US Markets Close Out the Week on Front Foot – Dow up 0.6%
US markets extended their post-holiday momentum on Friday, with all three major indices finishing the session in positive territory and securing weekly gains. Trading activity remained relatively subdued following Thanksgiving, and although a pricing outage from the CME Group caused temporary disruption, it ultimately had minimal effect on overall market direction. The Dow rose 0.61% to 47,716, the S&P 500 added 0.54% to close at 6,849, and the Nasdaq advanced 0.65% to 23,365. The US dollar drifted lower again, slipping 0.12% to 99.48, cementing its weakest weekly performance since July. Treasury yields firmed slightly, with the 2-year yield up 1.4 basis points to 3.489% and the 10-year rising 1.9 basis points to 4.013%, though both remain near recent lows. In commodities, oil prices edged lower once more as ongoing Russia–Ukraine peace discussions failed to deliver fresh progress. Brent eased 0.78% to $62.38, while WTI dipped 0.17% to $58.55. Gold was the standout mover on the day, breaking out of its recent range with a strong rally of 1.97%, finishing at $4,239.44.
More US Data in the Days Ahead – PCE in Focus
Investors and traders alike will be paying close attention to US data this week, as we have more updates in the coming days which should give a better picture of the state of the US economy after the recent government shutdown. We have key updates due on manufacturing, services, and employment in the coming days, although the highlight of the week is likely to be the Federal Reserve’s favourite inflation number, the Core PCE Price Index, which is due out on Friday. We would normally be expecting to see the key Non-Farm Payroll numbers at the end of the first trading week of the month, but they have been delayed until December 16. Market pricing is still strongly in favour of a 25-basis-point rate cut from the Fed (87% chance on CME FedWatch); however, this week’s data could go a long way to changing those expectations if data surprises, one way or the other.
Markets to Kick Off Month in Positive Mode
Market sentiment remains constructive heading into the first sessions of the new month, with Friday’s upbeat close on Wall Street setting the tone for a positive start to December. It is a relatively quiet calendar day ahead for investors today, although there are a couple of risk events that could move markets. There is little in the way of tier 1 data in the Asian session today; however, we are scheduled to hear from Bank of Japan Governor Kazuo Ueda midway through the day, and anything new from him could see some strong moves in the yen. The London session sees mainly lower-tier data released; however, we do have our first tier 1 data out of the US shortly after the New York open, which should have traders on their toes. The ISM Manufacturing PMI (exp. 49.0) and ISM Manufacturing Prices (exp. 59.5) data sets are due out, and any significant deviations from expectations should see moves in the market.
