US Stocks Slip in Quieter Markets – S&P Down 0.4%
US markets slipped lower in trading yesterday as investors awaited the next catalyst to drive markets. The S&P broke a six-day winning streak to finish 0.39% lower, while the Dow and Nasdaq also lost ground, closing down 0.27% and 0.38%, respectively. The dollar fell against the majors in a choppy trading day, with the DXY down 0.42% at 100.02 by the end of New York. US Treasury yields were mixed, with the 2-year down 0.6 basis points to 3.971%, while the 10-year pushed higher, adding 4 basis points to move up to 4.487%. Oil prices were steady, with Brent up just 0.14% to $65.63 a barrel and WTI up 0.24% to $62.29. Gold jumped on market uncertainty and the weaker dollar to close up 1.84% at $3,288.87 an ounce.
Oil in Focus Again Today
Oil has jumped back into focus in early trading today as reports hit the market that Israel has made plans to strike Iranian nuclear facilities. This comes fairly hot on the heels—last week—of news that the US and Iran may come to an arrangement on Iran’s nuclear capability that could see sanctions lifted. WTI prices jumped 3.5% on the news through the $64-a-barrel level before settling back lower, but traders are anticipating more moves in the sessions ahead. Strong support levels for WTI now sit on the daily trendline levels and annual lows just above $55, with initial resistance now coming in on the trendline just under $67 and the 200-day moving average at $69.60. Traders have been looking to sell rallies in the current environment, with global growth uncertainty and increased supply later in the year contributing to lower prices. However, more geopolitical issues that could hit supply may change that sentiment moving forward, and any breaks of resistance levels could see moves accelerate higher.
UK Inflation Data in Focus Today
It is a quieter day ahead on the economic calendar for traders, and many are once again expected to keep a close eye on newswires for any geopolitical updates that could move markets. We have already seen oil pop higher early in the Asian session on news that Israel may be preparing for strikes on Iranian nuclear sites, and traders will continue to remain vigilant for any further updates. The main data focus for the day will come early in the European session, with key UK inflation data due out. Market expectation is for the headline year-on-year number to jump to 3.3% from 2.6% last time out, and traders are expecting to see some strong moves in the pound if there is any deviation from that print. The ECB Stability Review is out later in the session as well, which could see some moves in the euro, and later on in the day we have scheduled speeches from Fed members Thomas Barkin and Michelle Bowman.
