- S&P500 futures jumped, setting a risk-on tone that hurt USD and JPY
- EURGBP rose to the highest point since Nov 17 as UK-EU Brexit negotiations proceeding ambiguously
- China’s November manufacturing PMI rose to 52.1%, a 0.7% increase from last month, signaling an accelerated pace on the economic recovery in APAC region
Trading volume was light following the U.S Thanksgiving holidays, but investors’ appetite for risk exposure grew stronger. S&P 500 and Nasdaq Composite closed at record highs and the market seemed to have turned on the risk mode. S&P500 futures also jumped at the open, signaling to a strong upbeat potential as liquidity quickly rebuilds after the holiday rest. This movement, however, has hurt the anti-risk USD and JPY. Both currencies are on the defensive side against their rising FX counterparts, including AUD and NZD who are narrowly outperforming.
UK-EU Brexit negotiations are ongoing without a clear direction. Among the ambiguity, the negotiation has driven GBP lower against EUR, with EURGBP reaching its highest point since November 17. Chances for an ambiguous agreement is still high, but investors are still keeping a close eye on it at least before the December deadline.
China has released its November manufacturing PMI data today, which rose to 52.1%, a 0.7% increase from last month. So far it has stayed above the critical level of 51% for 9 months consecutively. The pace of activity growth in the manufacturing sector seems to have accelerated not just in China but the wider APAC region. The upside sentiment echoing recent outperformance from the equity market may stimulate the risk appetite further.
Afterwards in this week, market will focus on an RBA interest rate decision, Australia’s Q3 GDP, Eurozone and Germany’s inflation and unemployment data, the manufacturing PMI from the U.S., and, finally the biggest to watch, the U.S. non-farm payrolls report, which is expected to cross the wires.