Daily summary: US100 pulls back from historical highs amid uncertainty over Fed meeting 🔎

US500 is seeing a pullback today, erasing all of yesterday's gains. US500 is down 0.3% but is holding above the 6050-point mark. US100 is also losing 0.3%, falling from yesterday's historical highs. The declines are linked to uncertainty about the Fed's plans for next year.

The US2000 is the biggest decliner on Wall Street. However, losses have been limited from over 1% to 0.7%.

DE40 lost 0.28% today, but on the other hand, EU50 rose by 0.25%.

US economic data was mixed today. November's retail sales came in strong, rising by 0.7% m/m versus an expected 0.5% m/m and the previous 0.4% m/m. However, this was driven by high car sales, as core sales disappointed with a rise of 0.2% m/m versus an expected 0.4% m/m and the prior 0.1% m/m.

Industrial production fell for the third consecutive month, down 0.1% m/m, against expectations for a 0.3% m/m increase and the previous decline of 0.3% m/m. It is worth noting that PMI and ISM data have remained below 50 points in recent months.

In response, the EURUSD pair rebounded above 1.0500, but over the course of the day, the pair remains close to yesterday's closing level.

The lack of an upside surprise in US data makes a Fed rate cut almost certain in tomorrow's decision. Nevertheless, it does not necessarily mean a so-called "hawkish" cut. However, the market still sees potential for higher interest rates historically, as 10-year bond yields are near 4.4%.

Inflation in Canada came in slightly below expectations at 1.9% y/y. On the other hand, core measures like trimmed and median inflation exceeded expectations, at 2.7% and 2.6%, respectively.

USDCAD breached the 1.4300 level today for the first time since 2020. The third consecutive decline in inflation below expectations shows that strong rate cuts by the BoC have not prevented inflation from reaching its target.

USDJPY is seeing potentially its first positive session in 7 days, which may be linked to increasing pressure on the BoJ to raise interest rates. Although expectations recently pointed to a 60-70% chance of a hike, these odds dropped this week to 15%. Currently, a rate hike is priced at a 20% probability. The BoJ decision will take place on Thursday before markets open in Europe.

UK labor market data came in positively. Jobless claims rose by just 0.3k compared to expectations of 28.2k. Wages for October increased by 5.2% y/y against expectations of 4.6% y/y and the prior 4.4% y/y. GBPUSD is rebounding for the second consecutive session.

The IFO index from Germany for December fell today to 84.7 points, against expectations to remain at 85.6 points.

Oil is down 1.5% today, linked to weak economic data from China earlier this week and November refinery data, which was the lowest since June.

Gold is experiencing a correction today on fears of a "hawkish" Fed rate cut. Gold is testing $2,340 and is at its lowest level since December.

Cocoa is setting new historical highs for the second day in a row, nearing $12,000 per ton. The increases are tied to concerns about cocoa production in Côte d'Ivoire. A Bloomberg survey points to production at 1.9 million tons for the 24/25 season, compared to government estimates of 2.1-2.2 million tons.

Sugar is seeing a sharp selloff today, falling below 20 cents per pound, linked to strong sugarcane processing in Brazil. In the second half of November, 20.35 million tons of cane were processed, compared to expectations of 15.5 million tons.

Bitcoin is gaining another 1.15% today and is holding around $107,000. Earlier in the day, gains were even higher, briefly surpassing $108,000. However, with the opening of the cash session, we saw a slight correction to around $105,000.

Bitcoin dominance continues to rise and now stands at 57.80%. Currently, the entire market's attention is focused on the largest project. As a result, the altcoin market has not performed well in recent days, despite record levels in BTC.