Market Update – November 23 – USD & Yields bid, Stocks & Gold sink

  • USD (USDIndex 96.36) testing 16-mth highs; rallied on Powell’s re-nomination & Brainard as Vice FED Chair. Commodity & EM Currencies pressured particularly. Stocks weaker partic. Tech stocks, Banks hold up.(Nasdaq -1.26%). Yields bid, Gold & Oil crashed further. Covid concerns grip Europe as winter dawns.
  • US Yields (10yr trades at 1.620%, down 28 bps from yesterday’s rally.  
  • Equities Lower. NASDAQ -1.26%, USA500 -15 (-0.32%) at 4682 USA500.F trades lower at 4665.
  • USOil – struggles but up from below $75.00, after discussions to release global strategic reserves to cool prices & OPEC talk of raising output.
  • Gold crashed over 2.5% losing over $45.00 following Powell news, next support $1800.
  • FX markets – EURUSD down to 1.1225 earlier, lifted to 1.1255 now, USDJPY over 115.00, earlier now at 114.75 & Cable back to 1.3400, from 1.3380. USDMXN 21.00, USDTRY  ATH 12.00, USDRUB 75.00 and USDZAR 15.8600.  

European Open – December 10-y Bund future down -28 ticks, underperforming versus US futures & suggesting a further rise in European yields, which already spiked sharply yesterday. The Covid situation may be weighing on the growth outlook, but investors are increasingly convinced that the ECB is indifferent to the spike in inflation & long yields are backing up as central bankers keep a lid on tightening expectations & ECB officials play down the risk of second round effects. DAX & FTSE 100 futures meanwhile are down -0.5% and -0.4% respectively, as the rise in yields & Covid jitters remain in focus.

Today – EUR & US Flash PMIs, BoE’s Bailey & Haskel, ECB’s de Guindos


Biggest FX Mover @ (07:30 GMT) EURNZD (+0.42%)  Bounced from 1.6070 yesterday to 1.6150 now rallied to breach 1.6200 Faster MAs aligned higher,  MACD signal line & histogram rising and significantly over 0 line, RSI 64 but cooling. H1 ATR 0.00214, Daily ATR 0.01102.

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Stuart Cowell

Head Market Analyst

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