Dollar gains traction after PCE release; Safe havens plummet
Despite its weakness early in the session, the stronger-than-expected PCE inflation print enabled the greenback to pare a significant part of its losses. Specifically, the US annual Core PCE inflation rose to 4.7% in November versus the 4.5% projections, boosting bets for a possible Fed rate hike in March. However, the surging risk appetite in the markets seem to be weighing heavily on the dollar’s prospects, limiting its upside potential.
Moreover, the Swiss franc and Japanese yen are getting hammered today as the improving risk tone poses a threat to their safe haven appeal . On the other hand, commodity-linked currencies saw their early-session gains evaporate after the dollar bounced back.
The British pound is the biggest winner in the forex spectrum today as UK President Boris Johnson ruled out the imposition of any further restrictions in the upcoming holiday period, while the euro is giving up ground as more and more countries in the Eurozone seem ready to adopt further Covid-19-related measures.
Stocks extend their year-end rally amid surging risk appetite
Wall Street is set to open higher and resume this week’s rally as optimism over the pandemic front keeps soaring. More specifically, e-mini futures for the major US indices are trading higher in premarket trade, with Dow Jones and S&P 500 futures being 0.35% up in the session, while Nasdaq futures are trading 0.25% higher. Furthermore, most major European stock markets are also following up yesterday’s rise in today’s session.
Oil slightly higher; gold steadies; natural gas plummets
Oil prices surged earlier today as an increasing number of reports came out suggesting that the Omicron variant is less deadly than Delta, but the black gold’s gains were trimmed later in the session on fears of yet further travel and self-distancing restrictions. In contrast, natural gas futures are getting hammered, with profit-taking probably being the main factor behind this move.
Gold prices remain unchanged today as the precious metal grapples with opposite directional forces. On the one hand, rising Treasury yields alongside improving risk tone in the markets pose a threat to the bullion’s prospects, while the greenback’s broader retreat and inflationary pressures are pushing gold higher.
