The Morning Update

The USD weakens, oil is lower, equity markets are up, and US yields ease on Trump's Treasury Secretary pick. The USD and US yields soften as markets anticipate that Treasury Secretary-Elect Bessent will take a more gradual approach, injecting more stability into the US economy & financial markets. Asian equities were mixed, while the European market and US future are up, supported as Bessent is expected to prioritize economic and market stability. Elsewhere, oil prices eased after Israel said it's potentially days away from a cease-fire deal with Lebanon's Hezbollah. Bitcoin strengthened from weekend lows, while gold weakened from 20-month highs. In focus this week is Monday's ECB Lanes speech. Tuesday, US FOMC minutes, NZ interest rate decision. Wednesday, US Core PCE, GDP, and Initial Jobless Claims. Thursday, German CPI, CAD Current Account, ECB's Lane Speech, and US Thanks Giving. Friday, German Retail Sales, CHF GDP, EU CPI, and CAD GDP. Today, with the light economic calendar, we expect currency markets to hold within their current trading ranges.

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In other news. Frantic diplomacy rescued fraught UN climate deal from collapse. France drops buy EU demand for Brussels defense fund. Russia recruits Yemeni mercenaries to fight in Ukraine. German business sentiment falls more than expected in November, ifo finds. US retailers stretch out Black Friday deals to lure flagging shoppers. Canadian postal workers strike drags on as weekend talks fail to break deadlock. UniCredit offers to buy rival Italian lender Banco BPM for $10.5 billion.

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In currency markets. Currency markets strengthen after President Elect-Trump nominates Bessent as Treasury Secretary. CNY & Asian currencies are flat on average against the USD. Trading currencies turned positive, with AUD, NOK & CHF up 0.15%, JPY, ZAR & NZD firmed 0.3%, and SEK & CHF strengthened 0.5% against the USD.

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In commodity markets. Oil & Copper prices are down by 0.4%. Natural Gas prices rallied by 5.66%. Gold & Wheat weakened by 1%. Silver prices tumbled by 1.5%. Soybean prices strengthened by 0.65%.

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CAD firms, extending last week's biggest gains since August, as the loonie received extra support following President-Elect Trump's Treasury Nominee of Bessent as Treasury Secretary. With a light economic docket today, investors will be focused on Tuesday's FOMC minutes and Wednesday's critical US inflation report to provide direction for the loonie this week.

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EURCAD rallies off its multi-month lows on a combination of weakening commodity prices and hawkish ECB comments.

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EUR extends gains through 1.0450 amid a softening USD. The USD softened in early trading following the nomination of Bessent by President-Elect Trump as the US Treasury Secretary. Euro found further support following ECB governing council member Villeroy de Galhau said that the ECB policy will develop regardless of what happens at the Federal Reserve. Domestically, the German IFO - Business Climate & Current Assessment both fell below forecast, while IFO Expectations came in as expected. Intraday, with the absence of key economic data releases, we expect to see the Euro stall at 1.0500.

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GBPEUR eases in early trading as the single currency found a boost from less dovish ECB comments.

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GBP advances but remains capped at 1.2600 despite a weakening USD. The pound made some advances in early trading alongside its peers as confidence improved following Besseent's nomination as the US Treasury Secretary. Domestically, UK businesses say they are scaling back on plans for growth following the recent Labour's budget and tax rises, warns the CBI. We expect the pound to hold within its current range today with the absence of key economic releases.