Friday 08:30 GMT.
Overview
Stock markets are cautiously mixed as traders await Wall Street’s return to the fold after the Thanksgiving break. US futures suggest the S&P 500 will be in line for another record, looking to add 1.5 points to 2,206.3 when the opening bell rings later in New York.
Still, for now the underlying equity mood remains bullish, with the dollar easing from 13-year highs but bond yields moving up as investors continue to bet that president-elect Donald Trump’s policies will boost the US economy.
What to watch
Friday’s Wall Street session is just half a day, meaning attendance will be thin and this should have implications for volumes across Europe, too. UK third-quarter GDP data are due for release at 09:30 GMT. US wholesale inventories are on the slate for 13:30 GMT.
Standout story
The yen has been the whipping boy of the greenback’s recent advance, sliding more than 10 yen since Mr Trump’s election. Early on Friday it was approaching ¥114 to the dollar as the selling continued, helping the exporter sensitive Topix equity index to record an 11th straight day of gains.
But perhaps some traders think the recent slide for the yen was too stretched, because it has recovered to trade 0.5 per cent firmer at ¥112.76, possibly helped by news that the Japanese economy may be emerging from deflation.
Data released on Friday showed that headline consumer prices turned positive in October for the first time since February, while a measure of underlying inflation that strips out food and energy prices rose last month after registering zero growth in September.
Equities
The pan-European Stoxx 600 is dipping 0.2 per cent as miners gain ground but banks and energy groups pull back.
The tone across Asia was broadly positive, with Australia’s S&P/ASX 200 up 0.4 per cent and Hong Kong’s Hang Seng adding 0.5 per cent. China’s Shanghai Composite recovered an initial loss to gain 0.6 per cent.
Forex
In general, foreign exchanges are where the fireworks have been this week, with the likes of the Chinese renminbi, Indian rupee, Malaysian ringgit and Philippine peso all hitting multiyear lows against the US dollar. The ringgit is at a fresh trough but other EM currencies are a bit more chipper, with the Mexican peso, for example, gaining 0.3 per cent.
The dollar index hit a fresh near 14-year high of 101.92 early in the session, but is now off 0.3 per cent to 101.41 as the euro adds 0.4 per cent to $1.0590. So-called commodity currencies like the Aussie and Canadian dollars are firmer as the “Trumpflation trade” trundles on.
Fixed income
The US Treasury market has returned to action after a day’s holiday and the benchmark yield is again moving up as investors reprice inflation and monetary policy expectations in the wake of Mr Trump’s election victory.
The US 10-year is up 3 basis points to 2.38 per cent, only a few basis points off its highest since July 2015, while equivalent maturity German Bunds are easing 1bp to 0.26 per cent.
The yield on the US 2-year note, which is particularly sensitive to monetary policy moves, is up 1bp to 1.15 per cent — its most in six years as the market puts the probability of a December rate rise by the Fed at 100 per cent.
Commodities
Gold is benefiting from the softer buck, the bullion adding $8 to $1,192 an ounce. Brent crude is down 1 per cent to $48.52 a barrel as some traders remain sceptical that Opec can reach a deal to cut production during its meeting at the end of the month.
For market updates and comment follow us on Twitter @FTMarkets
