- The year is over in most of the Eurozone
- Putin/Biden call ahead
- US dollar remains on defensive
USDCAD Snapshot: Open 1.2789-93, Overnight Range 1.2772-1.2811, close 1.2790, WTI open $75.86, Gold open $1801.24
The Canadian dollar is flirting with resistance after consolidating gains in a choppy overnight session, characterized by poor liquidity. The currency is benefitting from year and month-end portfolio rebalancing demand for Canadian dollars as the S&P 500 is poised to end the month 5.0% higher.
The intraday USDCAD technicals suggest that a decisive move below the 1.2760 area will extend losses to 1.2620.
For many Asia markets, it was the last day of trading. Japan’s Nikkei 225 index finished the year down 0.40% but is 4.9% higher for the year. That pales in comparison to the S&P 50o’s stellar 28.4% performance.
The headlines are about record numbers of COVID-19 cases in the US, which topped 265,000 per day, on Wednesday. The spike has resulted in many event cancellations including the Time Square New Years celebration, but global markets are not overly concerned. They have taken solace from comments by so-called “experts,” including White House Chief Medical Advisor Dr Anthony Fauci that the Omicron variant is less severe than the Delta variant.
US 10-year Treasury yields rallied from 1.474% yesterday to 1.558% before slipping to 1.532% in NY today. The move lit a fire under USDJPY which jumped to 115.20 from 114.60 Wednesday. Analysts belief the rise in Treasury yields is due to month and year end factors.
Russian President Vladimir Putin and President Joe Biden have scheduled a phone call today with Ukraine at the top of the agenda. Russia is vehemently opposed to NATO installing missiles and other weapons in Ukraine, saying it is a threat to Russia. John F Kennedy probably felt the same as Putin in 1962 when Russia planned to install ICBM missiles in Cuba.
The US dollar is on the defensive in early trading, largely due to sell pressures from portfolio rebalancing flows.
Today’s US data includes US weekly jobless claim, which are expected at 205,000 and the Chicago PMI index which is forecast to rise to 62 from 61.8
