On Wall Street, markets were choppy as traders were looking into the Thanksgiving period. On the fixed income/equities front, participants should pay attention to the US yield curve dynamics as it keeps dominating the price action with the rise in US yields weighing on large-cap tech names, undermining the broader market sentiment.
Worth noting that the US Dollar longs accelerating due to year-end demand by global participants rising in the short-term US yields amid recent risk-off flows due to the rise in COVID cases in Europe. Asian traders should pay close attention to the rate-sensitive Yen. Traders are also expecting a stronger dollar next year as the Fed lift-off approaches with recent hawkish rhetoric from Fed Waller and Clarida, stating that an accelerated pace of the tapering will be a theme for the next FOMC meeting as inflation pressures are on the rise.
Focus turns to a plethora of US data tomorrow ahead of the FOMC Minutes. Liquidity will likely be thin for the session ahead as markets head for a holiday over the Thanksgiving period. Energy traders will be watching if China will do more on oil reserve release as US President Biden calls for a global action on oil reserves to ease fuel prices ahead of the OPEC meeting next week.
