Santa Rally Hopes Grow as Indices Rebound Before the Holidays

Hello and welcome to the Christmas Eve trading session. As we approach the end of the year, many markets are closed today, including some major exchanges. However, trading continues on key platforms such as the Forex market and American futures, providing opportunities for traders to monitor the ongoing trends. Let’s take a closer look at what’s happening across different market segments.

Yesterday’s trading session saw a notable recovery in global indices. This bounce could signal the beginning of a bullish correction or even the resumption of a broader bullish trend, depending on whether the recent downturn was merely a corrective phase. The sentiment remains optimistic, with buyers taking advantage of lower prices to push indices higher. As we head into the post-Christmas trading period, traders are eyeing the potential for a “Santa Rally,” a phenomenon where stock markets typically rise during the final days of December and early January. However, the true test will come when markets reopen after the holidays, with liquidity and momentum returning to normal levels.

In the Forex market, movements are relatively subdued this morning. The Japanese Yen is leading as the strongest currency, showcasing its typical safe-haven appeal. On the weaker side, the Australian Dollar, Euro, and Canadian Dollar are underperforming, though the lack of volatility suggests traders are scaling back activity ahead of the holiday. This quiet environment is typical of Christmas Eve trading, but minor shifts in sentiment could set the tone for the final trading days of the year.

Commodities are showing a mixed picture today. Oil prices are moving sideways after yesterday’s decline, with no significant bullish or bearish catalysts driving the market. In contrast, precious metals, including gold and silver, are experiencing a modest recovery, building on their reputation as defensive assets during periods of uncertainty. Overall, commodities are likely to remain range-bound as traders wind down for the year.

The economic calendar is largely empty today, with no major data releases expected. The Richmond Manufacturing Index from the US is scheduled for later in the day, but it is unlikely to have a significant impact on the market. This quiet calendar reflects the reduced activity across global markets as the holiday season takes hold.

As we close out the week and prepare for Christmas, the markets appear to be entering a quieter phase, with reduced liquidity and limited volatility. The focus for many traders will now shift to whether the post-Christmas trading period delivers the much-anticipated Santa Rally. Until then, I would like to take this opportunity to wish everyone a Merry Christmas and a happy holiday season. Let’s hope for a prosperous close to the year and a positive start to 2025!

Source: https://www.axiory.com/analytics/market-news/santa-rally-hopes-grow-as-indices-rebound-before-t