Black Friday moment of frustration for Traders as the CME outage causes mayhem across the markets.
• Tech stocks shook off the AI panic with the Nas 100 jumping about 4 percent, dragging global equities higher.
• Gold held firm and looks on course for end of year highs
• Commodity currencies dominated as the USD softened, with AUD, NZD and CAD all pushing higher on the shifting rate outlook.
Weekly Market Wrap: Risk-On Returns, But a CME Outage Shakes Confidence
Breaking news:
Chicago Mercantile Exchange (CME) suffered a major overnight outage, taking down futures trading in gold, oil and other commodities. Stock indexes were also effected with knock on effects seen in Forex. For many traders it was a Black Friday moment, with orders unable to execute and positions left in limbo. Expect elevated volatility when the US market opens for a half day as markets scramble to catch up.
Nasdaq 100 +4%: Tech Shrugs Off the AI Valuation Panic
The fear about tech being overvalued has taken a back seat this week. Traders decided to step back from the AI panic and the Nasdaq 100 responded with a strong 4% push higher. The SnP and the Dow followed the lead, giving us 4 consecutive days of gains. When tech relaxes, everything else seems to breathe a bit easier.
The reopening of the US government finally gave traders some proper data to work with. The latest numbers clearly point to a softening labour market. Not a collapse, just a steady cooling. Rate traders reacted fast. The futures market is now pricing an 85% probability of a 25 basis point cut at the December meeting. That is a big jump from 40% last week and tells you the market believes the Fed is back in cutting mode.
CPI Today, PCE Next Week: The Two Inflation Prints That Matter
Later today we get US CPI which will give us another clue on where inflation is heading. The main event, though, comes next week when we get Personal Consumption Expenditure. Soft or in line data will seal the deal for a December cut.
Global equities mirrored the US strength. The UK FTSE and the German Dax both look set to end the week in positive territory as the risk on tone returns.
Gold Holds Firm: Still Pointing Toward Year-End Highs
Gold continues to look healthy and is still on track for potential year end highs. The recent pullback was more noise than narrative. Bitcoin dropped more than 30% while gold only gave back about 12%, which tells you which asset class has stronger fundamentals. Central banks continue to be net buyers and they do not care about day to day moves.
FX Snapshot: AUD, NZD, CAD Lead as the Dollar Softens (Yen Still Heavy)
The Forex market behaved exactly as you would expect in a ‘risk on’ environment. The AUD, NZD and CAD all gained across the basket. The USD lost around 1% against the majors. Traders believe Australia and New Zealand are close to finishing their cutting cycle, while the US still has more easing to go. The RBNZ cut 25 basis points this week but hinted it could be the final one for a while. That helped push the AUD, NZD and CAD higher while the USD softened. The Japanese yen stayed weak as fiscal worries continue to drag on sentiment.
Trading Takeaway: Pick Your Battles, Trade Your Plan
Trading is always about picking your battles. Not every chart offers an edge and some markets are better left alone altogether. Gold is still on my radar for trend continuation and the commodity currencies continue to look attractive while the dollar stays under pressure. Identify your market. Identify your edge. Trade your plan.
There are smart ways and careless ways to pass prop firm evaluations and I break all of this down in my latest recorded webinar. It is worth watching if you want a genuine advantage rather than relying on luck. (Click here for the webinar).
As always, stay nimble and follow your plan.
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About Andrew Lockwood
Andrew Lockwood is a seasoned professional trader with over 40 years of experience in financial markets. Starting his career on the floor of the London International Financial Futures Exchange (LIFFE) in the 1980s, Andrew has traded through multiple market cycles and volatility regimes. Today, he specialises in prop trading strategies, focusing on technical setups, risk management, and trader psychology. As the founder of PropIQ and a leading mentor, Andrew is dedicated to training the next generation of prop traders with proven, real-world trading methods.
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