On the data front it will be a thin day, as there is no significant news to be released today. Most likely the market will focus on signals from the OPEC countries ahead of the meeting tomorrow as well as possible results for the Italian Referendum which will take place on Sunday, which will decide the future of Prime Minister Matteo Renzi. Investors’ concern is that the country’s banking sector would fail, with at least 8 banks at risk, if Renzi loses. The US releases Q3 GDP and Consumer Confidence Index. Price action yesterday was cautious, as the markets took a breather from the recent rally after Trump’s election. Fed’s Powell and Dudley are also scheduled to speak.
Currencies: : Despite a break in its rally, the Dollar is still on track for its strongest 2-month gain since early 2015 on expectations that the FED is almost certain to raise rates next month. EURUSD briefly rebounded to 1.0686 yeste4rday only to trade under 1.06 again, and while the JPY fought back against the Dollar, the pair rebounded from 11.30 yesterday to 112.75 later in the session. It remains 7% higher for the month. GBPUSD remains within a tight range 1.2385 – 1.2450. Overall, the CAD and JPY have been the strongest currencies since the start of the week while the GBP has been the weakest.
Oil and Gold: Oil dropped as low as 45.14 but managed to recover above 47 throughout the day on renewed optimism about an OPEC deal to cut supply. There have also been rumors that Iran and Russia are willing to cooperate on an output cut/freeze. Gold rebounded from 1185 support levels and has stabilized around 1190. Last week the price reached $1170, which was the 9.5 month lows for the yellow metal, which is priced in dollars and becomes more attractive to holders of other currencies when the dollar falls.
Stocks: The rally in the US equity market ran out of steam overnight. The S&P500 was down -0.53%, though still up more than 6% since early-November. That was the worst performance for Wall Street in nearly a month as some investors booked profits and pushed stocks lower. Dow Jones, S&P 500 and NASDAQ all closed mildly lower losing -0.28%, -0.53% and -0.56% respectively.