New week, new month, and the market decided to wake everyone up fast. The main story at the open is cryptocurrencies, where the mood turned sharply risk-off. Bitcoin is dropping close to 6%, while Ethereum is down over 6%, after fresh headlines from China that authorities will intensify their fight against virtual currencies, including stablecoins. Technically, both Bitcoin and Ethereum have escaped to the downside from their recent bullish correction patterns, which opens the door for new mid-term lows and keeps sentiment clearly negative on the crypto front.
On indices, the picture is calmer but still red. Major equity benchmarks are starting the week with a downside move, but here it looks much more like a natural correction rather than panic. Don’t forget: we’re coming off a very strong final week of November, so the current pullback is more about cooling off stretched gains than about a trend reversal. Traders are already asking the seasonal question: will December bring the usual Santa rally, or will macro and politics spoil the party?
On the FX market we have a stronger Japanese yen, while commodity and high-beta currencies are on the back foot: the Australian and New Zealand dollars, Canadian dollar, and Swiss franc are all weaker. That’s particularly interesting because commodities themselves are not weak at all. In fact, metals are climbing: silver is making new highs, gold is aiming for fresh highs, and oil looks like it’s maturing a potential end to its recent bearish correction, with buyers slowly rebuilding confidence.
From the macro side, Monday isn’t empty. The key reading on the radar is ISM Manufacturing PMI from the US, expected at 49, which will help shape expectations for growth and Fed policy into the final stretch of the year. With December just starting, the market narrative will increasingly circle around two themes: how deep this crypto and commodity FX shakeout goes, and whether equities can still deliver a year-end Santa rally despite all the noise.