- Gauteng covid cases continue to trend lower
- US equities crank up strong games, now higher on the week
- Biden: Senator Manchin and I are going to get something done
- WTI crude oil futures settle at $71.12
- Australian dollar rises to session high as risk tone continues to improve
- U.S. Treasury sells $20 billion of 20 year bonds at a high yield of 1.942%
- German Chancellor Scholz: There is an urgent need for de-escalation on Ukraine border
- European equity close: Strong gains push stocks higher for the week
- UK reports third highest daily covid case count
- Boris Johnson set to make circuit breaker announcement within 48 hours
- Eurozone Dec flash consumer confidence -8.3 vs -8.0 expected
- European natural gas prices rise by more than 23% to stratospheric levels
- New Zealand GDT price index -1.5%
- European FX news wrap: Sentiment buoyed in very lacklustre trading conditions
- Philadelphia Fed December nonmanufacturing business activity index 28.3 vs 46.1 previously
- Canada October retail sales +1.6% vs +1.0% expected
- US current account for the 3Q -214.8B vs $-205.5 billion
- UK offers 1 billion pounds to firms hit hardest by Omicron
- The NZD is the strongest and the CHF is the weakest as NA traders enter for the day
- Cleveland Fed's CPI Nowcast almost at 7%
The downside bleeding stopped in the stock market today after 5 of 6 trading days moved lower. Today, it was fast break the other way as the on again/off again fear-o-meter pointed to less fear today. That led to risk on flows.
- Stocks moved sharply higher
- Yields moved higher
- Crude oil rose by over 4%
- Flow of funds in the forex market moved into the commodity currencies led by the New Zealand and Australia dollar, and out of the safe haven currencies including the JPY and the CHF. The USD is closing mostly lower.
Starting with the stock market, the NASDAQ index and small-cap Russell index led the way with gains over 2.4%. The Russell index has been hit hardest over the last month or so with a decline of over 14.5% from its November high. So the rebound today of 2.95% is still a modest consolation but is nevertheless better than moving lower.
The NASDAQ index fell by about 8.34% from its high to the low reached yesterday, but rose by just over 24% or 360 points today to 15341.10. In the process the index moved back above its 100 day moving average at 15173. It's 50 day moving average remains higher at 15471.03
For the S&P index, it rose by a respectable 1.52%, and in the process extended back above its 50 day moving average at 4613 after holding just above its 100 day moving average at the lows during trading yesterday (at 4525.44 today). The index is closing at 4649.22, up 81.21 points or 1.78%
The finally or the Dow industrial average, it held above its 200 day moving average yesterday at 34639.75 (the low reach 34665), and broke above its 100 day moving average today at 35231.93. It is closing at 35492.69, up 560 points or 1.6%
European shares are also sharply higher with gains over 1.36% across the board.
In the US debt market, yields were up around 7.8 basis point for the 10 and 30 year bonds before the 20 year note auction. However some solid holiday buying at the auction from both domestic and international buyers helped to move those yields lower into the afternoon session. Nevertheless the yields are still trading higher on the day across the yield curve.
The price of crude oil has been sensitive to the omicron news, and although case counts continue to move higher, and there are expectations for more spread over the upcoming holidays, today was also a day where the market eased it's fear. Pres. Biden called on Americans to get vaccinated, and announce more vaccination and testing sites. He also said that come January, the US government would send out 500 million home Covid testing kits in an effort to slow the spread. The price of crude oil has been under pressure on expectations for lower demand. Meanwhile natural gas prices in Europe continue to soar for various reasons (see Adam's post here).
Crude oil prices are trading up to dollars and $0.86 at $71.46. That's a gain of 4.17% from the settle price yesterday
In the forex market, the snapshot of the strongest weaker shows the NZD the strongest while the JPY is the weakest. The US dollars closing mostly lower with gains only verse the safe haven JPY and CHF currencies.
Some technical levels to only in the new trading day:
- EURUSD: The EURUSD stalled the rally today near the 50% retracement of the range since November 30 at 1.13015. It stalled at the lows at the bottom of a swing area between 1.12595 and 1.12658. The pair is trading at 1.12800 into the close. The 200 and 100 hour moving averages are near 1.1286. That area will be the barometer for bulls and bears in the new trading day. Stay below keeps the bears more control. Move above and the sellers turned the buyers as the bias tilt back in the favor of the bulls.
- GBPUSD: The GBPUSD rallied in the London/early New York session up to the 100 hour moving average near 1.3258. After holding near that moving average, the price did dip down to a New York session low of 1.3229, but regathered itself and moved higher and ultimately above the 100 hour moving average (at 1.3258). The prices trading just above that level at 1.32645 is the day ticks toward a close. If the buyers can hold support against that level, the buyers will remain more bullish and traders could look toward the 1.3290 level followed by the 1.3300 level in the new trading day. A fall back below the 100 hour moving average and lower 200 hour moving average 1.32434, would tilt the bias back in the favor of the sellers.
- USDJPY: The USDJPY after holding resistance against its 100 hour moving average (currently at 113.73) late on Friday, again yesterday and during part of today's trading, the price was able to break above that moving average level, and gather momentum to the upside. The high price extended to 114.21 which was within a swing area going back to November 26 between 114.20 and 114.27. Sellers leaned against the area and rotated the price modestly to the downside into the close. The price is trading at 114.10. In the new trading day, staying above the 114.00 level would be in the favor of the buyers, getting above 114.27 would be needed to increase the bullish momentum.
- NZDUSD: The NZDUSD, after bottoming near the 38.2% retracement of the range since 2020 at 0.6700, was able to move higher in trading today and in the process extended above its 100 and 200 hour moving averages near 0.6758. The price is trading at 0.6771 into the close. In the new trading day stay above the 100 hour moving average at 0.6755 keep the short term bullish bias in play. Move below and there could be some disappointment.
- AUDUSD: Like the NZDUSD, the AUDUSD also moved higher today and in the process moved above its 200 hour moving average at 0.71399 and 100 hour moving average at 0.71442. The current price is trading at 0.7153. If the price can stay above the aforementioned moving averages, there is potential for more upside momentum.
In other markets as the North American session comes to a close:
- Spot gold is trading down $1.70 or -0.09% its $1788.60
- Spot silver is trading up $0.22 or 1.02% at $22.48
- The price of bitcoin is trading at $48,773
