What Happened

  • US markets reopened after the holiday with light volume; equities edged higher led by energy and industrials.
  • Long-end Treasury yields eased as duration demand returned, flattening the curve slightly.
  • The dollar drifted lower against the euro and yen while EM FX firmed.
  • Oil and copper pushed higher on year-end demand assumptions and thin supply headlines.

What It Means

  • Liquidity is still the dominant driver, so flows are moving prices more than fundamentals.
  • The rotation into real assets remains intact as the dollar softens and yields cool.
  • Year-end positioning keeps risk appetite constructive but fragile.

What I Think

  • I am keeping exposure modest and leaning toward cash flow sectors over duration.
  • Any sharp move in rates this week likely fades once January liquidity returns.
  • The signal to watch is the long end; if it keeps easing, rotation can extend.

Market Terms

  • Holiday reopen - The first full session after a market closure, often with thin liquidity.
  • Curve flattening - Long yields fall relative to short yields, compressing the slope.
  • Flow-driven tape - Price action dominated by positioning rather than new data.