Friday last week took the shine off the ‘Santa Claus’ rally, as US Bond Yields spiked higher and US equities crashed. Markets are operating on skeleton crews with very low volume, over the holiday period of Christmas and New Year. This coming week will have limited data releases with interrupted holiday trading. A keen attention will be paid to the upward rise in US bond yields, as faith in the Fed’s rate cuts, dissipate. The US Dollar remained bid, with the EUR trading around 1.0400, while the GBP bounced off 1.2550.The strong reserve kept pressure on the commodity currencies, with the AUD barely holding 0.6200, while the NZD consolidates above 0.5600. This week will be a low volume affair, but markets will awaken with new enthusiasm in the New Year, with the US Presidential Inauguration coming up on the 20th of January.
