Happy Thanksgiving eve. This is the day of the rope for Dollar bears, as demand for the greenback soars to new highs -- sending shockwaves throughout credit markets. The euro is trading with a 105 handle against the dollar, off by 0.7%.
German bund yields are rising again, in addition to the rest of Europe.
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With mortgage rates soaring, it is only a matter of time before US housing is adversely impacted. And while the just released October new home sales data focused on sales of houses based on contracts signed in the month before the election, some concerns were already evident, when the number of new homes sold tumbled to 563K from a pre-revised 593K, badly missing expectations of a 593K print.
This was the weakest new home sales print going back to the 558K new homes sold in the month of June.
The Dollar Index has surged almost 7% in the last two months - one of the fastest spikes in 8 years - with the post-Trump spike the most significant. Today's buying panic has sent the Dollar Index to a crucial resistance level at around 101.80 (the 61.8% retracement of the 2001-2008 collapse).
101.80 is a line in the sand...
And that is where USD Index stopped today..
Yen is the biggest loser on the day against the greenback but all the majors (and Yuan) are tumbling....
Following the bump in Eurozone PMIs this morning, Markit reports November US manufacturing at 53.9 (better than 53.5 expected) and its highest since Oct 2015, showing "further signs of factories and their customers moving away from destocking to inventory-building amid a more optimistic outlook."
However, hope in the PMI survey seems to be decoupling from reality in actual production.
Following news that its Alzheimer's drug has failed final stage trials, Eli Lilly stock is crashing this morning to 2 year lows. The 'safe haven', 'paid-to-wait' stock has tumbled almost 15% - erasing over 6 years of dividends, and sparking contagious selling across Biotech stocks.