US Markets Power Higher – Nasdaq up 1.6%
US stock markets shrugged off political concerns in light of the change of democratic presidential candidate yesterday to focus on another potentially strong earnings season. The Nasdaq led the way north, adding 1.58% followed by the S&P and Dow which closed up 1.08% and 0.32% respectively as investors looked ahead to today’s key reports from Tesla and Alphabet. Other markets were more subdued, US treasury yields ground higher, the 2-year adding 1.6 basis points to trade up to 4.523% and the 10-year gaining 2.1 basis points to 4.260%. Asian FX saw a bit of movement after China cut key rates by 0.1%, with the Cny and Aud losing ground, however the dollar overall was little changed on the day, dropping just 0.1% on the index. Oil prices drifted lower again, Brent off 0.3% to $82.40 a barrel and WTI down 0.41% to $79.78 a barrel. Gold eventually closed lower as well, dropping 0.2% to $2,394, despite and initial spike on the Asian open after the Joe Biden update.
Aussie Dollar in Focus for FX Traders Today
It turned out to be a relatively quiet day for FX traders yesterday who had started the trading sessions on their toes expecting to see some volatility on the back of Joe Biden dropping out of the US presidential race. However, this was expected by a large chunk of the market and the Asian open was relatively benign. The big mover on the day however was the Aussie dollar which dropped again back into familiar ranges as commodities continued to drop and perhaps more crucially, China cut key rates. The Aussie experienced its biggest depreciation since June 7, losing 0.8% on the day and is now over 2.5% off recent highs and traders are expecting more moves in the sessions ahead. The pair is now sitting bang in the middle of recent ranges on the Daily chart with long-term support coming in around 0.6420 and resistance back up on the yearly high just under 68 cents.
Investors Eye Earnings Reports in Trading Day Ahead
Markets experienced a quieter day than some had envisaged yesterday as they largely took political updates out of the US in their stride. Asian markets are set to open on the front foot after a strong performance on Wall Street and they continue to react to yesterday’s stimulus out of China and there is little of note on the event calendar to disrupt that sentiment. The European session is also set to be quiet in terms of data releases, however things could get interesting once New York enters the fray. We have the first set of US data releases due out for the week in the form of the Existing Home Sales numbers as well as the Richmond Manufacturing Index data, but the real focus for investors will come from the latest earnings updates from ‘Magnificent Seven’ members Tesla and Alphabet later in the day.
