Markets:
- Gold up $8 to $2743
- US 10-year yields up 3.6 bps to 4.23%
- WTI crude oil up $1.43 to $71.63
- S&P 500 flat
- USD leads, NZD lags
The mood steadily soured throughout US trade and NZD and AUD finished at the lows. The S&P 500 rose as much as 50 points but gave it all back to finish flat.
There wasn’t a catalyst for the change in mood that saw steady US dollar buying and bond selling. Perhaps it’s angst about the election of something happening in the Middle East on the weekend. It’s the time in the election cycle when there is often a big surprise and nerves are frayed.
The shape of the move was steady and most pairs grinded lower against the dollar, including the uro which slid to 1.0795 from 1.0835.
A winner on the day was gold, which finished at the best levels and climbed $25 from the lows despite the dollar strength. It’s had an impressive run, hit a record high earlier int the week and today’s close will be the best weekly close ever.
Crude also bucked the trend in risk assets, perhaps in a sign of Middle East worries or position squaring. It rose more than $1 in US trading including a curious spike late just before midday.
USD/CAD finished at its highest since early August and the highest weekly close since 2020 in the fourth weekly decline. A series of highs over the past two years stretch up to 1.3975 but those are now within striking distance in what could be a major break.
In contrast, AUD/USD finished at the lowest since August but has 400 pips of breathing room before the post-pandemic lows. That pair could be in focus in the weeks ahead if China delivers on the fiscal side of stimulus or disappoints.