Market News Today – US Equities closed flat, USD (new 2-week lows) and 10-yr yields cool further. FED mins. supported lower for longer mantra, benign inflation concerns and no scaling back of support until recovery is clear. US Trade deficit at record, increasing by 4.8%, Biden offered to negotiate on 28% corporate tax rate proposals (25%?). Overnight – Nikkei closed down 0.07%, UK houses prices climbed, JPY Consumer confidence up significantly and German factory orders inline. Gold holds 1740 and Oil inventories fell more than expected, USOil trades at $59.20. Beijing now has more billionaires than any where else and bitcoin mining in the country could consume more energy than Italy by 2024.
Still to come this Week – ECB Minutes, Weekly Claims & Powell speech (8th), CAD Jobs & US PPI (9th).
European stock markets are broadly higher in early trades, with GER30, UK100 and the Euro Stoxx all up 0.4%. US futures are also sought after the S&P already reached another record high yesterday, and the USA500 breached 4,100 for the first time earlier today. Central banks remain eager to keep reflation fears under control and calm concern that they may be forced to rein in stimulus earlier than currently expected. However, while central bank buying will keep markets underpinned, there is increasingly also the risk of bubbles (housing is of particular concern in many jurisdictions) that could have costly consequences if and when they burst.
Today – ECB minutes, US Weekly Claims, BoE’s Haldane, Fed’s Bullard, Powell, Kashkari.
Biggest (FX) Mover @ (07:30 GMT) AUDUSD (+0.30%) rallied from a test of 0.7600 yesterday over S1 and has moved higher today. Over 200hr MA to test PP at 0.7640. MAs remain aligned higher, RSI 53 but still rising, MACD histogram & signal line aligned higher but remain under 0 line from early yesterday. Stochs. in OB zone and cooling. H1 ATR 0.0009, Daily ATR 0.0064.
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Stuart Cowell
Head Market Analyst
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