* Nasdaq, Alphabet, Tesla and Bitcoin all finish at record highs

* Nvidia falls into correction territory, down >10% from its record close

* US Services PMI surge to 38-month high, Eurozone PMIs mixed

* ECB’s Lagarde: ‘Darkest days’ of high inflation are behind eurozone

FX: USD edged marginally lower as markets eyed up the final big risk events of 2024. A doji candle printed on Friday denoting some indecision after five straight days of gains for the greenback. Seasonality typically points to a softer USD in December. But a hawkish Fed cut is expected by markets with economic projections for growth and inflation revised higher.

EUR traded above 1.05 and the key long-term 1.0448 support level. Better than expected PMI data battled with a French sovereign credit rating downgrade and lingering trade concerns.

GBP picked up after two strong days of selling saw cable look to be turning decisively lower. PMIs figures saw services beat but manufacturing marginally miss expectations. The 21-day SMA sits at 1.2671. We get a slew of UK data released this week, with the BoE meeting on Thursday. No rate cut is expected, but the data may inform on the February MPC decision.

USD/JPY turned higher a for a sixth straight day. The 10-year US Treasury yield rose again underpinned support for the major. The November top is 156.74.

AUD tried to steady just above the cycle lows around 0.6350. USD/CAD made fresh multi-year highs again as it hit a peak at 1.4270 before paring gains. Trade tensions are elevated.

US stocks: The S&P500 closed up 0.38% at 6,074. The tech-laden Nasdaq settled 1.45% higher at 22,096. The Dow finished at 43,717, off 0.25%. Tech led the gains with Tesla, Alphabet and Apple all posted record highs. Broadcom climbed over 11% after crossing a $1 trillion market valuation last week. It had surged 24% after strong earnings momentum on Friday. On the flip side, Nvidia fell 1.7% falling more than 10% from its record close made in late November. The Fed is fully expected to cut rates by 25bps on Wednesday. A relatively hawkish move is predicted with a new dot plot likely to see one less cut next year.

Asian stocks: Futures are in the green. Asian equities were muted to kick off the final week of big risk events of the year. The ASX 200 saw gold miners hit by the gold price reversal. The Nikkei 225 swung in and out of gains and losses. Japan PMI data highlighted “stubborn inflation”. China indices also oscillated between positive and negative territory on the mixed data.

Gold steadied after two strong down days. Last week saw a jump in US Treasury yields. Support in the gold has been found at the 21-day SMA at $2652.

Day Ahead – UK Jobs, US Retail Sales

It’s the middle of the month so we get the usual UK data dump. First up is the jobs data. The unemployment rate has been unhelpfully volatile, owing to well-publicised reliability issues. It’s expected to hold steady at 4.3%. But there are broader signs that the jobs market is cooling. Vacancies have fallen back more relative to other countries. The big hike to employer National Insurance contributions has hit employment expectations. For now, wage growth remains elevated and is likely to tick higher again on unfavourable base effects. The MPC forecast is 5.1% y/y growth in Q4.

The US consumer has been very resilient this year, and this is expected to continue into the new year. November US retail sales are expected to print at 0.5% m/m and the control group up by 0.4% m/m. Solid auto sales should help, along with decent Thanksgiving activity.

Chart of the Day – Bitcoin makes more record highs

The world’s most popular cryptocurrency hit an all-time top at $107,857 to start the week. Bitcoin is up over 9% this month and has gained every week except for one, since the November US election. It is up nearly 150% this year. ETF flows have driven prices recently with crypto experts predicting bitcoin is headed to $115k. Prices are overbought on several measures so warning of a correction. But that doesn’t mean they can’t go higher.