ForexLive European FX news wrap: Dollar mixed, more central bank pushback

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/centralbank/ecbs-vasle-market-pricing-for-rate-cuts-is-excessive-20231218/">ECB's Vasle: Market pricing for rate cuts is excessive</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-kazimir-inflation-optimism-not-enough-to-declare-victory-and-move-on-to-next-stage-20231218/">ECB's Kazimir: Inflation optimism not enough to declare victory and move on to next stage</a></li><li><a href="https://www.forexlive.com/news/icymi-ecb-reportedly-not-looking-to-any-dovish-pivot-before-march-next-year-20231218/">ICYMI: ECB reportedly not looking to any dovish pivot before March next year</a></li><li><a href="https://www.forexlive.com/centralbank/feds-mester-markets-are-a-little-bit-ahead-of-central-banks-on-rate-cuts-20231218/">Fed's Mester: Markets are 'a little bit ahead' of central banks on rate cuts</a></li><li><a href="https://www.forexlive.com/centralbank/boes-broadbent-policy-reaction-to-shocks-likely-to-be-delayed-than-in-a-perfect-world-20231218/">BOE's Broadbent: Policy reaction to shocks likely to be delayed than in a perfect world</a></li><li><a href="https://www.forexlive.com/news/germany-december-ifo-business-climate-index-864-vs-878-expected-20231218/">Germany December Ifo business climate index 86.4 vs 87.8 expected</a></li><li><a href="https://www.forexlive.com/news/snb-total-sight-deposits-we-15-december-chf-4626-bn-vs-chf-4717-bn-prior-20231218/">SNB total sight deposits w.e. 15 December CHF 462.6 bn vs CHF 471.7 bn prior</a></li><li><a href="https://www.forexlive.com/news/japan-business-federation-head-says-boj-should-normalise-policy-as-soon-as-possible-20231218/">Japan business federation head says BOJ should normalise policy as soon as possible</a></li></ul><p>Markets:</p><ul><li>AUD and NZD lead, JPY lags on the day</li><li>European equities lower; S&amp;P 500 futures up 0.2%</li><li>US 10-year yields down 2.1 bps to 3.907%</li><li>Gold up 0.2% to $2,023.54</li><li>WTI crude up 0.9% to $72.09</li><li>Bitcoin down 3.2% to $40,890</li></ul><p>It was a quiet session for the most part, with the dollar trading more mixed. The notable headlines were from major central banks, who continue to push back against market pricing for rate cuts for next year. But this time around, traders aren't having any of it.</p><p>Vasle and Kazimir both reaffirmed that the ECB isn't considering rate cuts yet but traders are still seeing ~57% odds of a March rate cut. Meanwhile, Mester is also helping Williams on Friday to walk back some of the remarks from Powell's press conference last week. Then, we saw Broadbent came out to say that the BOE is still not convinced on the wages front just yet to consider any policy pivot.</p><p>All of that didn't do much to shake markets though. The dollar remains steady overall but trades a bit more mixed on the day. USD/JPY gained from 142.40 to 142.80 despite lower yields while the antipodean currencies are maintaining slight gains since early Asia trading.</p><p>Besides that, there wasn't much for traders to work with. European stocks remained tepid after the stirring gains in recent weeks while US futures are little changed. In the bond market, yields are lower but not really dropping too hard on the day.</p><p>It is a week where things are starting to wind down in markets, so quiet days like this one will be more commonplace over the next two weeks. The BOJ is all there's left on the agenda for this week, so we'll wait and see if there is one last surprise before the Christmas holiday next week.</p>

This article was written by Justin Low at www.forexlive.com.