US Stocks Fly, S&P Hits Record High – Up 1.23%
US Stock markets had another stellar day on Friday with the S&P hitting a new record high close at 4,839 points. The Nasdaq had once again led the way higher as AI optimism continued to fuel the market, finishing the day up 1.70%, the S&P added 1.23% and the Dow jumped 1.05%. The University of Michigan Consumer Sentiment survey hit its highest level since mid-2021 helping to push US treasury yields higher, the 10-year pushing up to 4.145%, its best level in over a month while the 2-year added 5 basis points, now up to 4.408%. The dollar dropped off recent levels on the day but ultimately finished the week higher as markets pushed back rate cut expectations from the Fed. Oil dropped slightly lower on demand concerns and Gold remained at familiar levels.
Big Central Bank Week Ahead
There are no less than three major central bank rate decisions ahead this week and traders are anticipating plenty of volatility around the events despite all three being expected to keep rates on hold. The Bank of Japan, The Bank of Canada and the European Central Bank are all expected to keep rates steady although there are different narratives around each event, traders have been hoping for moves from each bank in the near future, hikes in the case of the BOJ and cuts from the BOC and ECB. However, sticky data across the board has meant that expectations have been pulled back, but traders will be hanging on every word from central banks in both statements and press conferences and therefore we could see more volatility in markets from these events than if we did in fact have moves in rates.
The Calm Before the Central Bank Storm
Global financial markets are expecting a relatively smooth trading day ahead as the event calendar is all but bare for the first three sessions of the trading week. There is one major event scheduled in the Asian session in the form of the latest Loan Prime Rate updates in China, but commentators are predicting that investors are likely to be disappointed and the PBOC will keep them steady. It is anticipated that this will be the calm day before we have a storm of central bank rate updates and data releases across the rest of the week and therefore most traders are expecting to see rangebound conditions with a risk on bias after Friday’s positive session in New York.
