Global Market Update
US Market Overview
The US market experienced a quiet trading session due to the Thanksgiving holiday and a lack of significant economic data. The US dollar index (DXY) remains under modest downward pressure following softer ADP employment data and reports that President Trump’s economic advisor, Kevin Hassett, is a frontrunner for the Fed Chair role. These developments have reinforced market expectations of a dovish tilt at the Fed, leading to a modest bull steepening in the near term. This reflects expectations for rate cuts paired with a slightly firmer long-end.
Japanese Market Update
In Japan, BOJ board member Noguchi, known for his dovish stance, noted that the central bank is getting closer to its 2% inflation target. He warned of higher prices if the yen’s weakness gathers pace. However, he stopped short of indicating when a rate adjustment might occur. Markets are eagerly awaiting BOJ Governor Ueda’s speech next Monday for any clues on the timing of rate hikes. Currently, market pricing reflects a 56% probability of a December hike, up sharply from around 16% a week ago.
Upcoming US Data Releases
Next week’s US data releases include the November ISM manufacturing survey and several delayed September indicators. The ISM survey could provide valuable insights into manufacturing employment and new orders. However, the delayed September data may not significantly impact the broader dollar outlook.
Regional FX Update
Asian FX markets were largely subdued, with the exception of a 0.4% gain in KRW. The Bank of Korea held its policy rate at 2.50%, signaling a possible shift from a pause in rate cuts to the end of its easing cycle. This change is due to rising financial stability concerns. The BOK also raised its 2026 growth forecast to 1.8%, from its August projection of 1.6%, and revised next year’s inflation outlook to 2.1% (from 1.9%). The bank noted that its current policy stance is broadly neutral.
China and Malaysia Trade Agreement
China has reportedly expressed concerns over certain aspects of the Malaysia-US trade agreement, although details remain unclear. Beijing emphasized that any trade deal should not impede global trade development, regional cooperation, or harm China’s interests. Malaysia has responded by addressing the issues raised, aiming to resolve the concerns and move forward with the agreement.
Conclusion
In conclusion, the global market is experiencing a period of uncertainty, with various factors influencing the US dollar index, Japanese market, and regional FX markets. The upcoming US data releases and BOJ Governor Ueda’s speech will be closely watched for any clues on future rate hikes and their potential impact on the market. As the market continues to evolve, it is essential to stay informed about the latest developments and their effects on the global economy.
