Market Drivers November 25, 2019
Risk on as the week starts
Cable see strength as the week starts
Nikkei 0.78% Dax 0.767%
UST 10Y 1.78%
Oil $58/bbl
Gold $1457/oz
BTCUSD $6768

Europe and Asia:
EUR IFO

North America:
No Data

Risk FX was bid at the start of week’s trade with USDJPY inching its way back to 109.00 while cable stabilized and pushed back towards 1.2900 as polls showed PM Johnson in a comfortable lead in the UK election polling.

Equity markets were buoyed by news that China will raise penalties for intellectual property theft – a move seen as an olive branch to the Trump Administration on trade issues.

Risk assets were also aided by generally positive US data last week which has firmed investor sentiment and allayed any fears of significant slowdown in the US growth. We continue to believe that markets are mistaken. That the US has essentially hit peak cycle and that a revival of growth on the back of a resurgence of US consumer is wildly optimistic. But for now, the easing of tensions and the continued loose monetary policy is all that is needed for equity momentum to push higher and that in turn is supporting risk FX.

In North America this week the markets will see a holiday-shortened week with almost all dealing coming to a halt by Wednesday. Elsewhere the calendar remains barren so the low volatility environment that we saw last week is likely to continue unless we see some exogenous shocks.

Wednesday morning will be the key day for the dollar as the US data dump could either make or break the current risk-on mood. The market will get a look at the Durable Goods numbers and most importantly Personal Income and Spending data which could either confirm or refute the consumer resurgence narrative.

We noted that USDJPY needs to close above the 109.00 figure in order to reestablish its upward trend and traders will be watching to see the market can drive it through that level today.