Stocks push higher in holiday markets

US indices rebound from weak Friday close

The rally on Wall Street continues as indices pushed to new record levels on Friday but retreated into the close on Friday. Markets had started positively this morning though, and look set to extend the recent bull-run.

Currencies were mixed with the US dollar index (DXY), the measure of the dollar’s value against six major currencies, on the defensive for a sixth straight session and dropping 0.85%.

The dollar’s weakness meant that most currencies benefitted, with EUR/USD gaining 0.14% to 1.1192, GBP/USD up 0.16% to 1.3107 and AUD/USD rising 0.13% to 0.6992. USD/JPY slid 0.12% to 109.32, the second daily decline in a row. The 55-day moving average at 108.927 could be the next possible support point. That moving average has supported prices on a closing basis since October 4.

USD/JPY Daily Chart

Source: OANDA fxTrade

A surprise winner year-to-date

With one more trading session of the year to come, it’s time to start looking at the best- and worst-performing currencies of the year. Against the US dollar, the best performing G-10 currency was the Canadian dollar, gaining more than 4% while the British pound came second with an advance of almost 3%, according to Bloomberg calculations. At the other end of the table, two Scandinavian currencies under-performed, with the Swedish krona bottom and the Danish krone second-last.

Among Asian currencies, the Thai baht leapt ahead with gains of almost 8% while the South Korean won propped up the table.

German retail sales unlikely to jolt markets

As you might expect as the year comes to a close, the data calendar is light on content today. For Europe, German retail sales are the only item on tap, and they’re expected to show mild annual growth of 0.9% in November, up from 0.8% in October.

For the US session, the goods trade balance is seen widening to $68.75 billion in November from $66.53 billion the previous month, while pending home sales for the same month probably rose 5.8% y/y from +4.4% in October, according to the latest survey of economists. December’s Chicago PMI is expected to jump to 47.9 this month from 46.3 last month. To complete the session, the Dallas Fed manufacturing business index is expected to improve to +1.5 in December from -1.3 last month.

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

** Wishing you all a Happy New Year and a profitable 2020 **

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