Markets

Global Markets Update – 12/21/12

Risk assets reversed losses once again driven by headlines regarding the fiscal cliff negotiations. House Speaker John Boehner's pledge to work with President Obama was enough to help improve sentiment. There were also plenty of positive economic releases in the US including a better-than-expected GDP print and existing home sales data. The Philly Fed manufacturing index also topped estimates. However, positive US data can be a double-edged sword these days as it results in markets repricing QE expectations. Following the recent change from a calendar-based threshold to an economic data-related threshold, any positive economic data will result in markets feeling QE won't be needed for as long as initially thought. This tends to be positive on the US dollar and in turn weighs on some risk assets like commodities. Risk currency pairs like AUD/USD and EUR/USD managed to come off their lows on somewhat improved sentiment. EUR/USD came just shy of 1.33 again, while AUD/USD retested 1.5 before both pairs retreated.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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