The greenback has run into profit-taking in year-end flows
Wall Street stock indexes were little changed during overnight trading. Still, as investors shrugged off concerns on the spreading omicron variant, the Dow and S&P 500 closed at all-time highs. The Dow gained 0.25% and has now risen six straight trading days. The S&P 500 finished 0.14% higher while the tech-heavy Nasdaq slipped less than 0.1%. By the way, the S&P 500 is now looking at its strongest three-year performance since 1999.
Asian shares were mixed on Thursday. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat while finishing the year 6% lower. The Shanghai Composite gained 0.6% after China showed readiness to keep the economy liquid via record bond issuance. In Japan, the Nikkei 225 shed 0.40% while South Korean Kospi fell 0.52%.
In currencies, the dollar weakened nearly across the market during the US trading on Wednesday despite the elevated Treasury yields. The greenback has run into profit-taking in year-end flows. Also, the dollar was pressured by weak economic data. The US pending home sales for November dropped below the forecast of +0.5% to -2.2% on a monthly basis whereas good trade balance hit a record deficit of $-97.8 billion dollars versus $-83.2 billion prior. Following the sell-off, the USD index turned back positive on Thursday to get back above the 96.00 figure as US 10-year Treasury yields stay around the monthly top near 1.55%.
Meanwhile, oil prices surged after the government data showed U.S. crude inventories fell last week, offsetting concerns over rising coronavirus cases. The U.S. Energy Information Administration reported that commercial crude inventories declined 3.6 million barrels in the week ended Dec. 24, pushing stocks 7% below the five-year average for this time of the year. Against this backdrop, Brent crude briefly jumped to the $80 handle before retreating to the $79 area amid profit-taking. The futures were holding marginally above this level early on Thursday.