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Major stock market indices power to all-time highs in the USA, Germany, and Australia.
Although global stock markets are mixed, with several markets such as China recently reaching multi-month lows, some stock markets are booming, trading at new record highs. The leader is the USA, where the S&P 500 broke its record, while the technology-based Nasdaq 100 Index is just a fraction off its record. In Germany, the DAX is rising powerfully, while in Australia, the ASX 200 Index has made a retracement after reaching a new high yesterday. Trend traders will be interested in these assets, especially the S&P 500 Index.
In the Forex market, commodity currencies were hit hard yesterday, notably the Australian Dollar – this may have contributed to the rise in the Australian stock market, which of course is denominated in the Australian Dollar. This is likely a result of Trump’s threats to impose a 100% tariff against the BRICS nations who are big consumers of commodities. Since today’s Tokyo open, there has been a bit of a bounce-back against this move, with the Canadian Dollar the biggest gainer and the Japanese Yen the biggest lower. The Brazilian Real has plunged to a record low against the US Dollar, putting the USD/BRL currency pair in focus, although this can be difficult to trade effectively as it is an exotic with a large overnight swap rate. Another notable development has been the EUR/USD currency pair trading below $1.05 again.
The Bank of Japan is considering hiking rates again, for the third time this year, at its next policy meeting on 19th December. This would be the first time in many years that the Bank of Japan has raised rates three times in one year, and the possibility of this happening may lead to an appreciation in the Japanese Yen, which has been very volatile in recent months.
Fed member Waller has said that he is leaning towards voting for a rate cut at the Fed’s upcoming December policy meeting. The market is now pricing in a 75% chance of a 0.25% rate cut by the Fed on 18th December.
The cryptocurrency Bitcoin continues to consolidate below $100,000 but the price action has started to look more bearish, suggesting a short-term fall is about to happen.
Yesterday’s release of US ISM Manufacturing PMI data was a little stronger than expected.
Today will see releases of:
- Swiss CPI (inflation) data, which is expected to show a month-on-month contraction of 0.1%.
- US JOLTS Job Openings data
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