priced in for this year.
The SNB has projected inflation to average 0.3% in Q1 2025, so this is going to
be the baseline for the next meeting in March.

10:00 GMT – Eurozone December CPI

The Eurozone CPI
Y/Y is expected at 2.4% vs. 2.2% prior, while the Core CPI Y/Y is seen at 2.7%
vs. 2.7% prior. As a reminder, the ECB cut the policy rate by 25 bps at the last decision bringing it to 3.00%.

The central bank
removed the passage saying that “it will keep policy rates sufficiently
restrictive for as long as necessary” implying that upside inflation risks have
faded. The market sees a 91% probability of a rate cut at the upcoming meeting
and a total of 98 bps of easing by year end.

15:00 GMT/10:00 ET – US December ISM Services PMI

The US ISM
Services PMI is expected at 53.0 vs. 52.1 prior. The S&P Global US Services PMI showed once again an acceleration in services
activity rising to a 38-month high. New orders rose at a rate not seen since
March 2022 and inflation remained subdued with prices rising at the slowest
pace since June 2020. Definitely a very good picture for the services sector.

15:00 GMT/10:00 ET – US November Job Openings

The US Job
Openings are expected at 7.700M vs. 7.744M prior. The last report beat expectations with the quits rate rebounding but
the hiring rate falling back to the cycle lows. It’s a labour market where at
the moment it’s hard to find a job but there’s also low risk of losing one.
There’s a decent chance that things will improve this year though and there
have been some positive signs already.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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