Headlines:
- USD/JPY continues to dribble lower to start the new week
- USDJPY Technical Analysis: The JPY gains as speculations for a December hike increase
- Gold looks to kick start December in style by capitalising on technical breakout
- Heads up: It's the first week of the new month but non-farm payrolls will be absent
- BOJ governor Ueda: Delaying rate hike for too long could cause sharp rise in inflation
- Japan chief Cabinet secretary says monetary policy falls under jurisdiction of BOJ
- Heads up: Fed Chair Powell set to speak tonight, but don't expect monetary policy comments
- ECB's de Guindos says current level of interest rates is appropriate
- Eurozone November final manufacturing PMI 49.6 vs 49.7 prelim
- UK November final manufacturing PMI 50.2 vs 50.2 prelim
- UK October mortgage approvals 65.018k vs 64.200k expected
Markets:
- JPY leads, USD lags on the day
- European equities lower; S&P 500 futures down 0.7%
- US 10-year yields up 2.7 bps to 4.046%
- Gold up 0.5% to $4,251.61
- WTI crude oil up 1.1% to $59.11
- Bitcoin down 5.4% to $85,456
It's always nice when the first day of the new month falls on a Monday. It keeps things fresh for markets and we're definitely seeing a contrast in the landscape as compared to last week already.
The market mood is keeping more cautious and defensive again as risk aversion kicks in with month-end flows and the Thanksgiving holiday now out of the picture. US futures stumbled with cryptocurrencies also being a cause of concern as Bitcoin plunges by 5% back under the $90,000 mark.
The resumption of the selling is continuing to keep the pressure on from two weeks ago. And that will keep investors feeling a bit more nervous in going about their business to start the new month.
In FX, the Japanese yen is the standout mover after BOJ governor Ueda stepped up with a more hawkish rhetoric today. He didn't hold back in pushing a case for a rate hike in December and that's fueling speculation of a potential move later this month. USD/JPY slid hard during the session, falling from 155.50 to be down 0.8% on the day now at 154.90. The pair looks poised for its biggest daily drop since 10 October.
Besides that, the risk selloff is also leading to a bit of selling in the dollar as well. EUR/USD moved up from 1.1600 to 1.1640 while GBP/USD nudged higher from 1.3230 levels to 1.3260 now. Even the commodity currencies are holding higher against the dollar with USD/CAD down 0.1% to 1.3961 and AUD/USD up 0.1% to 0.6556 on the day.
In the equities space, the more defensive mood is pinning down US futures with S&P 500 futures down 0.8%. Tech shares are the main laggards with Nasdaq futures down 1.0% in what looks to be a heavy start after the Thanksgiving break. In Europe, major indices are also weighed down as such with the DAX lower by 1.5% and CAC 40 down by 0.8% on the day.
In the commodities space, oil is a modest mover with WTI crude climbing by over 1% after OPEC+ reaffirmed its decision to pause on production hikes. That is seeing price keep above $59 for now but well off earlier highs of close to $60. As for precious metals, the technical breakout in gold continues to take shape as we see another push higher today with bullion up 0.5% to $4,251 currently.
As for cryptocurrencies, they are also one of the standouts as Bitcoin is suffering a hemorrhage as it bleeds back below $90,000. The selling picked up during Asia trading already in a quick fall to just below $85,000. The pressure is still on with the cryptocurrency hovering near the lows and down 5% on the day to hold just above the $85,000 mark for now.
As another reminder, it may be the first week of the new month but there won't be any US non-farm payrolls release this Friday. So, market players will be left to fend for themselves for the most part and work with risk sentiment as the key driver to start December trading.
