As expected we saw relatively muted markets yesterday as the Thanksgiving holiday in the US led to quiet trading conditions. Stocks fell in the European time zone and Asian markets look set to follow their lead on this mornings open. Currencies mainly traded in recent ranges with the exception of the sterling which jumped higher on positive Brexit news that a draft deal is close to agreement, cable rallied over a big figure and EurGbp dropped 70 pips on the news. Oil continues to trade at lower levels with WTI currently under $54/b and Brent under $63, reports out of Saudi Arabia that production had hit record levels helped to keep the price under pressure during the trading day.
Markets are set for another muted trading day today as most Americans extend the Thanksgiving holiday into the weekend, however investor concern over next weeks pending meeting between President’s Trump and Xi will continue to affect direction. Most of the recent comments from the US seem to point to an escalation in trade tension rather than an agreement between the two super powers that would have helped the global growth situation and this is weighing on markets. Investors will continue to monitor that situation very closely as we move into the weekend with optimists hoping that some of the recent statements are part of the US’s negotiating tactics ahead of the G20. Certainly we’re poised for more volatility in overall sentiment as the meeting approaches and at the moment downside moves seem much more likely than any strong push to recovery.
Looking ahead to today’s trading day and although the US markets are officially back open most market participants in the states will be away from their offices and this should lead to another relatively subdued session. Japan is on holiday today which won’t help price action in the Asian session and there’s little in the way of fundamental data releases, however things should liven up as the European session begins with a raft of manufacturing PMI numbers due for release. Investors will be looking for further developments on the Brexit situation after yesterday’s positive news with sterling traders poised for more volatility in the currency. There should be a bit more action in the North American session as the US markets open and traders will focus on Canada early in the day with the release of the latest monthly CPI and Retail Sales numbers.