Risky assets such as stocks and cryptocurrencies saw some good gains yesterday, especially in the S&P 500 Index.
- After worsening risk appetite gripped markets towards the end of last week, the first day of this week started in a more risk-on mood, with global stock markets and the crypto sector gaining value. The S&P 500 Index had its best day in 6 week, closing above the round number 6,700, while Bitcoin broke through one key resistance level.
- The US Dollar is slipping within its long-term bullish trend as markets continue to price in more and more a Fed rate cut at the next meeting on 10th December. The CME FedWatch tool suggests the chance of this cut happening has risen as high as 81%. It is worth noting that the Fed is going to make its decision without ever seeing a whole slew of US economic data which will never be compiled due to the long-running US government shutdown which ended a few days ago.
- In the Forex market, the USD/JPY currency pair failed to get established above ¥157.00 and is starting to look a little vulnerable well below last week's high not far below ¥158.00. Trend traders will be long of this currency pair, although they will remain vulnerable over the short-term to potential intervention from the Bank of Japan or Japanese Government which does not want to see the Yen depreciate much further. Since today's Tokyo open, the best performing major currency has been the Japanese Yen and the worst performing currencies have been the New Zealand and Australian Dollars.
- Bitcoin and other cryptocurrencies gained value yesterday, with Bitcoin advancing after holding up above former resistance at $85,369.I thought that if it could break above the resistance level at $88,487 that would be a more bullish sign, but that level is continuing to hold, suggesting we are going to see further strong gains for Bitcoin in the near term.
- There are two high-impact economic data releases scheduled for today, both in the USA:
- PPI (an inflation indicator, expected to show a month-on-month increase of 0.3%)
- Retail Sales (expected to show a month-on-month increase of 0.4%)
- During tomorrow's Asian session, there will be a release of Australian CPI (inflation) data, which is expected to show a slight uptick in the annualized rate to 3.6%.A higher-than-expected result might boost the Aussie.
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