With only two trading sessions remaining for 2017, liquidity dried up across the global markets. This has been obvious in U.S. and European equities, where volumes dropped significantly. However, some investors continued to tweak their portfolios slightly, leading to insignificant price action. I don’t expect equities to deviate much throughout Thursday and Friday.

Interestingly though, traders continued selling off the U.S. dollar.  One couldblame Wednesday’s U.S. consumer confidence report which fell from a 17-year high, but the dollar was declining before the release. I think the best explanation for the dollar weakness is the sharp fall in U.S. Treasury yields. 

10-year bond yields dropped7 basis points on Wednesday, to reverse almost 50% of the gains from mid-December towards last week, where yields broke above 2.5% for the first time since March 2017.

Despite appetite forrisk sendingAsian equities to record highs on Thursday, the safe haven Yen is outperforming its major currency peers. USDJPY dipped below 113 for the first time in sixtrading days after the release of Bank of Japan meeting minutes.  Some members are considering tightening monetary policy, if the economy continues to improve next year. This would be a significant shift in strategy for a Central Bank thought to be the last to exit the unconventional stimulus packages.  However, I don’tthink the BoJ will move anytime soon due to subdued inflation;but, given the lack of liquidity, moves in currency markets may be exaggerated.

Commodity currencies are also enjoying a decent upside, after copper prices rallied to their highest level in almost four years.Oil prices remained close to a two-and-a-half year high, and gold hit a one-month high. Considering that no Tier One economic reports will be released, the Aussie, Kiwi and Looniewill continue to follow commodity prices’ direction.

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