Markets take a Breather as Yields Grind Higher
Global financial markets took a bit of a breather yesterday amid concerns of more geopolitical issues and stronger US data. The three major US stock indices all closed the day relatively close to flat as investors took the opportunity to assess the current climate, the Dow finished up just 0.04%, the S&P 500 dropped a fraction, down 0.01% and the Nasdaq lost 0.3% on the day. US Retail Sales data jumped more than expected and US treasury yields moved up again with the 2-year registering its highest level since 2006 and the 10-year jumped 15 basis points to hit a 17 year high. The dollar did not follow in their wake as currencies continued to trade in familiar ranges. Gold and Oil moved north on the back of more haven flow.
Oil Once Again in Focus as Biden Travels to the Trouble Zone
Oil prices moved higher again during yesterday’s trading as investors looked ahead to Joe Biden’s trip to the Middle East. The US is attempting to walk a political tightrope and traders are concerned that their efforts will be in vain, and the conflict will escalate leading to a drive higher in prices for the Black Gold. West Texas Intermediate is now trading above $88, and Brent is approaching the $92 level but if things take a turn for the worse in Israel, then both could jump towards the key psych level of $100.
Traders Brace for a Busier Day Ahead
Markets were relatively quiet yesterday given the volatility we have seen over the last few weeks, but traders are bracing for things to speed up today with the US President set to visit the middle east and more economic data on the horizon alongside central bank updates. Already we have heard from RBA Governor Michelle Bullock in the early hours of the Australian session but the major focus for traders will be key Chinese due out later in the day, with Industrial Production data topping the list. The focus for the European session will be on the UK once again with the release of key CPI numbers. The US session has mainly lower tier data releases but there is a plethora of FOMC speakers lined up during the day that should ensure volatility on rate calls.
