- US November durable goods orders (advanced) 2.5% vs 1.6% estimate
- US November PCE core inflation +4.7% vs +4.5% expected
- Baker Hughes US oil rig count 480 vs 475 prior
- US November new home sales 0.744M vs 0.777M estimate
- UMich final October US consumer sentiment final 70.6 vs 70.4 expected
- Initial jobless claims 205K versus 205K estimate
- Canada October GDP +0.8% m/m vs +0.8% expected
Markets:
- Gold up $5 to $1808
- US 10-year yields up 3.5 bps to 1.49%
- WTI crude oil up $1.16 to $73.92
- GBP leads, JPY lags
- S&P 500 up 29 points to all time closing high of 4725, up 2.3% on the week
The mood was festive as we head into the holiday season as a classic risk on trade lift stocks, yields, commodities and even crypto. The mood steadily improved in early US trading despite a minor blip on the higher US inflation data. That led to some US dollar buying but it was short-lived.
Equities were steadily bid ahead of a four-day break in US markets. Canadian equities and US bonds will open until 1 pm ET (1800 GMT) on Friday but trading is typically thin.
USD/JPY made some headway to 114.40 in a choppy rise but the bigger moves were in yen crosses were all of the majors made new one month highs against the yen, with the exception of CAD. The charts all broke comfortably above the highs of last week in a sign that the market is increasingly comfortable with omicron risks.
Cable rallied steadily in Europe for the second day on a potentially flow-driven move as the calendar winds down. The pair added 65 pips on the day but chopped sideways in New York.
The euro fell to session lows on USD strength after the hot PCE report but after probing below 1.1300 the pair reversed to 1.1329 in a small daily gain.
Of the commodity currencies, only NZD failed to make a new high in US trade but it was the loonie lagging the way on the day as it failed to catch a tailwind from a solid Oct GDP report along with a good Nov flash estimate. With oil hitting a four-week high, it might only be a matter of time.
