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- European equities held around nine-month highs, led by gains from German equities, as the dollar eased, which boosted gold.
- Cryptocurrencies ran into a wall of sales following this week’s rally, with bitcoin down $ 2,000 over the course of the day and Ripple’s XRP shedding up to 30% over the course of the day.
- The Thanksgiving holiday in the United States kept trading volumes fairly low, with futures showing a modest increase over the course of the day.
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European equities mostly held steady around nine-month highs on Thursday, with German blue chips outperforming the broader region, while a weaker dollar helped support gold and cryptocurrencies hit a wall. of profit-taking after a huge rally this week.
The disappointing US data had little impact on the modest optimism prevailing in European markets, although it weighed on the dollar, which traded lower against a basket of major currencies.
Initial weekly unemployment claims in the United States were higher than expected for the second straight week, while consumer finance data showed a worrying decline in personal income. Both suggest that the economy may lose momentum as COVID-19 cases across the country soar.
With US markets closed for Thanksgiving, futures on the S&P 500, Dow Jones and Nasdaq 100 were flat to slightly higher, trading 0.1 to 0.3% higher on the day.
“Today promises to be a pretty quiet affair, thanks to the Thanksgiving holidays in the United States and a distinct lack of major economic releases,” IG analysts said in a statement. “However, with markets failing to react to yesterday’s disappointing number of jobless claims, there is an argument that the current bullish outlook means any short-term economic weakness is largely overlooked in every case.”
The Frankfurt DAX was trading roughly stable over the course of the day, while the mid-cap MDAX index rose 0.3%. This made it one of the best-performing indices in Europe, despite Germany having reported record cases of COVID-19 and Chancellor Angela Merkel kept the restrictions at least until Christmas.
The Stoxx 600, which hit nine-month highs this week, was almost unchanged over the course of the day as gains in the technology, healthcare and travel sectors offset losses in banking, oil and gas and equities. retail.
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Gold was up around 0.8%, gaining some respite after a sell-off in the past two weeks brought the price to a low since July. Gold is often traded inversely to the dollar index, although this relationship eroded slightly over the course of November.
The prospect of a vaccine fueled optimism about the economic outlook and, as a result, prompted investors to flock to high-risk assets, such as small-cap stocks, emerging market currencies and cryptocurrencies, leaving gold and the dollar. both late.
Commerzbank analysts said in a statement: “Against this backdrop, gold is likely to initially trend sideways in a corridor of $ 1,800 to $ 1,850.”
Cryptocurrencies fell dramatically as traders took profits on this week’s stellar rally. Bitcoin, the largest by market capitalization, fell nearly 12% to around $ 16,940, after climbing earlier this week to reach a near-record high of $ 19,497.
“We feel more and more of a bitcoin tipping point,” said John Kramer, a trader at cryptocurrency firm GSR. “Indeed, a cooldown is to be expected.”
The smaller coins Ethereum and Ripple plummeted, with Ethereum losing nearly 17% to trade around $ 494, well below this week’s 2-1 / 2-year high of $ 621. Meanwhile, Ripple has it lost nearly 27% over the course of the day, dropping to $ 0.503, having almost entirely reversed this week’s rally that took the price to a two-year high of $ 0.78.
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