US stocks were lifted by FOMC minutes released overnight which indicated Fed's confidence in hiking interest rates in December, but dollar was mixed. DJIA closed up 247.66 pts, or 1.42%, at 17737.16 while S&P 500 closed up 33.14 pts, or 1.62%, at 2083.58. The strong risk appetite suggested that investors were more comforted by Fed's optimistic views on the economy rather than worried by the prospect of hike. And as both indices were well supported by 55 days EMA before the rebound, focus would now be turned back to historical highs of 18351.36 in DJIA and 2134.71 in S&P 500. Dollar index, on the other hand, is feeling some pressure ahead of 100 market and lost much momentum. In other markets, gold recovered mildly as dollar retreated but stays weak below 1080. Crude oil continues to stay in tight range just above 40 handle.
The minutes of October FOMC meeting released overnight showed that "most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting." The key was that "most participants" were comfortable with a December hike and that was even before the strong NFP number released in first week of November.
Fed officials were also concerned that a delay in rate hike might be misunderstood by the markets and "could increase uncertainty in financial markets and unduly magnify the perceived importance of the beginning of the policy normalization process". Also, Fed was concerned with the "increasing risk of a buildup of financial imbalances after a prolonged period of very low interest rates". And the minutes also spelled out that deferring the rate hike could be "interpreted as signaling lack of confidence in the strength of the U.S. economy or erode the Committee’s credibility." Meanwhile, the minutes also showed that Fed would be "assessing a range of labor market indicators over the period ahead to confirm further improvement in the labor market".
Elsewhere, New Zealand PPI inputs rose 1.6% qoq in Q3 while PPI output rose 1.3% qoq. Japan trade deficit narrowed to JPY -0.2T in October. In European session, Swiss trade balance, UKK retail sales, ECB monetary policy meeting accounts will be watched. Canada will release wholesale sales in US sessions. US will release jobless claims, Philly Fed survey and leading indicators.