Tech Stocks Surge to Start a Big Week – Nasdaq Up 1%
Tech stocks surged higher on the first day of a busy week yesterday, while earlier in the day, the Euro took a hit as the potential for a French government collapse increased. The Dow dropped on the day, losing 0.29%, while both the S&P and Nasdaq pushed to fresh highs, gaining 0.24% and 0.97% respectively. The dollar strengthened in line with the weaker Euro and robust US data, while US yields edged higher, with the 2-year yield up 1.9 basis points to 4.182% and the 10-year yield rising 2.3 basis points to 4.197%. Oil prices traded within familiar ranges, with Brent up 0.15% to $71.93 and WTI up 0.15% to $68.10, while gold rose 0.60% to $2,636.54.
Euro Drops as French Interim Government Faces Peril
The Euro declined in trading yesterday as geopolitical concerns in France intensified, with the far-right National Rally likely to support a no-confidence motion in the coming days. The political balance in France has been precarious since the recent elections, and the interim government now faces significant instability. The Euro fell 1% in trading yesterday, and further escalation of the situation could drive it lower. The single currency is now trading just below 1.0500 and the 200-day moving average on the hourly chart. Further negative headlines from France could push it towards the longer-term trend line support around 1.0345. Any rallies are expected to be capped by recent highs near 1.0600 in the current environment, but traders anticipate further volatility as Europe opens later today.
The Trading Week Gains Momentum
The event calendar continues to gather momentum today, with key releases expected and the potential for more geopolitical influences to impact the market. The Asian session on Tuesday is relatively quiet, but attention will shift to Swiss markets during the European open when CPI data is released. However, developments in the French political landscape are likely to keep Euro traders on edge. The first US jobs report of the week, the JOLTS Job Openings data, is set to be released soon after the New York open, with a 7.5 million print expected. Later in the day, Federal Reserve members Adriana Kugler and Austan Goolsbee are scheduled to speak, with traders eager to see if their comments align with the slightly dovish tone expressed by Christopher Waller yesterday.
