US Stocks Climb into Thanksgiving Holiday – Nasdaq up 0.8%
US equities extended their winning streak overnight, with major indices posting another round of gains as confidence around imminent Fed rate cuts continued to build. The Dow advanced 0.67% to 47,427, the S&P 500 added 0.69% to 6,812, and the Nasdaq outperformed with a 0.82% rise to 23,214. Treasury markets were largely steady ahead of the Thanksgiving holiday, with the 2-year yield inching up 1.4 bps to 3.473%, while the 10-year held just under 4% at 3.992%. The US dollar drifted lower again, the DXY slipping 0.18% to 99.59. In commodities, oil prices pushed higher for a second session as doubts grew over any near-term progress toward a Ukraine ceasefire. Brent rose 0.98% to $63.06, and WTI gained 1.09% to $58.59. Gold also firmed, climbing 0.80% to close at $4,163.23.
Gold Pushes Up to Key Resistance Levels
Gold prices pushed higher again in trading yesterday as haven demand and rate-cut expectations combined to drive the world’s favourite precious metal to fresh one-week highs. Gold had retreated recently as haven demand dropped with the prospect of a peace deal being struck in Ukraine; however, in the last couple of days, concerns have increased that the hoped-for ceasefire will not eventuate anytime soon, and gold has rallied. A huge turnaround in Fed rate-cut expectations has also assisted the move. The market was pricing in just a 40% chance of a cut at the next meeting at the end of last week, but dovish comments from some key Fed members have seen those chances jump to 85%, resulting in dollar selling across all financial products. Gold now sits just below key long-term resistance at $4,173.00 on the daily chart, and a break higher would see the monthly high of $4,244.94 challenged in the coming sessions.
Thanksgiving Day Holiday to Dominate Trading Sessions
With Thanksgiving ahead, today’s macro calendar is light, and trading conditions are expected to quieten further. Even though the holiday is just in the US, traditionally the market tends to be quiet across all three trading sessions, and unless we see any major geopolitical updates hit the newswires, most traders are expecting to see range-bound conditions today. We have already seen some strong retail sales data out of New Zealand (+1.9% vs exp +0.6%), which has lent some support to the Kiwi dollar in the Asian session; however, there is little else on the calendar for the remainder of the session. The London session does see the release of the ECB’s Monetary Policy Meeting Accounts, but most market participants aren’t expecting that to move the dial too far for the euro. Holiday market conditions will hit swiftly once the US time zone commences, and liquidity is likely to thin into the later hours, especially once Europe closes for the day, leaving markets more susceptible to outsized moves should unexpected headlines emerge.
