The dollar continues to plummet, with a further -1% gap against the euro (to 1.1000) and an overall -0.8% decline for the Dollar Index, down to 101.95, the lowest since August 1 or 4.

The greenback is down -1.1% against the pound and a further -0.9% against the yen (at its highest since 27/07): it now needs just 141.5 against 144.5E on Wednesday morning and over 146 on Monday (i.e. 3% higher) and needed 156.8 on November 14, 1 month ago to the day (the $ was 9% higher!).).
The $ is holding up a little better against the Swiss franc (-0.6%) and the Canadian dollar (-0.7%).

The markets thought they detected in the FED chairman's remarks on Wednesday evening the promise of much more than the 3 rate cuts that Jerome Powell cautiously hinted at.
Rate cut expectations are moving at breakneck speed: specialists now estimate a 21% chance of rate cuts starting as early as next month (end January)!

Expectations show a 70% probability of rate cuts starting in March 2024.
There's even an increasing 17% probability of 2 rate cuts by March 2024... and 99% by May 2024.

Futures contracts are already 'predicting' more than 6 rate cuts, and more like 8 on average by the end of 2024 (i.e. -200Pts... but there are already expectations of -250!).

The fall in the greenback's yield is taking on spectacular proportions (hence its -2% fall in 48 hours): -30Pts on '2033' T-Bonds since Wednesday morning (between 4.21% and 3.91%), including -21Pts yesterday and -9Pts this Thursday (-110Pts in 7 weeks).
The US '30 yr' is no longer very far from falling back below 4% (4.0300% low vs. 4.31% yesterday morning and 4.175% last night).

At the close of its monetary policy meeting in Frankfurt, the Governing Council of the European Central Bank (ECB) considers that "the ECB's key interest rates are at levels which, if maintained for a sufficiently long period, will make a strong contribution to achieving" its medium-term inflation target of 2%.
Christine Lagarde insists that the question of a rate cut has not even been raised this week, but the markets are not buying it.

Given the weakness of our economies (INSEE revises French growth downwards from +0.9 to +0.8%, Germany will end 2023 in recession), the bond markets cannot imagine the ECB doing less than the FED.

As for US indicators, the robustness of the economy continues: US retail sales rose by 0.3% on a sequential basis in November 2023, where consensus was expecting a slight decline, following a 0.2% drop the previous month (revised from an initial estimate of -0.1%).

The Commerce Department, which publishes these figures, states that excluding the automotive sector (vehicles and equipment), US retail sales rose by 0.2% last month, after remaining stable in October.
The job market was also buoyant, with the Labor Department announcing 202,000 new jobless claims in the United States for the week ending December 4, down 19,000 on the previous week's revised figure (221,000, compared with 220,000 initially announced).



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