Quiet Day for Markets on US Holiday
Global sentiment stayed upbeat overnight, with major equity markets edging higher in what proved to be another subdued session due to the US Thanksgiving holiday. Trading activity across asset classes remained light, and most instruments stayed locked within recent ranges as investors used the quieter backdrop to reassess the latest run of data and geopolitical developments. Currency markets were restrained, with the majors all trading in tight ranges, the DXY ultimately slipping just 0.03% on the day to close at 99.55. Commodities saw a touch more movement in thinning liquidity. Brent rose 0.33% to $63.34, while WTI gained 0.77%, settling at $59.10 a barrel, supported by ongoing concerns surrounding the Russia–Ukraine conflict. Gold eased slightly, slipping 0.10% to 4,156.93 dollars, though it continued to hold just under key resistance levels.
Yen Remains in Focus for FX Traders
The Yen remains in focus for FX market participants into the end of this week, with some key data due out of Japan and the threat of intervention still sitting at the forefront of traders’ minds. Tokyo Core CPI data is expected to print at +2.7% year-on-year, and anything significantly off that will see big moves in the currency; however, the potential for intervention, with the Yen still trading at low levels against the dollar and on the crosses, remains high. USDJPY is about 1.5% off its recent highs, but it is widely known in the market that Japanese authorities are uncomfortable with it above 155.00, and thinner liquidity conditions into the weekend could provide the perfect environment to knock the pair back under that level. Support on the daily chart comes in around 155.50 at the moment, and a break under this – with a bit of help from the MOF – could see the pair much lower in short order.
Markets to Pick Up into the Weekend
Traders are expecting global markets to pick up again today after yesterday’s Thanksgiving Day breather, with key data due out across all three trading sessions and US markets returning later on. The Asian session will see an early focus on Japan with the key Tokyo Core CPI data (exp. 2.7% y/y) due out; Yen traders are expecting plenty of volatility around the event. The London session will see German inflation data in focus, with numbers coming through the course of the day as each state reports individually, the average expected to show the CPI decreasing by 0.2% month-on-month. The New York open will see the return of US markets, although the initial focus will be north of the border for key Canadian GDP (exp. +0.2% m/m); however, liquidity is still expected to remain thin later on, with many US trading desks operating with skeleton staffing heading into the long weekend.
