In terms of Fed rate-cut expectations, we have seen a moderate hawkish repricing, with 13 bps of easing implied (a 55% chance of a rate cut), and a total of 80 bps worth of cuts by the end of 2026.
Market Snapshot
In the markets, as you would expect, US Stocks caught a bid. Cash markets saw the Dow Jones Industrial Average rally more than 300 points to notch a fresh all-time high of 48,254.82, or 0.7%. It was a quiet session for the S&P 500, which largely flatlined, with the Nasdaq actually shedding around 0.3%. However, US equity index futures are moderately on the front foot this morning.
Meanwhile, precious metals rallied. Spot Gold extended gains for a fourth consecutive session, adding 1.7% and is fast closing in on the all-time high of US$4,381. Spot Silver also rallied 4.0% and is on the doorstep of challenging record highs of US$54.45. Oil prices, however, took a sizeable hit – WTI Oil down more than 4.0% – after OPEC noted supply is expected to begin outpacing demand.
In the FX space, the USD ended the session largely unchanged, albeit considerably off its best levels. Ultimately, although the JPY was sold into (USD/JPY up 0.4%), it was quiet across currencies.
I do want to shine some of the spotlight on the AUD, nevertheless, which remains higher versus G10 peers following an upside surprise in the October Aussie jobs report. Employment surged by 42,200, comfortably beating the 20,000 consensus, while unemployment came in at 4.3%, down from the expected 4.5% in September. The AUD/NZD cross (see below) offered a short-term scalping opportunity to enter long out of the event on the M5 chart; you may recall that I noted this market to watch closely in the event data printed at max/min estimates, which it did.
