Precious metals all spiked upward on the opening bell in New York, in what is widely assumed to be a short-covering rally as traders square their books for the end of the year. The dollar edged lower in Europe, slightly losing ground to the pound, but hitting a five-year high versus the yen. Oil prices are slightly higher, as the vicious fighting in southern Sudan continues.
The yield on the 10-year Treasury is 2.99% this morning, brushing the high of 3.007 set in September.
First-time jobless claims in the U.S. fell by 42,000, from last week, with 338,000 newly-unemployed filing applications for assistance. Analysts had expected a drop of 35,000. The four-week rolling average for first-time claims rose 4,250 to 348,000. This reinforces the perception that the Fed made the right call to start tapering the $85 billion a month of bond buying off the secondary market by $10 billion, starting next month.
Stocks are basically higher across the globe, with the exception of mainland Chinese stocks. The efforts of the Chinese central bank to curb the rampant “shadow loans” market is producing a cash crunch at the end of every quarter, as banks start hoarding yuan to meet regulatory standards. As soon as the reports are made, the money will start flowing out again.
Wall St. opened higher, after edging to new records on Christmas eve. Most traders in the West are still on holiday, and probably will be until after New Years. While the whisper-thin volumes will mean extra volatility on any large moves, no one is looking to score that last dollar before the end of the year. The action will be selling losers to take a tax write-off, rebalancing assets, and squaring books.