US Stocks Hit Fresh Records on Strong Data – Nasdaq up 0.75%
The major US stock indices pushed higher again in trading yesterday to hit new all-time highs after strong data shortly after the open. Retail Sales data came in much stronger than expected, pushing the Dow up 0.52%, the S&P up 0.54%, and the Nasdaq up 0.75%. The dollar also jumped higher against the majors, the DXY up 0.49% to 98.47. Treasury yields were more muted, closing close to flat, the 2-year down 1 basis point to 3.894%, and the 10-year down 0.6 of a basis point to 4.445%. Oil prices rose hard after news of drone strikes in the Middle East, Brent up 1.46% to $69.63, and WTI up 1.75% to $67.63 a barrel. Gold experienced a quieter day, finishing off 0.23% at $3,338.59 an ounce.
Dollar Higher Again on Strong US Data
The US dollar again pushed higher in trading yesterday after more strong data was released to the market. With the exception of the PPI numbers this week, most of the US data has surprised to the topside, prompting markets to push back expectations of a Fed rate cut in September and driving the greenback higher. The DXY pushed up to a high of 98.95 earlier in the session, and although it retreated later in the day, traders are now in a buy-on-dips mentality from a fundamental perspective, with the probable exception of USDJPY on the back of Japanese elections this weekend. Most market players are aware that geopolitical updates could see some more downside for the dollar; however, they now feel that until we see those risks come through to US data, we have space for more strength in the coming weeks.
Quieter Calendar Day Ahead for Traders
Financial markets traders are expecting a quieter day ahead today, with a much lighter macroeconomic calendar schedule. The Asian session is expected to start strongly after more strong US data prompted another record day on Wall Street. There is nothing major scheduled on the calendar, although traders will be keeping a close eye on newswires for any fresh geopolitical updates, and Japanese markets are expected to be wary ahead of the weekend’s election. It’s a similar story in the European day, with only really a speech from Buba President Joachim Nagel a potential market mover. The US session does see some data with the Preliminary University of Michigan Consumer Sentiment and Inflation Expectations numbers out, but once again, most traders are expecting geopolitics to dominate and have noted that Fridays have been particularly lively this year.
