1. Silver Hits an All-Time High — Volatility Rising
Silver made an all-time high, with dip buyers stepping in aggressively overnight. There’s also a lot of noise around ETF buying.
All of this is positive — but it’s important to remember that ranges in silver are expanding. That means bigger upside moves, but also deeper pullbacks.
As silver surges, gold, platinum, palladium, and copper are seeing solid buying as well. Metals are on fire — just be extra cautious when momentum gets this hot.
2. Central Banks + U.S. CPI: A Big Day Ahead
Tomorrow is packed: major central bank decisions plus U.S. CPI.
- Bank of England: rate cut expected
- ECB: expected to hold
- U.S. CPI: consensus around 3%
The Bank of Japan is the wildcard. Odds of a 25 bps hike are near certainty, and Japanese yields have been creeping higher. The big question: what happens to the carry trade?
3. S&P 500 Defends the 50-Day Moving Average
Quietly, the S&P 500 tested its 50-day moving average yesterday — and bounced.
It’s still holding, but the level matters. Historically, the index has been very reactive around this average. The last sustained break below it triggered heavy selling. This was in November.
We’re heading into low-volume trading next week. If a meaningful move is going to happen, my view is that it’s more likely in the next few days, not later. Or, happens in the new year at this point.
4. Oil Breaks Key Support — Downside Risk Growing
WTI crude broke below a major support level near $56.50 yesterday.
That level held for months, but buyers didn’t show up this time. From a technical perspective, oil looks set up for further downside. Fundamentals aren’t helping either.
This morning’s Venezuela-related headlines sparked some panic buying, but I also wonder how many active shorts are still in the market.
If oil continues lower, unhedged producers with high production costs will feel the most pain. And, airlines could get little bit more relief? What about transportation?
5. Bitcoin Struggles — Canadian Banks Worth Watching
Bitcoin continues to struggle to attract buyers. The big question remains: what’s the catalyst?
Meanwhile, the U.S. dollar index looks weak.
Canadian banks are sitting at all-time highs, which makes sense — many of the worst-case scenarios didn’t materialize. But with a massive wave of mortgage renewals happening at much higher rates, shouldn’t PCLs (provisions for credit losses/bad loans) start moving higher?
If so, does profitability take a hit? What am I missing?
That said, large Canadian banks are cash-generating machines. If we do see selling, they could start to look more attractive.