Si prega di leggere di più su RADEX MARKETS
The US Dollar and Bitcoin continue to dominate. For a brief moment it looked as though competing currencies had been offered a reprieve from the Greenback’s relentless onslaught, but alas it wasn’t to be. The DXY seized 107 yesterday – a new high for the year. The Euro decisively lost $1.05 and looks precarious to say the least. Cable has weathered the storm a little better but has also lost considerably, now down to $1.26. The Dollar may be showing considerable strength, but pales in comparison to the surge we are currently seeing in Bitcoin, which added another $4k to its tally yesterday to breach $98k. While many traders are asking the obvious question of when Bitcoin will enter six figure territory, other traders are wondering when the rest of the crypto market will catch up. Altcoins have been bleeding heavily against BTC for well over two years at this point, with no end in sight. Historically, the alt market has rallied in earnest only once Bitcoin has settled down after establishing a new all-time high. However, as crypto becomes increasingly intertwined with traditional finance, the old patterns become less reliable. A much more reliable trade has been the flight to gold as tensions between Russia and the West re-escalate. Events stepped up a notch yesterday after Russia launched an ICBM towards Ukraine, in response to Western-made long-range missiles used against it. Gold is up 4% this week, closing just shy of $2,670 an ounce on Thursday. Oil has experienced a similar rise this week but remains close to yearly lows.
The Dollar has finally eased off a little this week, allowing competing currencies to catching a long-awaited breath of air. The DXY attempted a push beyond 107 last week but it seems as though such plans have been abandoned for now, settling instead above 106 for the time being. Cryptocurrencies remain strong; Bitcoin is now becoming comfortable with the $90k level with BTC dominance around 60%. Attentions are shifting away from the Middle East and back towards Ukraine and Russia. The incoming administration has been admittedly less interested in the conflict, but let us remind ourselves that the incumbents still have a couple of months left in office. The escalation is perhaps responsible for the recent bounce back in gold, which climbed up to $2,640 an ounce yesterday, still around $150 shy of its record high set in late October. Oil prices have risen marginally this week but remain stubbornly near yearly lows. Brent Crude remains around $73 a barrel while West Texas Intermediate hovers just under $70. Any escalation with Russia will buoy crude prices, if only temporarily, but global supply and demand dynamics continue to put pressure on oil markets. Nvidia is once again back under the spotlight. Later today, after the closing bell, the chipmaker will release its latest earnings report. In anticipation of the event, Nvidia (NVDA) shares rose almost 5% yesterday to $147. Ravenous appetites from the artificial intelligence craze continue to fuel demand for chips and many analysts are already claiming the report will smash expectations. Time will tell.
The US Dollar is now at yearly highs, which seems incredible considering it was at yearly lows only six weeks ago. The DXY made yet another step up during yesterday’s session to close the day just under 107. The Euro continued to get hammered by the relentless push in the Greenback, now flirting with $1.05 and below. The Yen is also feeling the pressure, USDJPY climbing back above 156 yesterday and rising higher still this morning in Asia. During a speech in Dallas on Thursday, Jerome Powell told reporters that the Federal Reserve was in no rush to ease monetary policy. The comments dampened hopes for a final rate cut during the Fed’s final meeting of the year, scheduled for the 18th of December. Powell referred to a solid job market and inflation levels above 2% as justification for the stance. FedWatch odds for the final decision are now roughly 50-50 between a 25 bps cut and no change. Gold once again closed the day in the red on Thursday, making it five for five. It is fair to say that the safe-haven asset has reacted badly to the election of Donald Trump, falling over 6% since the 5th of November to $2,564 yesterday. Silver is not faring any better, closing just above $30 an ounce after briefly wicking below that level. Bitcoin experienced a minor pullback yesterday but remains around $88k at the time of writing. Meme coins have been popping off here and there during the course of this week, in moves reminiscent of the previous bull-run.
After a solid week of rallies, markets eased off a little yesterday as euphoria surrounding the election finally began to dissipate. US indices all experienced pullbacks on Tuesday, with the Dow in particular losing 0.86% on the day. The S&P 500 also withdrew a little, closing the session 0.3% lower, while the Nasdaq Composite lost a mere 0.1%. Profit-taking extended around the globe, with European and Asian markets also seeing selling pressure. Crypto markets were not immune to the pullback either. After pushing beyond $90k yesterday, Bitcoin is now resting on its laurels before deciding where to go next. Still no loss of momentum in the Dollar however. The DXY continued to rip yesterday, pushing to 106 and briefly reaching highs not seen since May. The push has been particularly detrimental to the Euro, which is now teetering at yearly lows of 1.06 per Dollar. If there is one potential bump in the road for the Greenback, it may come in the form of US CPI data later today. Markets will also be interested to hear what Jerome Powell has to say on Thursday. Precious metals continue to feel the pain. Gold closed below $2,600 on Tuesday, now down almost $200 since its October peak. A surging Dollar certainly isn’t helping, but neither is the prospect of fewer rate cuts from the Fed moving forward. The elephant in the room however is that as the US pushes for a more unipolar world – with itself at the centre – safe-haven assets become a harder sell. Donald Trump is still two months away from being inaugurated and yet various factions around the world, from Gaza to Iran, are already beginning to strike more complacent tones.
Election week may be over, but traders and investors still have their work cut out. The election of President Trump changes the financial landscape and market participants will have to bear this in mind over the next few years. First things first: the US Dollar. The Greenback reacted strongly to the election result, gaining against major competitors to push the DXY up to 105. The Dollar has performed well over the past six weeks, in large part because of a higher interest rate compared to other currencies. The Federal Reserve has been unwilling to slash rates too aggressively because the US labour market has proven robust enough and inflation has been dampened enough to allow for less aggressive action. With Donald Trump at the reigns, the consensus is that inflation may increase again, which means the Fed will be even less inclined to cut rates. Nevertheless, the central bank continues to reiterate that all future decisions will be data driven, i.e. wait-and-see mode for now. US stocks were certainly happy with the election result. The Dow and S&P 500 both gained an impressive 4.6% on the week and the Nasdaq Composite fared even better with a 5.7% weekly close. All three indices ended the week on record highs. Tesla (TSLA) rose a massive 29% last week thanks to both the result and a strong earnings report. Cryptocurrencies took the news best of all. Bitcoin surged 17% last week following the result, dragging the rest of the market along with it. Total crypto market cap increased by almost half a trillion Dollars over the course of the week, bringing it to within closing distance of the 2021 all-time high. In the immediate term, there is not a lot going on this week. Armistice Day in parts of Europe and North America will make for barren trading conditions this Monday. Tomorrow has equally little to offer in terms of tradeable events. Wednesday alleviates the boredom a little with US CPI data, before Jerome Powell delivers a speech the following day. Traders are probably grateful for the reprieve.
An extremely bullish quarterly earnings report from Nvidia paved the way for stock gains across the board last week. The Dow Jones continued to push further into unchartered territory, gaining 1.3% on the week and surpassing 39k for the first time. Similar story for the S&P 500, which ended the week 1.66% higher and further cemented its place above the 5k level. Despite the rally being started by technology companies, the Nasdaq Composite is the last remaining of the big three to have not yet established a new all-time high. The index gained 1.4% on the week but remains a hair’s breadth away from its highest close of 16,057 back in 2021. This is to say nothing of the real record breaker last week: the Nikkei 225. Decade-long records are not broken every day, but the Japanese index’s all-time high finally tumbled from its pedestal last Thursday after 34 years. Commentators could perhaps downplay the significance of the event by pointing to the weakness of the Yen as a contributor to the index’s performance, but where’s the fun in that. The economic calendar does not have much to offer early this week, with the possible exception of new home sales later today. We will have to wait until Thursday to get to the meatier data releases, particularly the Personal Consumption Expenditures (PCE) index. The PCE figures are heavily favoured by the Federal Reserve as being the most accurate inflation gauge. Last week’s FOMC minutes did not garner the attention they are used to, partly because very little surprises were expected, but mostly because the event was overshadowed by a flurry of earnings reports.
