General Market Analysis – 29/11/24

Quiet Markets for Thanksgiving Holiday

As expected, it was a quiet trading day across most financial markets yesterday as investors and traders alike reduced activity due to the US Thanksgiving Day holiday. US markets were closed, but the three major indices futures all pushed higher: the S&P rose by 0.2%, the Nasdaq by 0.3%, and the Dow by 0.2%. The dollar also had a quiet day, with the DXY gaining slightly, moving up 0.07% to 106.16. Oil prices saw some movement as news of ceasefire violations in Israel hit the wires, with Brent gaining 0.5% to reach $73.17 a barrel and WTI rising 0.2% to $68.88 a barrel. Gold also moved higher on the news, as haven buyers entered the market, increasing by 0.2% to close at $2,640.96 an ounce.

Asian Currencies on the Back Foot for Tariff Trades

Asian currencies have been trading on the back foot for the past few weeks following Donald Trump’s US election victory, as investors fear tariffs across the globe will hit the region hard. The CNY has been the most affected in the initial market reaction, but other Far Eastern currencies have also suffered, with the Korean won particularly vulnerable. This comes after a surprise rate cut from the Korean Central Bank earlier this week. Other currencies being targeted by traders include the Malaysian ringgit and the Singapore dollar, with bearish positions on the latter now at a two-year high, as well as the Indonesian rupiah. Given Trump’s recent updates, traders expect further volatility in these currencies in the coming weeks, with most favouring short positions.

US Markets Back Open Today

US markets reopen today, although relatively quiet trading is expected, as many trading desks will operate with reduced numbers, with staff taking advantage of the extra day off to extend the weekend. All other markets are running as normal, and some macroeconomic events may drive movements. In Asia, the initial focus will be on Japanese markets, with the release of key Tokyo CPI data early in the session. A range of updates is expected as Europe opens, starting with Swiss GDP data, followed by Eurozone flash CPI numbers. Later in the day, Bank of England Governor Andrew Bailey will address the press on the Financial Stability Report. In North America, Canada’s latest GDP data will be released near the start of the New York trading session.

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