Talking Points:
• Historically, the US capital market drain through the Thanksgiving holiday can curb trends and volatility
• The absence of a key global participant can often disrupt global risk trend developments
• Yet, the FX market has recently found more motivation through monetary policy factors than 'risk'
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Investors that follow 'seasonality' factors reasonably expect the upcoming US Thanksgiving holiday to put a damper on market movement. The expected absence of the financial system's largest participant can certainly tame high-level trend development and exceptional volatility in global capital markets. However, the traditional 'risk' theme hasn't been the top fundamental theme for the FX market as of late. Monetary policy - between upgraded BoJ stimulus, ECB vows to do more and the Fed's press towards normalization - has claimed responsibility for most of the volatility and trend forged for the currency market over the past weeks and months. With officials growing more brazen in their efforts to influence the economy and markets, this week may prove just as volatility as any other. We discuss broken seasonality in the week Strategy Video.
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