Investors Look for a Better Week Ahead
Investors are hoping for a better week ahead after enduring a painful last week where many concerns came to a head and led to downside risks being realized across markets. The major indices in the US experienced a tepid finish to the week but the damage had already been done, Friday saw the S&P close 0.01% down, the Nasdaq off 0.2% and the Dow finish just 0.07% up. The dollar finished out 5 straight weeks of gains and US treasury yields pushed higher again, the benchmark 10-year hitting a 10-month high of 4.328%. Investors are looking for some fresh catalysts to reenergize some markets but it’s a thin event calendar ahead and some are already looking to the Jackson Hole symposium at the end of the week for a change of direction.
Gold Bears Continue to Win Big
Gold has experienced a tough run over the last few months and is now 9% down from the all-time high it hit in May. The shiny metal has been trading comfortably under $1,900 for the last few sessions and traders continue to search for fresh levels to sell. The dollar’s recent resurgence has certainly helped with the move but those investors who are normally looking for gold haven strength when markets turn south have been left feeling a bit perplexed as the dollar side of the equation has dominated. Having broken recent support levels, technically the way is open for a run down to $1,800, with initial resistance coming in around the $1,910 level, but if we do see risk trades continue to fall do expect some rallies as haven flows eventually come through.
Long Day Ahead for Investors
We have already seen the main event on the data calendar today and markets remain on the back foot as they did for most of the last week. The main focus for the day was the latest update from China on its Loan Prime Rates and the results have disappointed the market, expectation was for cuts in both the 1-year and 5-year rate but the PBOC delivered a 0.1% cut in the 1-year, leading to more downside for Chinese markets and sentiment in general. There is little else on the event calendar today and so traders are expected to keep a ‘sell rallies’ mentality in the next couple of sessions.
