Market Pressured to Move over Next 24 Hours

  • Trade to lighten up into Thanksgiving
  • US GDP could trigger round of volatility
  • Yen still correlated to safe haven flow

AROUND THE CORNER - Just a reminder to all that things are going to lighten up significantly from late Wednesday into the end of week, with the US Thanksgiving Day holiday upon us. While we could still see volatility Thursday, Friday, the volatility will likely come in much thinner trade and could therefor be less reliable. However, any trading over the next 24 hours or so will be more significant, with the market taking in US GDP today and durable goods tomorrow. At the moment, the US Dollar has paused for a bit of a breather, though there is no indication in any meaningful let up of US Dollar longs. The Buck continues to be in the driver's seat and is likely to extend gains pretty much across the board.

THE YEN - Perhaps one exception to this is USDJPY, where we could see the Yen emerge as an outperformer, if risk appetite shows signs of deteriorating later today. While the Yen has been weak on the diverging monetary policy theme, it still shares a healthy correlation with risk flows and as such, if an overextended and overinflated US equity market comes off, look for any positive flow on the anticipated December Fed rate hike to be offset by safe haven flow into the Yen. The key level to pay attention to on Tuesday will be USDJPY 122.20. If the market can break and close below this level, this could set the stage for a more significant liquidation in the days ahead. I am short from 123.55 and will be looking to see if we get follow through.

This will be the final 24 hours of full trade for the week. #Thanksgiving Via @joelkruger

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