Stocks Continue to Drive Higher – Nasdaq up 0.95%
US Stock markets shrugged off another round of cautionary Fed comments and valuation concerns to post more record high closes, with the S&P in touching distance of the 5,000 level. The Dow gained 0.4% on the day, the S&P 0.82%, closing at 4,995.06 and the Nasdaq rose 0.95% as big tech kept the index moving higher. It was quieter in other markets with US Treasury yields relatively stable after a strong sale in the 10-year Auction, the 2-year gained 2 basis points to hit 4.43% with the 10-year also adding another 2 basis points to trade up to 4.11%. The dollar was also subdued, the Dxy losing just 0.11% on the day with the Euro gaining 0.18% to trade around 1.0775 by the end of the day. Oil jumped higher, Brent pushing up 0.8% to $79.21 a barrel and WTO adding 0.75%, up to $73.86 a barrel and Gold spiked during the day to hit highs near $2,045, but ultimately closed back near opening levels at $2,035 per ounce.
FX Traders Poised for Fresh Direction
It has been a quiet few days for FX traders, with the majors languishing in familiar ranges and pairs mainly moving on intra-day flow rather than any market moving fundamental changes. There was a sharp move after last weeks US employment data which saw the dollar appreciate strongly but now traders are looking for fresh catalysts to push currencies in new ranges. Fed comments have largely backed up the Chairmans recent comments and pushed back on market expectations for early rate cuts and now traders are analyzing how much that is priced into current dollar levels from an interest rate differential perspective. Several of the majors are near recent highs for the dollar and the next big data print could see the FX world ignite, especially if we see more evidence of a resilient US economy.
Positive Momentum for Markets Today
The APAC session will start the day on the front foot today after another ‘risk on’ day on Wall Street with investors hoping that US momentum will flow through to Asian bourses. The session will have a strong focus again on the Chinese economy with the release of key inflation numbers midway through the day. The CPI year-on year number is expected to come in showing a 0.5% decrease with the PPI number having a 2.6% decrease priced in. The European session is relatively quiet again and so investor focus will once again focus on fresh updates once New York opens. The US session has the usual weekly unemployment claims numbers due out with expectations for a 221k print and we also hear from the FOMC’s Thomas Barkin on two separate occasions as well as the MPC’s Catherine Mann.
