Asia & European Sessions:
- Geopolitical risks are back in the spotlight on fears of escalation in the Ukraine-Russia after Russia reportedly used a new ICBM to retaliate against Ukraine’s use of US and UK made missiles to attack inside Russia.
- The markets continue to assess the election results as President-elect Trump fills in his cabinet choices, with the key Treasury Secretary spot still open.
- The Fed’s rate path continues to be debated with a -25 bp December cut seen as 50-50.
- Earnings season is coming to an end after mixed reports, though AI remains a major driver.
- Profit taking and rebalancing into year-end are adding to gyrations too.
- Wall Street rallied, led by the Dow’s 1.06% broadbased pop. The S&P500 advanced 0.53% and the NASDAQ inched up 0.03%.
- Asian stocks rose after Nvidia’s rally. Nikkei added 1% to 38,415.32 after the Tokyo inflation data slowed to 2.3% in October from 2.5% in the prior month, reaching its lowest level since January. The rally was also supported by chip-related stocks tracked Nvidia.
- Overnight-indexed swaps indicate that it’s certain the Reserve Bank of New Zealand will cut its policy rate by 50 basis points on Nov. 27, with a 22% chance of a 75 basis points reduction.
- European stocks futures climbed even though German Q3 GDP growth revised down to 0.1% q/q from the 0.2% q/q reported initially.
- Cryptocurrency market has gained approximately $1 trillion since Trump’s victory in the Nov. 5 election. Recent announcement for the SEC boosted cryptos. Chair Gary Gensler will step down on January 20, the day Trump is set to be inaugurated. Gensler has pushed for more protections for crypto investors. MicroStrategy Inc.’s plans to accelerate purchases of the token, and the debut of options on US Bitcoin ETFs also support this rally.
- Trump’s transition team has begun discussions on the possibility of creating a new White House position focused on digital asset policy.
Financial Markets Performance:
- The US Dollar recovered overnight and closed at 107.00.
- Bitcoin currently at 99,300, flirting with a run toward the 100,000 level.
- The EURUSD drifts below 1.05, the GBPUSD dips to June’s bottom at 1.2570, while USDJPY rebounded to 154.94.
- The AUDNZD spiked to 2-year highs amid speculation the RBNZ will cut the official cash rate by more than 50 bps next week.
- Oil surged 2.12% to $70.46.
- Gold spiked to 2,697 after escalation alerts between Russia and Ukraine. Heightened geopolitical tensions drove investors toward safe-haven assets. Gold has surged by 30% this year. Haven demand balanced out the pressure from a strong USD following mixed US labor data. Silver rose 0.9% to 31.38, while palladium increased by 0.9% to 1,040.85 per ounce. Platinum remained unchanged.
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Andria Pichidi
Market Analyst
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