What Happened

  • Year-end portfolio rebalancing drove buying in value and dividend sectors.
  • Treasuries caught a bid, pulling long-end yields lower and flattening the curve.
  • The dollar weakened broadly, giving EM FX a lift.
  • Industrial metals gained as risk appetite leaned toward real assets.

What It Means

  • The tape is flow-led, not data-led, which makes moves less durable.
  • A softer dollar keeps the rotation toward commodities and cyclicals supported.
  • Bond strength signals a preference for stability into year-end.

What I Think

  • I expect choppy, low-volume trade to continue through the fixings.
  • Rotation themes still favor energy and industrials over high-duration tech.
  • I will reassess once January liquidity clarifies real demand.

Market Terms

  • Year-end rebalance - Shifting allocations to meet target weights or reporting needs.
  • Bull flattening - Long yields fall faster than short yields, flattening the curve.
  • Real-asset bid - Investor preference for commodities and tangible assets.