The ‘Santa Claus Rally’ appears to have arrived, with US equities defying the latest virus mutation and heading for record highs. The media panic over the virus has worn thin and investors are voting with their wallets. US Durable Goods Orders rose 2.5%, while the University of Michigan Economic Sentiment came in higher than expected. The PCE inflation gauge, which the Fed watches closely as an inflation indicator, came in slightly higher at 5.7%. This was expected and did not frighten the proverbial pants off markets. The Dollar remains soft, with the EUR trading 1.1330, while the GBP pushed up above 1.3400.
The improved market sentiment was a boon for commodity demand and a boost for the associated currencies. The AUD pushed up to 0.7240, while the NZD consolidated above 0.6800. The rally into Christmas is on low volume and the season spirits. Reality, in the form of inflation and growth, will strike home in the New Year.
Have a wonderful Christmas enjoy the festivities!