Markets:

• Gold up $27 to record $2719
• US 10-year yields down 2 bps to 4.07%
• WTI crude oil down $1.27 to $69.40
• S&P 500 up 0.3%
• JPY leads, CAD lags

Happy Friday and an especially happy on to the gold bugs, who are being richly rewarded with a 4-day rally and a fresh all-time high. The bids were strong and steady with dips being bought, despite much better sentiment in Chinese equities today (MCHI up 4.4%).

The upbeat mood in China led to a decent retracement in the US dollar and erased most of yesterday’s retail-sales-driven bid. The thinking is that a stronger economy in China will spill over to Europe and world growth, narrowing the gap with the US. The market is also getting excited about 2025 growth in general as equities continue to send positive signals.

The euro rebounded from a two-month low yesterday and gained 33 pips on the day in steady bids up to 1.0864 as the market tries to sniff out a 50 bps cut in December (odds at 23%). Perhaps that reflects optimism that inflation will stay low in light of another decline in oil prices.

The pound climbed back above 1.30 but carved out a minor double top ahead of 1.3075 and that’s a level to watch next week. Last at 1.3042.

Running against the upbeat trend was the loonie, once again. That was largely an oil trade but eyes are also on the Bank of Canada decision next week as the market prices in a 50 basis point rate cut, with the odds now up to 93%.