Markets:
- Bitcoin up 14% to record $87,200
- WTI crude down $2.21 to $68.17
- Bond market closed for holiday
- Gold down $58 to $2625
- S&P 500 flat
- Russell 2000 +1.6%
US and Canadian newsflow was extremely light on Monday in large part due to Veteran’s Day and Remembrance Day holidays. There was some talk of Trump cabinet positions but none that would be of keen interest to the markets.
In the Middle East, there was a headline citing sources and Netahayu saying he would end Iran’s nuclear threat.
But the lack of news and bond market closure was no barrier to market moves, particularly bitcoin. It started strong and stayed strong in a sizzling rally to $87,200 where every dip was bought. The combination of a crypto-friendly election and a technical breakout has led to an impressive move.
Elsewhere the US dollar stayed strong but didn’t make any further headway in US trading as it flatlined early and then gave back a bit of the gains late. USD/JPY rose as high as 153.95 but sellers at the big figure held the line and it slipped to 153.66 last.
The euro hit the lowest since April at 1.0629 as the USD exceptionalism theme dominates. It bounced about 25 pips from the lows but will finish below the June intraday lows.
The pound also struggled and is flirting with the November low of 1.2834. It got as low as 1.2856 but found a few buyers there. Tomorrow’s jobs data could be a make-or-break moment.
USD/CAD tried for a fresh two-year high as oil prices declined more than $2 in the second day of heavy crude selling. The commodity market expressed some frustration with a lack of stronger stimulus from China and that will be a theme to continue watching in Asia-Pacific trading.
A bigger loser was gold as it fell $60 to the worst since October 10. There is support at the October low of $2601 that’s worth watching in the day ahead. The move isn’t all about growth/rates as yields have been flat since the election. Instead, it might be about China or pricing out the tail risks around a contested US election.