Opening Bell: Oil, Euro Sell Off; Bitcoin, Gold Rally

by Pinchas Cohen

Key Events

During Friday's final trading session before Christmas, US stocks were mixed on volume that was 25 percent below average. Still, the most widely watched index, the S&P 500, was little changed as a selloff of Health Care (-0.32 percent), Consumer Discretionary (-0.19 percent) and Financial (-0.28 percent) shares was offset by sector gains in Real Estate (+0.65 percent), Materials (+0.38 percent) and Energy (+0.21 percent) stocks.

Global Financial Affairs

Major equity exchanges in Europe and Asia are closed today. The post-Christmas Boxing Day holiday is being celebrated in the UK, Australia, Canada and New Zealand. It's Christmas in Hong Kong and Italy.

TOPIX Daily

This morning, Japan’s TOPIX retreated from its highest levels since the early 1990s, as traders took profits at the end of an exceptionally favorable year, weighing down the MSCI Asia Pacific Index. Shares in Dubai’s DFM General and Russia’s MICEX led the decline.

MICEX prices became expensive when the Russian ruble strengthened, even moreso on a day when international traders are on the hunt for markets that are open, since many major global indices are closed.

UST 10-Y Daily

Treasury yields, including the 10-year note, edged higher today, after Friday's decline. It was he biggest weekly loss for the securities since September as investors contemplated prospects for continued US growth and reduced central bank stimulus. Treasuries stabilized after reports on Friday showed US consumer spending rose more than forecast in November and core PCE held steady, signs of economic vitality that should keep the Fed on track to raise rates in 2018.

WTI Daily

After US drillers refrained from adding rigs for a second week, WTI Crude continues to trade above $58, for now, but oil prices fell this morning, down 0.1 percent at time of writing. Today’s decline—should it continue into the close—will have completed a Bearish Engulfing pattern, after yesterday’s highest close since November 24, the last resistance since June 2015, mirroring the drawdown of US crude stockpiles to their lowest level in more than two years.

BTCUSD Daily

In the aftermath of Friday's heart-stopping, 44 percent intraday plunge, dip buyers are supporting Bitcoin, which found resistance under $15,000. Today's up-move is a second day advance for the cryptocurrency, which pared most of last Friday's losses.

Gold Daily

Gold also rallied, extending its bounce from the December 12, $1,238.30 low, rising 3.5 percent as it struggles with the resistance of a downtrend line since September 8.

EURUSD Daily

The euro is sliding after yesterday’s second-day advance, even as Catalan separatist parties triumphed in regional elections Thursday night, reigniting the political trauma in Spain and diverting focus from Friday's positive eurozone data on French consumer spending, Dutch consumer confidence, and French and Dutch GDP which underscored the region’s health.

The Stoxx Europe 600 Index slipped with Spain’s IBEX 35 leading the declines. The country’s bonds also fell along with peripheral European government debt before recovering, while bunds were little changed after a selloff this past week drove yields to five-week highs.

Up Ahead

• US Consumer Confidence, Pending Home Sales and trade data are on the schedule in the days ahead despite the holiday-shortened week.
• Italy’s parliament is expected to be dissolved ahead of elections in 2018.
• Rate decisions this week include central bank announcements from Argentina and Egypt.

Market Moves

Stocks

• The MSCI All-Country World Equity Index climbed less than 0.05 percent as of 8:52 London time (3:52 EST) to the highest in more than a week.
• The MSCI Emerging Markets Index declined 0.2 percent, the biggest drop in more than a week.
• S&P 500 Futures increased less than 0.05 percent.
• The MSCI Asia Pacific Index declined 0.2 percent, the biggest drop in more than a week.

Currencies

• The Dollar Index is flat at 93.27, yesterday’s closing price.
• The euro decreased less than 0.05 percent to $1.1869.
• The British pound increased less than 0.05 percent to $1.3373.
• South Africa’s rand rose 0.4 percent to 12.5659 per dollar, the strongest for the currency in nine months.
• The Russian ruble jumped 0.5 percent to 57.7311 per dollar, hitting the strongest in two months with its eighth consecutive advance.

Bonds

• The yield on 10-year Treasuries climbed less than one basis point to 2.48 percent.

Commodities

• Gold increased 0.2 percent to $1,278.10 an ounce, hitting the highest in more than three weeks, its fifth consecutive advance.
• West Texas Intermediate crude decreased 0.1 percent to $58.40 a barrel, the first retreat for the commodity in more than a week.
• Silver gained 0.6 percent to $16.42 per ounce, the highest in more than three weeks.