03/12/2025 Daily Reports
Global markets are showing signs of recovery and stability, driven largely by high expectations (89% chance) of a Federal Reserve interest rate cut next week.
Nasdaq and US futures are trading higher, boosted by strong tech earnings (Marvell Technology) and renewed risk appetite, while investors await key economic data like the ADP Employment Report.
European markets (DAX) and Asian markets (Nikkei) are stabilizing after recent losses, though Japan remains cautious due to potential rate hikes by the BOJ.
In commodities, Gold remains bullish supported by a softer dollar and Fed policy hopes, whereas Brent Crude Oil prices have slipped on reports of Russia-Ukraine peace efforts. Natural Gas remains range-bound with a slight decline.
Open A Live Account
CDO has wide range of tools, professional and friendly support for clients to achieve their financial markets trading goals. Open a live account now to enjoy this experience with virtual deposit.
CDO TRADER
CDO TRADER, our cutting-edge trading platform, follows the technology from the forefront with new features added continuously. Moreover, CDO TRADER is now available for Android and iOS! So it allows you to trade on the go!
The Rise of the “Shadow Chair”
- The market is pricing in a “Shadow Fed Chair” effect, anticipating that a Trump-backed appointment guarantees aggressive easing.
- SOFR Surge: A massive buyer has emerged in SOFR futures (the largest trade in over a year), betting heavily that monetary policy will loosen rapidly under the new regime.
The Data Vacuum & Volatility
- Delayed Catalyst: Due to the government shutdown, crucial November labor market data is delayed until Dec. 16.
- Asymmetric Risk: Goldman Sachs strategists note that this data dump creates “asymmetric risk.” If the numbers confirm softening (as hinted by recent trends), it could trigger a violent repricing in favor of rate cuts just before the January meeting.
The Steepener Play
- Bear vs. Bull: While short-term traders bet on cuts, bond vigilantes warn of a “Bear Steepening.” If the Fed cuts rates while inflation remains above target (to satisfy political pressure), long-term yields could spike as the market demands a higher risk premium.
- Yield Watch: The 10-year Treasury yield has slipped to 4.08%, but the floor is fragile.
The Verdict:
- The market is no longer just trading economics; it’s trading the political integration of the Fed.
