General Market Analysis 21/11/2023

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Stocks Soar and Dollar Crashes – Nasdaq up over 1% again

US stock indices climbed again and the dollar hit multi-month lows as last weeks trends took off again in earnest on the first day of trading for the week. The Nasdaq surged as Microsoft shares hit record highs, the index closing up 1.13%, the S&P added another 0.74% and the Dow rose 0.58%. The dollar was hit again, as markets have priced out the chance of a rate hike in December, the index dropping 0.42% to hit its lowest level since the start of September. Oil gained back more ground again with Brent pushing up 2.1% and Gold continued to trade in familiar ranges, now around the $1,980 mark.

Investors Hope the Trend Remains their Friend

The week kicked off nicely for investors yesterday and last week’s trend continued to reap rewards and stock markets powered higher. The market is now pricing in just a 2.4% chance that the Federal Reserve Bank will raise rates in December and only 4.4% for January, with bets for next March’s meeting now sitting at 27.7% of a 25-basis point rate cut. This has been a dramatic turn around in expectation from even a month ago, and the market has jumped on perceived improving conditions and whilst the trend is moving in that direction, investors are more than happy to go with it. As always there could be some storm clouds on the horizon if data or the Fed put the brakes on, but for the time being traders are looking for levels to buy risk assets.

Busier Calendar Day Ahead for Traders

It was a good day for risk trades yesterday and investors will be hoping for more of the sames today, although the calendar has more risk events on it today. The Asian session starts off with the focus on the Australian market as very early in the piece we hear from Reserve Bank of Australia Governor Michelle Bullock before we then have the release of the RBA’s Monetary Policy Meeting minutes. The European session is quiet on the calendar again, but the New York day see’s the key Canadian CPI numbers released early on before focus moves back to the US for the FOMC’s Meeting Minutes towards the end of the session – given recent market moves, investors will be hoping for a more dovish leaning from them to keep the positive momentum.