Market Update – November 24 – USD & Yields Higher, Stocks Mixed, Oil Recovers

USD (USDIndex 96.50) holds on at highs; EM currencies under particular pressure. (TRY lost 15% after Erdogan refused a rate rise). RBNZ raised rates but NZD fell (like the last time they raised rates!) JPY Inflation 2 ticks better than expected. USDJPY at January 2017 levels around 115.00. PMI data better across the globe, Stocks mixed in US & Asia, Yields bid, Oil recovered significantly and Gold pressured by yields. Biden invites Taiwan to its “Summit for Democracy”, WHO talks of additional 700k Covid deaths across Europe (Slovakia latest to talk lockdowns).
US Yields 10yr trades at 1.667%, down from yesterday’s 1.684% high.  
Equities Mixed. Musk sold more stock, Banks & Oil majors lead. USA500 +7.76 (0.17%) at 4690 USA500.F trades lower at 4684.
USOil – rallied over 3% to $78.20 highs despite global strategic reserves being sold to cool prices.
Gold found a floor at 1782, but struggles to recoup $1800 at $1790.
FX markets – EURUSD down to 1.1245, USDJPY over 115.23, earlier now at 114.88 & Cable back to 1.3375

European Open – December 10-yr Bund future up 26 ticks, US futures also broadly higher. RBNZ delivered expected rate hike & markets seem to be scaling back fears of escalating inflation as even dovish leaning BoE & ECB members highlight risk of second round effects. ECB VP Guindos highlighted overnight that the drivers of inflation are becoming more structural, which adds to signals that the CB is finally ready to start reining in stimulus. DAX & FTSE 100 futures currently up 0.3% & 0.2% respectively.

Today – Big data day ahead of Thanksgiving Weekend. – German Ifo, US Weekly Claims GDP, PCE, Durables, FOMC Mins. & ECB speak

Biggest FX Mover @ (07:30 GMT) NZDJPY (-0.77%) RBNZ in-line but Dovish, sank from breach of 80.00 yesterday to 79.24, and 79.40 now. Faster MAs aligned lower,  MACD signal line & histogram falling & below 0 line, RSI 35 & weak, Stochs OS. H1 ATR 0.17, Daily ATR 0.70.

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Stuart Cowell

Head Market Analyst

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