Wall Street making fresh record highs, how sustainable is this rally?

Ross J Burland FXStreet

The Trump rally has continued mid-week on Wednesday and we are into further record territory.

The Dow Jones Industrial Average DJIA, +1.55% meanwhile, set another all-time high of 19,558.42 and finished at 19,549.62, registering its third-straight record close in a row.

The S&P 500 index also made a record high of 2,241.63 and made a closing high of 2,241.35, after opening in negative territory. The Nasdaq Composite rose 60.76 points, or 1.1%, to 5,393.76 and finished just a few points below its all-time high. Meanwhile, the Russell 2000, the small-cap index, advanced 12.62 points, or 0.9%, to 1,365.30.

Interest rates:

US 10yr treasury yields fell from 2.40% to 2.34%, and 2yr yields fell from 1.12% to 1.10%. Fed funds futures continue to imply a 100% chance of a rate hike on 14 December, with two more rate hikes priced in for 2017.

How sustainable is this rally?

This is comes in the wake of a new president elect, Trump, and prospects of reflation in the US economy with markets moving out of bonds and into risk-on asset classes and stocks. However, the rise in the US dollar could be a concern for US multinationals and you have to wonder where Trum will raise all of the funds that he intends for the government to spend during his term. The Fed will indeed have a hard time keeping ahead of the curve sustainably by raising interest rates without rocking the apple cart.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.