In November, pending home sales in the United States increased by 3.3%, surpassing the anticipated 1%. This data suggests a boost in the housing market during that time.
The Dollar remained strong after a correction from record highs, marking a loss of more than 3% on the day. Meanwhile, gold traded below $4,400, with influences such as optimism over a Ukraine-Russia peace agreement contributing to its losses.
Crypto Markets Reacting Positively
Cryptocurrency markets saw Bitcoin, Ethereum, and Ripple rise by about 3% on Monday. Gains occurred despite low liquidity during the holiday season, with a supportive shift as US-Russia peace discussions continued.
Bitcoin and major altcoins experienced a bullish transition as selling pressure decreased. Meanwhile, economic predictions for 2026 envision robust performance in advanced countries, rooted in stabilising factors from 2025.
In the crypto market, 2025 was volatile, yet favourable regulatory changes in the U.S. and other advances suggest a positive trajectory. Additionally, digital assets saw developments in Treasury and AI adoption.
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Unexpected Economic Strength
The November pending home sales data, coming in at 3.3%, is significantly stronger than the 1% we were expecting. This suggests the US economy has more momentum heading into 2026 than previously thought, a view supported by the resilience we saw through most of 2025. This unexpected strength could force the Federal Reserve to reconsider the 75 basis points in rate cuts that derivative markets have been pricing in for next year.
While the broader economic outlook for 2026 appears solid, we are seeing some year-end weakness in AI stocks that has recently dragged down the Dow. This looks like simple profit-taking after a massive run, similar to what we witnessed in other high-growth sectors at the close of 2023. We could use this dip to position for a potential rebound in early January when full liquidity returns to the market.
Gold’s sudden drop from its record high above $4,500 is a classic holiday market move, likely exaggerated by thin trading volumes. The combination of profit-taking and optimism over peace talks created this sharp correction, especially after a historic rally in 2025 that saw prices nearly double the highs of 2024. Options traders might see this heightened volatility as an opportunity to sell premium, betting that the price will find support as markets normalize.
That robust US housing report directly strengthens the case for the US Dollar against currencies like the Pound Sterling. The Fed now has less reason to cut rates aggressively compared to the Bank of England, which continues to face a slower economic environment. We should watch for this dollar strength to persist as the new year begins, creating potential plays in currency futures.
Crypto markets like Bitcoin and Ethereum are showing renewed strength, reacting positively to the same geopolitical optimism affecting gold. This move builds on a volatile 2025 that was ultimately supported by real progress in regulation and asset tokenization. We can expect this sensitivity to macro news to continue, presenting opportunities in futures and options for those anticipating volatility.
