COPPER TECHS: (K5) Bull Cycle Remains In Play

Wells Fargo has changed its Fed rate call, saying that while core CPI looked better than headline, "when looking through the month-to-month noise, the inflation data have been fairly stubborn in recent months, neither gathering nor losing speed." (They estimate core PCE came in at 0.21% in December.)

• Therefore in addition to "the more resilient labor market data seen over the past couple months, we have revised our expectations for the federal funds rate outlook. We now expect two 25 bps rate cuts by the FOMC this year, in September and December, down from the three cuts we anticipated coming into the year. If realized, the target range for the federal funds rate would be 3.75%-4.00% at year-end 2025."

The Norwegian goods trade balance widened to NOK83.2bln in December, up from NOK74.1bln in November. For 2024 overall, the trade surplus was NOK745bln, 13% below 2023’s level. Excluding offshore trade, Norway ran a deficit of NOK338bln (11% larger than in 2023).

• Total exports were down 4% Y/Y at NOK1,805bln, while imports rose 3.6% Y/Y to NOK1,061bln. The weak NOK likely pushed import prices (and therefore total import values) higher through the year.
• Natural gas exports were NOK559bln in 2024, 11% lower than in 2023. However, natural gas exports still exceeded those of crude oil (which totalled NOK529bln).
• The end of the Russia-Ukraine transit deal and recent cold weather in Europe have supported natural gas prices in January. These developments will have a positive impact on Norwegian gas export values from a price and volume (i.e. substitution) perspective.
• Fish exports were NOK168bln, a new record high.

FX Exchange traded Weekly Option, expiry Friday:

• EURUSD 1.0500c, sold at 0.00035 in 1.2k.