Trading volume was generally low yesterday ahead of the U.S. Thanksgiving holiday, with expectations of a U.S rate increase next month already priced in by markets. Despite the lack of volumes, the market was quite eventful as US stock markets closed in record highs, and the Dollar taking a breather from the recent rally. An earthquake in Japan was also at center stage, but the 6.9 on the scale earthquake was not strong enough to shake the market significantly. In politics, Trump announced that he will withdraw from the Trans Pacific Partnership which is signed by12 countries that cover 40|% of the world’s economy. Today’s calendar is light, and includes only Existing Home Sales from the US and Industrial orders from the UK.
Currencies: The Dollar retreated from tis 14 year highs versus other currencies and seems to have taken a small breather for now. Before this break, the Dollar Index had for 10 straight days, as investors believe that Trump’s fiscal spending and tax cuts will increase inflation sooner than what was expected. The EUR bounced to 1.0648 in its first positive daily session since after the US elections. The GBPUSD also rose yesterday after Prime Minister Theresa May said “we want to get the arrangement that is going to work best for the UK and that will work best for business in the UK…I understand that people don’t want a cliff edge”. The market reacted favorably towards those comments having climbed 1.2%.
Oil and Gold: The Dollars correction pushed GOLD prices higher to $1220. Prices have fallen 10% since the US election outcome. Oil prices surged 4% on Monday, after comments from Russian President Vladimir Putin raised hopes that producer countries will reach a deal at a meeting next week to limit output.
Stocks: All 3 of US major stocks closed at record highs yesterday, continuing the post-election rally as energy and other commodity-related shares gained and Facebook led a jump in technology. The Dow Jones ended up 88.76 points, or 0.4%, at 18,956.69, while the S&P 500 16.28 points, or 0.75%, to 2,198.18 and the Nasdaq added 47.35 points, or 0.8%, to 5,368.86.
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