Articles

• Stock Market Wrap-Up: Tech Sector Tumbles, Dow Hangs On
• WSJ: Trump leaning toward Kevin Warsh or Kevin Hassett to lead the Fed
• Crude oil settling lower by 0.28%
• European indices close lower but not bad relatively speaking
• Tech Wreck: Stocks continue to tumble with the NASDAQ now down -1.78%
• Fed’s Hammack: Balancing both sides of the Fed mandate is challenging.
• Goolsbee wants to wait. Cannot assume the current inflation will be transitory
• Fed’s Schmid Explains Dissent: “Inflation is Too Hot”
• FX technical outlook: EURUSD, USDJPY, GBPUSD set the tone into the North American session
• Fed Divided: Goolsbee Dissents on Rate Cut While Paulson Eyes Job Risks
• investingLive European FX news wrap: UK GDP misses, Gold extends gains

The currency markets finished the week on a mixed note. While the US Dollar found support against risk-sensitive currencies like the Australian and New Zealand Dollars—mirroring the sell-off in the Nasdaq—it struggled to gain ground against the Euro and Canadian Dollar. The greenback’s performance reflects a market caught between “safe-haven” flows and specific regional strength.

Closing Levels

• EUR/USD: 1.1740 (+0.02%) – The Euro managed a marginal gain against the dollar.

• USD/JPY: 155.82 (+0.16%) – The pair pushed higher, with the dollar showing strength against the Yen.

• GBP/USD: 1.3363 (-0.17%) – The Pound was one of the day’s underperformers, sliding back below the 1.34 handle.

• USD/CHF: 0.7958 (+0.09%) – The dollar gained slightly against the Swiss Franc.

• USD/CAD: 1.3767 (-0.01%) – The Loonie held its ground, outperforming most peers likely due to robust Canadian economic data released earlier in the day.

• AUD/USD: 0.6649 (-0.20%) – The Aussie was hit by the broader “risk-off” sentiment.

• NZD/USD: 0.5802 (-0.10%) – The Kiwi followed the Aussie lower.

Key Market Drivers in the forex today.

1. Canadian Dollar Resilience (USD/CAD)
The Canadian Dollar was a standout performer relative to other commodity currencies. While oil prices struggled, the Loonie was supported by a slew of strong domestic data.

• Building Permits: Surged +14.9% in October, smashing expectations.

• Capacity Utilization: Rose to 78.5% in Q3, signaling a tightening industrial sector.

• Wholesale Trade: Posted a +0.1% gain versus a forecasted decline.

2. Risk-Off Flows Hit Antipodeans (AUD & NZD)
The Australian and New Zealand Dollars were the weakest majors on the day, down 0.20% and 0.10% respectively. These “high-beta” currencies often act as a liquid proxy for global risk sentiment. With the Nasdaq tumbling -1.69% and the S&P 500 down -1.07%, investors rotated out of these growth-linked currencies.

3. Dollar/Yen (USD/JPY) Firmness
Despite the drop in US equity markets (which typically strengthens the Yen), USD/JPY rose 0.16% to 155.82. The pair remains sensitive to the divergence between the Federal Reserve’s recent cut and the Bank of Japan’s slow-moving policy normalization.

US Bond Yields : Rising Across the Curve

Treasury yields are moving higher today, retracing the declines seen earlier in the week. The selling pressure has pushed yields up across the board, with the long end of the curve leading the move. Notably, the 30-year yield has climbed to its highest level since early September, driven by the market digesting a massive influx of supply—over $602 billion in Treasuries were sold this week—and reassessing the Federal Reserve’s policy outlook following Wednesday’s cut.

Current Yield Levels:

• 2-Year Yield: 3.545% (up +1.5 basis points)

• 5-Year Yield: 3.743% (up +2.8 basis points)

• 10-Year Yield: 4.178% (up +3.7 basis points)

• 30-Year Yield: 4.831% (up +4.2 basis points).

For the weeK, despite the Fed cut, the 2 year was the only one to see lower yields this week. :

• 2-Year Yield: -4.0 basis points

• 5-Year Yield: +2.7 basis points

• 10-Year Yield: +4.7 basis points

• 30-Year Yield: 5.6 basis points

Fed officials were open to speak after the black-out period expired. Speaking were Fed’s Hammack (non-voting member but hawk), Chicago Fed Pres. Goolsbee who dissented to no change, and Cleveland Pres. Schmid who also dissented to no change. Below is a summary of their comments:

Cleveland Fed President Beth Hammack

President Hammack, who will become a voting member in 2026, aligned herself with the hawkish dissenters despite not casting a vote at this meeting. She emphasized the difficulty of the current economic moment, noting that while the labor market has been “gradually cooling,” inflation remains stubbornly above the Fed’s target. Her comments suggest she would have preferred to keep rates unchanged to ensure price stability is fully restored.

• Balancing Act: Stated that balancing both sides of the Fed’s mandate (maximum employment and price stability) is currently “challenging.”

• Inflation Focus: Highlighted that inflation remains above target, justifying her alignment with the “no change” camp.

• Future Voter: Positioned herself as a hawkish voice heading into her voting rotation next year.

Kansas City Fed President Jeffrey Schmid

President Schmid was one of the two officials who dissented in favor of keeping rates unchanged. He argued that the economy still has significant momentum and that the labor market appears to be in balance rather than deteriorating. His primary concern is that inflation is “too hot” and that current monetary policy may be only “modestly restrictive,” if at all, which risks undermining the Fed’s hard-won credibility on inflation.

• Policy Effectiveness: Questioned whether current rates are actually restrictive enough to bring inflation down effectively.

• Inflation Warning: Stated explicitly that “inflation is too hot” and warned policymakers not to become complacent about maintaining credibility.

• Economic Resilience: Observed that the economy is showing momentum and the job market seems largely in balance, countering the need for immediate cuts.

Chicago Fed President Austan Goolsbee

President Goolsbee, typically known for more dovish views, dissented in favor of a “pause” to wait for more data. He expressed discomfort with “front-loading” rate cuts when inflation has stalled above target for years. Goolsbee argued that waiting until the first quarter of the year would have provided the necessary assurance that inflation was truly on a downward path without risking significant harm to a labor market he describes as stable.

• Patience on Cuts: Argued that waiting until Q1 would allow the Fed to be “assured inflation is coming down” rather than assuming current pressures are transitory.

• Labor Market Stability: Noted that the “low hiring and low firing” dynamic does not suggest a cyclical downturn, meaning there was no urgent need to cut to save jobs.

• Inflation Persistence: Highlighted concerning services inflation and emphasized that one cannot ignore that prices have been rising for four years.

For technical views on the major currency pairs going into the new week:

• USDJPY:
• AUDUSD:
• NZDUSD:
• USDCHF:
• USDCAD:
• EURUSD and GBPUSD:

Wrap the week up and put a bow on it.

Thank you for your support this week.

This article was written by Greg Michalowski at investinglive.com.

Weekly Price Action

Crude oil futures settled the week on a soft note, closing at $57.44, down $0.16 or -0.28% for the day. For the week, the commodity saw significant selling pressure:

• Weekly Change: Down -4.54%, a decline of $3.12.

• The Highs: The week’s high was reached on Monday at $60.30.

• The Lows: Sellers pushed the price to a weekly low of $57.01 during Thursday’s trade.

The Fundamental Story

The sharp 4.5% drop this week was driven by a “perfect storm” of bearish supply data and easing geopolitical risk premiums that overpowered localized disruptions.

• The Supply Glut Narrative: The primary weight on prices this week was the growing consensus of a massive supply surplus heading into 2026. The International Energy Agency (IEA) released a report forecasting a record oil glut for next year, driven by surging production from non-OPEC nations (like the U.S. and Canada) outpacing global demand.

• Geopolitical Risk Fade (Ukraine): Traders began removing the “war premium” from oil prices as peace talks regarding Ukraine gained traction. Reports that the White House is sending a representative to Europe for negotiations signaled a potential de-escalation, which reduced the fear of sudden supply shocks from the region.

• Production Restorations: Adding to the bearish supply picture, Iraq successfully restored production at a key oilfield that accounts for roughly 0.5% of global supply, further easing tightness in the physical market.

• Limited Support from Disruptions: There were bullish factors, but they failed to turn the tide. The U.S. seized a Venezuelan oil tanker, and Ukraine struck another vessel in Russia’s “shadow fleet,” but market participants largely ignored these supply threats, focusing instead on the broader macro picture of oversupply.

Technical Analysis: Testing Critical Support

The price action is currently testing a critical floor on the hourly chart, focusing on a low swing area between $57.10 and $57.39. This zone is now the “line in the sand” for near-term direction.

The Bearish Scenario (Breakdown):

• Trigger: Getting and staying below the $57.10 – $57.39 support zone would significantly increase the bearish bias.

• Target: A confirmed break here would have traders looking toward the October low at $55.96 as the next major downside objective.

The Bullish Scenario (Hold & Bounce):

• Trigger: If the price can hold support in this swing area, buyers may look to rotate back higher.

• Target: The immediate upside target is $58.13.

• Key Resistance: Traders must also watch the falling 100-hour moving average, currently at $58.28, which is moving quickly toward that $58.13 level and will act as a stiff ceiling for any recovery.

This article was written by Greg Michalowski at investinglive.com.

• India’s inflation rate increases to 0.71% in November, but the Rupee continues to bleed
• Interest rate expectations turn more hawkish for most major central banks except the Fed
• Gold extends gains after key technical breakout, putting all-time highs in sight
• Nifty 50 recovers some losses on dovish Powell, but it’s not out of the woods just yet
• The British Pound falls on weaker than expected GDP data sealing the case for a rate cut
• FX option expiries for 12 December 10am New York cut
• What are the main events for today?

It’s been a very light session in terms of data releases and newsflow. The main highlight was the UK GDP which missed expectations and weighed on the pound. Traders added to BoE rate cuts bets, increasing the total easing by the end of 2026 from 57 bps to 61 bps.

We also got the final CPI readings for Germany, France and Spain but there were no surprises there as the data came out in line with the preliminary figures.

The most notable mover in the session was gold. The precious metal continues to rally after yesterday’s key technical breakout, and it’s now getting very close to the all-time high set in October. The fall in real yields following Powell’s dovish tone is a good tailwind.

In other markets, US equities continue to mostly range, while maintainig a bullish bias. The bear-steepening in US Treasuries has resumed after Powell’s press conference, with the 10Y-2Y spread close to breaking the April 2025 highs.

The US dollar recovered some of yesterday’s losses, although it looks more like a technical pullback given the lack of catalysts today. We might even see some pullbacks before the NFP given the expected high volatility.

In the American session, we don’t have anything on the agenda other than a couple of Fed speakers. Wish you all a nice weekend!

This article was written by Giuseppe Dellamotta at investinglive.com.

KEY POINTS:

• India’s inflation rate Y/Y increased to 0.71% vs 0.70% expected in November
• The prior release saw inflation falling to a record low of 0.25%
• The RBI’s inflation target is 4% with a +/-2% tolerance band
• Inflation remains far below the central bank’s target

INFLATION REPORT:

India’s inflation rate increased to 0.71% in November after falling to 0.25% in October. The Ministry of Statistics and Programme Implementation noted that the increase in headline inflation and food inflation during the month of
November was mainly attributed to increase in inflation of Vegetables,
Egg, Meat and fish, Spices and Fuel and light.

Food makes up the largest share of India’s Consumer Price Index (CPI) basket (typically around 46%). This means that swings in food inflation influence significantly overall inflation. A government review might lower slightly the weight in the upcoming revision in January 2026.

MARKET REACTION:

The INR strengthened a bit following the release but quickly gave back the gains and extended the losses against the US dollar as the USD/INR pair continues to push into new record highs.

Next week, we have the US NFP and CPI reports. Right now, the market is leaning on the dovish side for the Fed, so a surprisingly strong employment report should trigger a hawkish repricing and give the US dollar a boost.

The big picture trend remains heavily skewed to the upside and probably only a major positive breakthrough on the US-India trade front could give the Indian Rupee a strong short-term boost.

This article was written by Giuseppe Dellamotta at investinglive.com.

• Trump on Venezuela: It’s going to be starting on land pretty soon
• Trump: Probably only one winner in AI, China or the USA
• Japan October industrial production +1.5% y/y vs +1.6% prelim
• Canada’s Carney inches closer to a majority as Conservative switches parties
• Magnitude 6.7 earthquake leads to 1m tsunami in Japan
• GPT-5.2 is looking like another leap forward

Markets:

• Gold down $15 to $4267
• US 10-year yields up 1.6 bps to 4.15%
• WTI crude up 44-cents to $58.04
• Nikkei up 0.7%
• GBP leads, JPY lags

Flows were light to wrap up the week in Asia but stocks were lively. The Nikkei gapped higher at the open and continued above 51,000 and a test of the monthly high. It failed though and there was some profit taking as the 1.7% gain was cut in half.

Gold also saw some selling after the big rally in US trade. It’s under some mild pressure while silver is flat after hitting a record earlier.

The FX market was struggling to find a reason to get going during a light day of news flow.

The most-meaningful headline was Trump talking about an escalation to ground attacks in Venezuela. That’s led to some moderate bids in crude but had little effect on the overall risk mood. It’s something to keep an eye on.

This article was written by Adam Button at investinglive.com.

• Prior was +2.0%
• Prelim was +1.6%
• Capacity utilization +3.3% vs +2.5% prelim

Japanese factory data this week has been firm, showing that the trade war isn’t a problem so far.

This article was written by Adam Button at investinglive.com.

An earthquake shook up the Pacific coast of Japan approximately 130 km NE of Kuji.

There is no damage expected but a tsunami warning has been issued.

This article was written by Adam Button at investinglive.com.

The US dollar is down on most fronts this year but it came after years of gains. The team at Scotiabank says don’t get too comfortable with USD longs as the worst is yet to come.

In their Focus On 2026 outlook, Scotia’s Shaun Osborne and Eric Theoret are sticking to their guns: they see broad USD weakness playing out through 2026 and into 2027.

The core thesis here is simple: Divergence.

Scotia expects the Fed to cut rates significantly—taking the target rate down to 3% by the first half of 2026. Meanwhile, other major central banks are expected to make few policy changes or even tighten.

It’s the classic rate differential trade and erodes the two pillars that have held the dollar up for so long: higher relative growth and those juicy yield differentials. We’ve been hearing about the “end of US exceptionalism” for a while, but Scotia thinks the real pain point for the USD hits in Q2/Q3 of 2026 as the US labour market slows down and the Fed stays dovish.

The Euro and Yen: The quiet climbers

For the euro, the ECB is expected to leave rates unchanged, which should boost EUR/USD higher. Scotia is targeting a medium-term move into the 1.22-1.24 range (spot at 1.17).

For the yen, with the BoJ expected to tighten modestly in 2026, the currency finally gets some love. The forecast sends USDJPY down to 140 by late 2026 and 130 by the end of 2027. (spot at 155.68)

The Contrarian Trade: Buy the Loonie

If you’re looking for a non-consensus trade, this is it. The market is overwhelmingly short CAD right now, but Scotia sees a massive reversal incoming.

While the Fed is cutting to 3%, Scotia expects the Bank of Canada to actually start hiking rates in the second half of 2026.

They see the spread between the Fed and the BoC—which is currently a massive 175 bps—collapsing to just 25 bps by the end of next year. As that compression happens, their forecast puts USDCAD to 1.35 by year-end 2026, dropping to 1.30 by 2027. (spot at 1.3775)

Emerging Markets: Caution on the Peso

For the carry traders, the outlook on the Mexican Peso (MXN) is a lot less rosy. Scotiabank is bearish here despite the yield.

Why? Banxico is cutting rates just as volatility is picking up. The narrowing spread with the US, combined with trade uncertainty around the CUSMA review, makes the risk-reward look poor. They see USDMXN grinding higher to 19.00 next year and 20.40 by 2027.

Scotiabank FX Forecasts at a Glance

Here are the key levels they are watching for the majors by December 2026:

• EURUSD: 1.21
• USDCAD: 1.35
• USDJPY: 140
• GBPUSD: 1.38
• USDMXN: 19.00

If Scotia is right, the “higher for longer” US yields trade is dead, and the rotation out of the dollar is the big macro play for 2026.

This article was written by Adam Button at investinglive.com.

Leaked internal benchmarks for GPT-5.2 “Thinking” have been posted by Sam Altman, and quite frankly, the numbers are ridiculous. We aren’t talking about incremental gains here.

For some reference:

• AIME 2025: 100.0%. It solved it. This is a big math test and it means that competition math is effectively “completed” for this model.

• ARC-AGI-2: This is the big one for the AGI purists. It jumped from 17.6% (GPT-5.1) to 52.9%. That is a massive leap in abstract reasoning and generalization—historically the Achilles’ heel of LLMs.

• GDPval (Knowledge Work): This is the metric that matters for the economy. It flew from 38.8% to 70.9%.

It’s also worth noting that this highlights that scaling and reasoning are both advancing as this is a model that uses maximum reasoning efforts. Lately, it looked like OpenAI got caught with its pants down because Gemini scaled and it worked but this shows that reasoning is doing things that looked impossible.

For users, the thinking models aren’t that popular because they’re slow for every day tasks to replace Google but for innovation, this is huge. What the dual-releases show is that both tracks are still working. Ultimately, there will be a ‘best of both’ that unlocks something beyond this.

This is also big for the economy. GDPval tests well-specified knowledge work tasks spanning 44 occupations.

At the moment, this release is being rolled out and we’re going to see if the use cases match the numbers. What we aren’t seeing is what the lesser models do. This release includes 5.2 Thinking but also GPT‑5.2 Instant and Pro.

What OpenAI says:

“Overall, GPT‑5.2 brings significant improvements in general
intelligence, long-context understanding, agentic tool-calling, and
vision—making it better at executing complex, real-world tasks
end-to-end than any previous model.”

That’s exciting but this screenshot is also making the rounds:

This article was written by Adam Button at investinglive.com.

When Mark Carney pulled off an improbable election win this year, he didn’t earn a majority in parliament. That means his government could fall at any time, but he came very close.

The Liberals won 169 seats, just three short of a 172 seat majority. In early November, Conservative MP Chris d’Entremont crossed the floor to join the Liberals. That got them to 170. Just now, Michael Ma (MP for Markham-Unionville) announced that he is switching from the Conservatives to the Liberals.

That gets them to 171, just one seat shy.

There are rumors they are courting others and if they get there, that will give Carney enough votes to survive another three years, at minimum. Even without that, now he just needs the support of one other voter to get any legislation passed.

This move will also raise the stakes in any future by-elections as that could flip the numbers.

This article was written by Adam Button at investinglive.com.

• Will make a signing related to AI
• Forget trying to get approval for 50 different states
• Sacks: Order gives tools to push back on most onerous state regulations
• We are taking steps for a single national standard on AI

The idea of dominance is that AI will be iterative, so the latest generation of AI designs the following one and that also maps to the physical world. I have a hard time believing that it won’t be diffuse as the stakes are so high and the information nearly impossible to protect. Moreover, the world can only accept change so quickly.

At the same time, there is a limit in real world applications. Once a car learns to drive a car, it’s learned. Maybe you can refine it and make it more efficient but in time — and probably not a long time — others catch up. Perhaps you could ‘dominate’ for a time but only if you’re essentially giving it away or using some kind of regulator capture that’s hard to push across borders.

Moreover, I continue to believe that the black swan of this century will be the collapse of the intellectual property system.

This article was written by Adam Button at investinglive.com.

The US is clearly trying to provoke some kind of conflict, if not a war. Trump wants regime change in Venezuela for some reason.

That said, Trump likes to make threats so he could be trying to bluff Maduro into leaving the country.

Yesterday, the US seized an oil tanker carrying Venezuelan crude.

On Ukraine, Trump said he thought they were ‘very close’ to a deal. Again, it’s hard to take what he says literally and get excited about peace in Ukraine or war in Venezuela.

This article was written by Adam Button at investinglive.com.