Well, what can you say? Things started off on a high note again thanks to Asia – Europe sputtered – there was a dearth of human beings at the office in the U.S. ahead of the holiday.
U.S. stocks were (mostly) flat, but the Nasdaq did manage to extend its record high, because why the fuck not, right?
You could have traded if you wanted to. The October durable goods print was bad although as usual, you can argue about what lies beneath the headline. That added to the pressure on the dollar, which was already weighed down by comments Yellen made on Tuesday at an NYU panel discussion with Mervyn King. Basically, she came across as concerned about inflation. Then came the minutes which were dovish. You can parse the release all you want, but here are the four main takeaways:
- A few participants cautioned that further increases in the target range for the federal funds rate while inflation remained persistently below 2 percent could unduly depress inflation expectations or lead the public to question the Committee’s commitment to its longer-run inflation objective.
- Readings continuing to surprise on the downside, however, many participants observed that there was some likelihood that inflation might remain below 2 percent for longer than they currently expected
- In light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial imbalances.
- They worried that a sharp reversal in asset prices could have damaging effects on the economy.
Needless to say, all of the above conspired to push the dollar notably lower:
Ultimately, the greenback is sitting at its lowest level since October 20:
Given all of that, you can probably surmise what Treasurys and gold did:
For fun… since the election:
In the UK, the autumn budget was GBP negative at first, but the dollar’s decline helped cable bounce:
European shares fell into the close and if you’re curious as to why, look no further than the euro, which of course rallied against the dollar:
Keystone news, falling stockpiles (although the draw was smaller than expected), OPEC speculation, and the dollar helped crude, which jumped sharply on Wednesday and is at a 2 1/2-year high. Still, curb your enthusiasm. “The U.S. is struggling to clear the oil glut, despite huge export flows doing their best to ship away the crude and oil refined products problem,” Bloomberg’s Javier Blas wrote this morning, adding that “U.S. crude production is steadily increasing — and that problem will exacerbate in weeks to come as plus-$55 a barrel WTI help shale producers.”
Meanwhile, the MSCI emerging markets currency index hit its strongest level in two months and EM equities are now at a new six-year high, having left that five-day skid in the rearview:
Asian equities inched past all-time highs overnight:
And the Hang Seng is above 30,000 for the first time since 2007:
Now go get drunk and pick a fight with your relatives…