The Morning Update

The USD is flat, oil prices are strengthening, equity markets are up, and US yields are mixed as markets end a volatile November. The dollar is heading for its worst week since July as markets ramp up expectations for a December Fed rate cut, with futures now pricing an 87% probability of a 25-basis-point move. Thin liquidity due to the U.S. Thanksgiving holiday has exaggerated recent price action, while a brief CME trading outage added to a subdued tone. Recent dovish comments from Fed officials, including John Williams, have strengthened the conviction that easing is coming, putting sustained pressure on the greenback. Global equities are mostly higher today, supported by improving risk sentiment and firm expectations of a December Fed rate cut. Asian markets posted modest gains, while European stocks were little changed but remain broadly supported by the recent rebound. Overall trading is cautious given thin U.S. holiday liquidity and lingering uncertainty from the CME outage, but the market tone remains positive. A data centre failure halted futures and options trading on the CME, disrupting activity across equity, FX, bond, and commodity markets and leaving traders effectively “flying blind.” As liquidity dried up and price discovery was impaired, markets exhibited erratic movements as participants moved to alternative platforms while awaiting a resolution. Elsewhere, oil and gold prices are firmer, supported by improved risk sentiment and ongoing expectations of U.S. rate cuts. Bitcoin, meanwhile, is steady below $92,000 after a volatile month, showing little momentum in either direction. Another quiet economic calendar, with no US releases, so focus will be on the CAD GDP and German inflation reports to help guide the currency markets today.

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In the news. CME halts futures trading after 'cooling issue' at data centre. The Indian economy grows at a faster-than-expected 8.2% in the September quarter, even as tariffs bite. Belgium says using frozen Russian assets to fund Ukraine will endanger a peace deal. Indonesia resists US trade deal 'poison pill'. Canada agrees to a new pipeline project to bolster oil exports to Asia. Canadian minister Guilbeault resigns from cabinet over the government's deal with Alberta. The TSX posts its fifth straight day of gains ahead of key economic data. Eurozone inflation remains on a benign path, easing the need for a rate cut. China's market rattled as Vanke revives property crisis fears.

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In currency markets. The New Zealand dollar is weaker as markets take profit following its recent rally and refocus on a softer domestic outlook. The Indian rupee has also slipped, with investors overlooking strong GDP data due to persistent concerns over tariffs, a widening trade deficit, and U.S.–India trade uncertainty, pushing USD/INR toward record highs. CNY is flat, while Asian currencies eased 0.1% on average against the USD. Trading currencies comes under pressure, with PLN weakening 0.6%, NZD & CZK falling 0.4%. CHF, SEK & DKK easing 0.3%. AUD & KWD down 0.15%. ZAR, NOK, MXN & JPY are flat against the USD.

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‍In commodity markets. Oil prices gained 0.7%. Natural Gas prices strengthened by 2%. Gold and Coffee prices are up 0.5%. Silver prices rallied 1.7%. Copper prices weakened by 1%, while Soybean and Wheat prices are unchanged.

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CAD eased in early trading, slipping back toward 1.405 after briefly touching an eight-day high on Thursday. Momentum has faded despite support from firmer oil prices and a sharply improved current account balance, with markets quiet following the U.S. Thanksgiving holiday. Attention now turns to today’s Canadian GDP release, where economists expect a 0.5% annualized rebound in Q3—just enough to avoid a technical recession—which could offer the loonie some short-term support if the data beats expectations.

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EURCAD remains under pressure as the euro softens and the Canadian dollar finds support from firmer oil prices and improving domestic fundamentals. Traders are now looking ahead to Germany’s CPI release and Canada’s GDP report, both of which could provide fresh direction for the pair.

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EUR continues under pressure after softer-than-expected German data weighs on the euro and triggers a pullback from the week’s highs. The pair is drifting toward 1.1550 after German retail sales unexpectedly declined and broader Eurozone figures failed to inspire, even as EUR/USD still holds a modest weekly gain thanks to sustained Fed rate-cut expectations. With U.S. markets shutting early for Black Friday and liquidity thin, traders are watching Germany’s CPI release for short-term direction, though month-end flows may ultimately drive price action into the weekend.

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GBPEUR is a touch higher as the euro weakens following softer German data, with traders looking ahead to upcoming German inflation figures for the next cue. Sterling’s gains remain modest as markets digest the UK budget and weigh rising expectations of a potential BoE rate cut, keeping the pair contained within a tight range.

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GBP eases in early trading, though it remains on track for its best week in more than three months following a broadly welcomed UK budget that delivered fiscal discipline and a larger buffer than expected. GBP/USD is drifting back toward 1.3200 as mild dollar strength and caution over the UK’s weak growth outlook cap further gains. Markets are now weighing expectations of a December BoE rate cut, which is likely to limit sterling’s upside despite this week’s relief-driven rally.