Markets have been volatile over the past weeks as markets digest Omicron, an increasingly hawkish Fed, and worries over inflation.
Overview
However, there is relative calm in markets today. Liquidity and volumes have decreased and are likely to continue that trend as traders head home for the holidays. Much of Europe and the world are closed on Friday.The dollar was steady this morning ahead of the third reading of Q3 GDP. GDP was revised slightly upwards to 2.3% compared to the second reading of 2.1%. Economists expected the reading to hold at 2.1%, so the modest upward surprise is welcome. The greenback has shrugged off the positive print and is unchanged in the minutes following the release. Later, the Conference Board’s consumer confidence number and existing home sales data will be released. Outside of the fundamental data, we will look for developments in Washington and the possibility that the President’s agenda will be given new life. Risk sentiment is, of course, sensitive to any Omicron and government intervention headlines.
What to Watch Today…
- Existing Home Sales at 10 a.m.
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JPY
The safe-haven Japanese yen is weaker again today and is now at a one-month low. While American futures show U.S. stocks will be largely unchanged today, risk sentiment remains elevated in Asia. The Nikkei and the Hang Seng are up 0.2% and 0.6%, respectively. As global equities broke all-time highs throughout the year, the Japanese yen has fallen dramatically. The Yen is down 9.57% versus the U.S. dollar year-to-date. The Swedish krona is the only G10 currency to fair worse in 2021.
GBP
The beleaguered pound sterling had reason to rise today. GBP/USD is up for the second straight day and is now at its strongest level since, checks notes, last Friday.
The pound edged higher on the back of revised data that showed the U.K. economy has recovered from the pandemic faster than previously reported. The Office of National Statistics said gross domestic product is now 1.5% smaller than the end of 2019, better than the previous estimate of a 2.1% shortfall.
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