CME glitch; U.S. dollar on pace for weekly fall; Tokyo CPI - what’s moving markets

Investing.com - An outage on exchange operator CME Group’s platform disrupts trading in futures in a slew of assets, leaving traders flying blind ahead of a shortened U.S. session. The U.S. dollar is on track for its worst week in four months, as wagers on a Federal Reserve interest rate cut next month grow. Meanwhile, core consumer inflation in Tokyo stays above the Bank of Japan’s target in November, bolstering the case for a near-term hike in borrowing costs in the country.

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1. CME glitch impacts commodities, FX, stock futures

Commodities futures and options trading on CME Group’s popular platform was halted on Friday due to a technical issue at data centers, the world’s largest exchange operator said in a social media post.

“Due to a cooling issue at CyrusOne data centers, our markets are currently halted,” CME Group said in a statement posted on X. The company said it was working to fix the issue in the near-term.

Dallas-based CyrusOne operates more than 55 data centers in the U.S., Europe and Japan.

A host of commodities and agricultural goods contracts appeared to be disrupted by the outage. Futures prices for equity indices, including the S&P 500 and Nasdaq 100, also appeared to be impacted.

The outage further contributed to already slow trading volumes across the globe following the U.S. Thanksgiving holiday on Thursday.

Futures are a key component of financial markets, used by a wide variety of participants -- from trading desks to individual speculators -- to hedge or take positions in a range of financial assets.

2. Asian markets steady to end tough November

Asian stocks ended a difficult November on relatively steady footing, despite pressure on Chinese markets from renewed concerns over a property market meltdown in the country.

Japanese shares moved in a flat-to-low range as a swath of data showed unexpected resilience in the economy, driving up expectations for an interest rate hike by the Bank of Japan.

Regional markets received few trading cues on account of the U.S. Thanksgiving holiday. Overall losses in Asian stocks were still limited by optimism over a U.S. interest rate cut in December. But most bourses in the region were nursing losses for November, following a tumble in tech valuations through most of the month fueled partially by worries over the sustainability of massive spending on artificial intelligence.

Elsewhere, European shares edged up. The pan-regional Stoxx 600 index is on track to notch a fifth straight positive month, its longest monthly winning streak since 2024.

3. Dollar on track for worst week in four months

The U.S. dollar strengthened slightly, but the greenback is still facing its sharpest weekly drop since July as traders assess the probability of a rate reduction by the U.S. Federal Reserve next month.

By 03:28 ET (08:28 GMT), the U.S. dollar index, which tracks the currency against a basket of its global peers, had ticked up by 0.1% to 99.70.

Traders have raised the odds of a 25-basis-point Fed cut at the Dec. 9-10 meeting to around 85% from roughly 40% earlier this month, a swing that has knocked the dollar lower and trimmed bond yields.

The shift was driven by benign U.S. data and some dovish comments from Fed policymakers, although other officials have called for a more cautious approach to rate changes due to a lack of fresh economic data.

Speculation over a possible appointment of White House economic adviser Kevin Hassett to the Fed Chair role has added another layer to the debate. A Hassett-led policy stance could tilt toward faster and more aggressive easing, a dynamic that would typically put further pressure on the dollar.

4. Tokyo CPI in focus

Tokyo’s headline consumer price index remained unexpectedly steady at 2.7% in November amid high food prices, with underlying inflation also remaining well ahead of the Bank of Japan’s annual target.

So-called "core" CPI, which excludes volatile fresh food prices, grew 2.8% year-on-year in November, government data showed on Friday. The print was slightly above expectations of 2.7% and matched the prior month’s pace.

The core CPI reading, which is closely watched as a gauge of underlying inflation by the Bank of Japan, was above the central bank’s 2% annual target.

Sticky inflation could give the BOJ more impetus to hike interest rates. Policymakers have recently signaled they will consider raising rates at the BOJ’s December meeting.

But such increases risk putting the central bank at odds with Prime Minister Sanae Takaichi’s government, which has broadly called for looser monetary conditions and more fiscal spending to support economic growth.

5. Bitcoin hovers above $91,000

Bitcoin dipped marginally, yet floated above the $91,000 mark, as markets increasingly bet on a near-term interest-rate cut by the Fed and weighed the implications of the potential leadership change at the central bank.

The world’s largest cryptocurrency was down 0.4% at $91,129.7 by 03:44 ET. Last Friday, the digital asset briefly sank to near $80,000, its weakest level since April.

For the week, Bitcoin was set for a rise of nearly 8%, breaking four straight weeks of declines.