Daily Newsletter 12/10/25
Today is the Fed’s day.
Dollar and euro hold steady ahead of Fed decision
The dollar and euro are trading in a narrow range as markets await the Federal Reserve’s policy announcement. The euro is slightly firmer against the dollar, but moves remain subdued as investors have already priced in a modest rate cut. Strong labor data from the U.S. hasn’t altered expectations, and the focus is now on Chair Powell’s remarks and the updated path for 2026 policy.
U.S. index futures are slightly lower this morning as traders position cautiously before the decision.
Gold firms near recent highs amid caution
Gold is consolidating just below recent peaks, supported by a softer dollar and ongoing geopolitical uncertainty. Investors are hesitant to add big positions before hearing how dovish or hawkish the Fed’s tone might be regarding future cuts.
Oil steadies near recent lows amid supply concerns
Oil prices are little changed but remain pressured after a sharp decline in recent weeks. Markets are balancing signs of strong U.S. output and potential oversupply next year against hopes that easier Fed policy could lend some support to global demand.
Copper eases after strong rally
Copper has slipped back after hitting multi-month highs. Traders are weighing supply constraints against lingering doubts about China’s economic outlook, with muted signals of additional stimulus from Beijing dampening momentum.
Our takeaway:
The 25-basis-point cut is already fully priced in, and we share the market consensus on that view. Despite this, we continue to see several opportunities, as pricing is not uniform across all areas. As highlighted yesterday, we anticipate movement in the financial and housing sectors, as well as in the bond market. Since the cut is largely expected, market reactions following the announcement may be more muted than we expect. Our attention, however, is less on the size of the cut and more on the economic outlook the Fed will present.
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