There are also signs that the rally continues to broaden out from the usual mega-cap tech leadership. The Russell 2000 rose by 1.47% to sit just shy of the November 2021 highs and the MSCI US Banks Index is now up more than 38% YTD.

An extension of the risk-on rally in stocks is certainly nice for pension fund balances, but the most impressive price action of the day was to be found in Bitcoin. In yesterday's note I commented on Bitcoin breaking the $80k barrier over the weekend, but the gains kept running throughout the trading day to the extent that the $89k level has now been taken out.

While 'digital gold' has been on a tear, regular gold fell by as much as 2.6% yesterday to be trading just over $2,600/oz. There is perhaps an element of profit taking here after the yellow metal's stellar run over the course of 2024, but gold is also being weighed down by a strengthening US Dollar (up another 0.5% on the DXY yesterday) and ETF outflows to fund Bitcoin purchases. CFTC data confirms that speculators have cut their net long position in gold to the lowest in 12 weeks, despite the promise of bigger deficits and inflationary tariff policies from President Trump.

US bond markets were closed for Veterans Day (Armistice Day) yesterday, so there was no price action in Treasuries. German Bunds exhibited very minor bull steepening on the 2s10s as 2-year yields fell by 4.7bps and 10-year yields dropped by 4bps. Gilts exhibited a similar pattern of minor bull steepening, but the overall fall in yields was slightly less pronounced in the UK, perhaps owing to the ongoing reaction to Chancellor Reeves' big tax and spend budget.

The Bloomberg commodities index fell by almost 1% yesterday to extend losses for a second-straight day. Brent crude was down by 2.76% to $71.83/bbl and WTI fell even more sharply, down 3.27% to $66.08/bbl. Perhaps Donald Trump's vocal support of "drill, baby, drill!" explains the relative price action there, while the overall weakness in crude pricing is likely an amalgam of continued market oversupply, underwhelming stimulus in China and heightened expectation that Trump's election victory could see a deal brokered to end the war in Ukraine.