Markets widely expect a quarter point reduction when the policy-setting Federal Open Market Committee meets on December 9-10, and a focus will be on any signals about how much additional easing lies ahead. The Traders are pricing around 86% odds of Fed cut next Wednesday, and potentially 2-3 more reductions next year, LSEG data showed. Fed officials have been carefully watching the labour market to determine whether the Live Events Data overnight showed the number of Americans filing new applications for ...

Group 1: Dollar Index and Federal Reserve - The dollar index (DXY) fell by -0.03% on Monday, influenced by dovish comments from Fed Governor Christopher Waller advocating for a December rate cut [1] - Waller's comments increased the probability of a Fed rate cut next month to 80% from 30% [1][3] - A stock rally on Monday reduced liquidity demand for the dollar, while weakness in the yen provided some support for the dollar [1] Group 2: Euro and Ukraine Conflict - The EUR/USD rose by +0.12% on Monday due to dollar weakness and improved prospects for peace in Ukraine, as NATO Secretary General Rutte expressed confidence in a peace deal [4] - The euro's gains were limited by an unexpected decline in the German November IFO business confidence, which fell -0.4 to 88.1, below expectations [4][5] Group 3: Japanese Yen and Economic Concerns - The USD/JPY rose by +0.26% on Monday, with the yen under pressure due to concerns about Japan's debt burden [6] - The Japanese government approved a 17.7 trillion-yen ($112 billion) stimulus package, exceeding last year's package, which contributed to the yen's weakness [6] - Trading activity in the yen was below normal due to the Japanese Labor Thanksgiving Day holiday [6] Group 4: Market Expectations for Rate Cuts - Markets are pricing in a 2% chance of a -25 basis point rate cut by the ECB at the December 18 policy meeting [5] - There is a 16% chance of a BOJ rate hike at the next policy meeting on December 19 [7]