Markets to Start Week on the Front Foot – Dow up 0.8%
Optimism once again hit US markets on Friday with Fed Chair Jerome Powell confirming that he thinks risks are becoming “more balanced” with regard to the next move in interest rates. This was enough again for investors to jump on the bull train and stocks moved higher as yields and the dollar dropped. The three major equity indices all recorded solid gains on the day, the Dow leading the way, finishing up 0.82% with the S&P and Nasdaq following closely, ending the day up 0.59% and 0.55% respectively. Treasury yields took a hit, the 10-year losing 13 basis points taking it back to nearly 4.2% and the 2-year losing 16 points, down to 4.55%. The dollar dropped, losing 0.25% on the index and Gold surged to notch up a record high.
Currencies at Pivotal Points as we Enter December Trading
Fed Chair Jerome Powell’s less hawkish comments on Friday helped arrest a 2-day recovery that the US dollar had been enjoying and now sets some major currencies and commodities at key pivotal levels as we enter the fresh trading week. The Aussie, Kiwi, Sterling, and Yen all now sit at key resistance levels against the dollar and breaks here could send currencies into fresh ranges which could open a whole new world of pain for dollar bulls. The Fed now enters its ‘blackout period’ ahead of its next meeting, so we will have no further updates from FOMC members to turn market expectations, however we do have some substantial data releases. But, for the moment and unless we have some significantly stronger data results out of the US, then traders will be looking for levels to sell the greenback and for break traders, that could occur in hours rather than days.
Thin Market Calendar Day Ahead for Traders
It is very thin on the calendar in terms of macroeconomic data releases or central bank action today and so traders are expecting the positive momentum from the US markets on Friday to kick through for the next few sessions. There are only minor data releases due out in the Asian and US sessions today and the European session will see the focus temporarily move to the Swiss economy as we have the latest monthly CPI data released, but overall investors are expecting the prevailing trend to continue for the first few sessions of the week.
