The Morning Update

The USD holds steady, oil prices are flat, equity markets are up, and US yields are mixed as optimism over a US rate cut spurs markets. The dollar is steady as markets grow more confident that the Federal Reserve will cut rates soon, supported by recent dovish commentary and softening economic signals. Traders are now focused on upcoming U.S. data releases—including durable goods orders and initial jobless claims—which could shape expectations heading into December. With the Thanksgiving holiday creating lighter liquidity ahead of the US markets' closure on Thursday. Global markets are firmer, with equities extending their rebound amid rising expectations for a December Federal Reserve rate cut, which continues to bolster risk appetite. US stock futures are higher ahead of the Thanksgiving break, positioning the S&P 500 to build on its recent three-day rally as traders lean into a more accommodative policy outlook. Dovish remarks from multiple Fed officials — alongside growing confidence that a new Trump-aligned Fed chair would support lower rates — have strengthened market conviction that easing is coming, helping sustain momentum across global indices. Elsewhere, oil prices are flat overall but have rebounded from one-month lows as markets reassess supply risks and geopolitical developments. Gold has climbed to a two-week high, supported by rising expectations of a U.S. rate cut and softer Treasury yields. Bitcoin is trading lower amid a shift in risk appetite toward safer assets and away from cryptocurrencies. In focus today, the UK Budget Report, US Durable Goods, Initial Jobless Claims, and ECB President Lagarde's speech will help drive intraday direction.

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In the news. Trump sends top envoy to Russia to finalize the US peace plan for Ukraine. Poland plans drone fleet to shield railway from sabotage attacks. Grim retail sales data fuels concerns about the health of the economy. China leapfrogs the US in the market for 'open' AI models. Taiwan to spend $40 bn on weapons to counter China. The TSX climbs to a record high as investors bet on a rosier economic outlook. Carney to announce measures to protect the steel and softwood lumber industries. Eurozone banks should prepare for the risk of a dollar squeeze, ECB says. SoftBank's 40% slide from peak shows worry over giant OpenAI bet. Hassett emerges as the frontrunner in Trump Fed Chair audition.

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In currency markets. The yen remains under pressure, trading near recent lows as intervention risk from Tokyo helps limit but not reverse its downward trend. The New Zealand dollar is firmer, rallying after the RBNZ signalled a more cautious stance on further easing, prompting markets to scale back expectations of additional rate cuts. The South African rand is also stronger, supported by softer U.S. data and improving broader risk sentiment. CNY up 0.1%, while Asian currencies on average rise 0.25% against the USD. Trading currencies are mixed, with JPY, KWD, PLN & CZK falling 0.2%, MXN, NOK, and DKK flat, CHF up 0.2%, AUD strengthens 0.35%, and NZD rallies 0.8% against the USD.

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In commodity markets. Oil prices are flat. Natural Gas prices gained 1.3%. Gold prices firmed 0.4%. Silver prices rallied 2.2%. Copper prices strengthened 1.9% Coffee prices weakened 1%, while Soybean and Wheat prices eased 0.15%.

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CAD edged higher in early trading, supported by a modest bounce in oil prices off one-month lows after yesterday’s sharp decline. Market focus now turns to upcoming U.S. data releases, which are likely to drive short-term direction for USD/CAD ahead of the holiday-thinned liquidity around Thanksgiving. Canada’s current account figures due Thursday will also be closely watched for domestic guidance, particularly as positioning remains heavily net-short CAD.

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EURCAD holds steady in quiet trading, with neither currency seeing a clear driver in the absence of meaningful economic data from the eurozone or Canada. Market attention is firmly on today’s comments from ECB President Lagarde, which are expected to provide the next directional cue for the pair.

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EUR is steady above 1.1550 as traders await key U.S. data, with the pair holding near weekly highs on strong expectations of a December Fed rate cut. Markets are now pricing over an 80% probability of a 25-basis-point cut, keeping the dollar on the back foot after softer labour indicators. With durable goods and jobless claims due later today ahead of the Thanksgiving break, the euro continues to consolidate gains with a slight upward bias.

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EURCAD is sidelined as markets await the UK Budget, with traders reluctant to take new positions ahead of key fiscal details. Attention is also on today’s comments from ECB President Lagarde, which could influence the euro's direction if she signals any shift in policy tone. With both events in focus, the pair is likely to remain range-bound until fresh guidance emerges.

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GBP is flat below 1.3200 as traders avoid taking new positions ahead of today’s UK Autumn Budget, keeping volatility subdued. Markets are on edge as expectations build that Chancellor Rachel Reeves will need to outline tens of billions in savings or revenue measures to meet fiscal rules, with reports suggesting the OBR may downgrade medium-term growth forecasts and widen the projected deficit. Weak UK data and rising expectations of a December BoE rate cut continue to offset support from a softer U.S. dollar, limiting any upside for sterling. With both the Budget and key U.S. data due later today, the pair is likely to remain range-bound until fresh catalysts emerge, as investors await clarity on how the fiscal plan may affect growth, inflation and future monetary policy.