Monday was very benign in calendar terms but brought quite a moves on financial markets as many major equity indices stormed higher by over 1% and US dollar was able to mitigate recent losses. Sanguine moods dominate on Wall Street when all time highs have been set.
The S&P500 futures (US500) have seen the all time intra-day highs today and are en-route to the all-time high close. A relatively calm calendar and lack of ground-breaking news seemed to favour bulls as the market marched higher despite a lack of a clear impulse. Equity markets seem to be in a “so far – so good” mode and could be inching higher until some real threat shows up on the horizon. Despite many risks there is not admittedly an individual factor that could weigh on profits in the near term and with lower yields (despite the second rate hike this year in the US) asset managers seem to be playing “search for yield” game.
US500 is set to close at all time highs. Source: xStation5
The US500 seems to have ended a few days long consolidation at all time highs and looks set for a close decisively higher – a break that could lead to short term gains towards the end of the quarter.
The key support on US100 has been defended and a trend remains positive. Source: xStation5
Even the tech sector – the culprit behind a recent setback, has recovered today and while US100 remains short of all time highs, bulls have been able to retain upward trajectory.
On the fx front we have seen a return of the greenback. Ironically a day without major releases could now be a good day for the US dollar as the macro data has been disappointing for a while. Euro was on a back seat on Monday, as Macron’s win is not enough to propel buyers any more and GBP shed early gains as tricky negotiations loom.
Canadian dollar has been of the few currencies that has been able to keep up with the greenback as US Secretary Wilbur Ross assured Canada and Mexico were not currency manipulators. We pointed out at the EURCAD as the pair where re positioning could trigger a further sell off.
Declining prices of gold and silver dominated the commodity markets today as a combination of stronger US dollar and solid moods offered little support for precious metals.
Tuesday could not be ground breaking in terms of events either but we will have some highlights – RBA minutes during the Asia trade and (Bank of England) Carney’s speech as possible drivers for currencies.