STATE OF THE MARKETS
Thin markets amid US Thanksgiving Day . With the US markets closed on Thursday for Thanksgiving Day, markets were left thin with only Europe, Tokyo and Sydney trading. Equities markets closed mixed with Nikkei (-0.09%) down while FTSE UK (+0.02%) up as investors continue to scoop higher yielding bonds to protect capital. The UK 10Y yielded +0.03% higher to 3.04% while the Australian 10Y climbed 0.04% to 3.60% as London closed. The Dollar index continued to stall around the 105.80 barrier in early Asian’s Friday trading.
In the commodities market, crude was thinly traded between $78.20 – $76.90/bl while same fate for gold in the $1,758.50 – $1,748.85/oz range as markets look for new catalysts. Weaker Dollar amid plan for slower pace of rate hikes from the Federal Reserve helped buoy iron ore near the $92/tn handle.
In the FX space, short term traders continue to bid Aussie and Yen, while switching Euro and Loonie to demand’s territories as Sterling and Kiwi were sent to supply’s. Medium and long term outlook was little changed.
On Friday, investors may look to scoop some bargains in equities after the Fed’s signaled that rate increases will be slower. No earnings or economic data are scheduled for Friday other than the Fed’s balance sheet.
OUR PICK – No New Picks
No new picks going into the weekend. Markets are now pricing Dollar for 75% probability of another 50 points hike in December, lower than 80% as of last Friday. Probability of a 75 point hike has increased from 19% to 24% as markets continue to weigh economic data and look towards the latest GDP and employment situation next week. Any upbeat data we see, would support the Dollar higher as the Feds plan to slow the pace of rate hikes.
Trades updates:
Equities: WBA (17% undervalued, 4.60% yields), SQ (about fairly valued with 4.96 z-score), T (10% undervalued, 5.81% yields), CRON (31% undervalued with 23.21 z-score), AUY (13% undervalued, 2.25% yields), M (43% undervalued, 2.69% yields) and VIPS (38% undervalued with 3.92 z-score) all climbed higher this week after the Fed’s minutes revealed a plan for slower rate hikes.
FX & Commodities: Crude oil was stopped out while NZD/USD stopped at breakeven.
Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.