Stocks, commodities and cryptos bounce, USD dips as risk-on returns

Another low volatility, quiet news day saw risk assets reverse Monday’s price action with US equities steadily rising throughout the session on lack of any obvious catalyst. Tech outperformed on the improved risk outlook with global risk appetite seemingly unperturbed by the continued ramp-up of Chinese COVID restrictions.

The US dollar softened in Tuesdays session, in line with the risk on narrative, with  the US dollar Index  finding resistance at the 50% Fib retracement of the post soft CPI reading sell-off.

Crude Oil was bid on risk appetite, continuing its rally after the OPEC+ denials of any production increases and a bigger than expected draw on inventories. Though there was some late weakness in the session as the EU eased sanctions on Russian oil.

Gold had a roller-coaster of a session, finishing pretty much unchanged after Asian session gains were sold during the EU and US sessions.

Bitcoin managed to hold the November lows which have proven to be short term support zone, bouncing back above 16k in a positive session.

Today’s economic calendar is a lot busier, starting with a RBNZ rate decision where a supersized 75bp hike is expected, though some commentators are predicting a 50bp move, so we could see some volatility in the NZD.

The next biggest risk event will be the FOMC minutes from their November meeting where they hiked 50bp, any clues in these minutes could see a re-pricing of future Fed moves, putting the market into risk on or off mode for the late half of the US session.