US Stocks Advance Again – Dow up 0.75%
US stocks pushed higher in trading yesterday as investors continued to digest recent updates and look ahead to key earnings reports. The Dow led the way higher, closing up 0.75% on the day, followed by the S&P and Nasdaq, which rose 0.58% and 0.55% respectively. The dollar gained some ground against the majors, the DXY up 0.16%, while Treasury yields fell again on increased hopes of a Fed rate cut—the 2-year off 4.3 basis points to 3.650% and the 10-year down 3.7 basis points to 4.172%. Oil prices crashed back to 2-week lows, Brent down 2.93% to $63.93 and WTI down 2.63% to $60.42. Gold also fell lower, down 0.77% on the day, to close at $3,315.63.
Major Currencies Prepped for Big Moves
FX traders are preparing for a big few days ahead as key data out of the United States is due to drop, and many of the major pairs are sitting at key technical levels. The greenback has taken a huge hit in the last few weeks after President Trump’s ‘Liberation Day’ as tariff fears have dominated flow. However, fundamental data due out in the next few days could see those moves either corrected strongly or pushed even further. Most of the major currencies are now sitting, given recent volatility, close to dollar lows, and a succession of poor numbers out of the States—particularly in jobs numbers and inflation—could see those levels break and moves accelerate to the downside for the dollar. Stronger numbers could reassure markets that the US economy is still running strongly, pull back expectations of Fed rate cuts, and see majors pull back into recent ranges.
Full Event Calendar Day Ahead for Traders
The macroeconomic calendar is full of updates today that should see the market focus transfer to fundamentals, away from geopolitical updates. The Asia session kicks off with key data releases out of Australia and China scheduled at the same time. Australian CPI data (exp. 0.8% q/q and 2.3% y/y) and Chinese PMI data (Manufacturing exp. 49.7 and Non-Manufacturing exp. 50.6) both have the propensity to move their respective markets, and we could see some sharp moves if they miss expectations. There will be more focus on inflation once London opens, with German CPI data (exp. 0.3%) due out throughout the day on a state-by-state basis. But the real hits will come once New York opens, as we have a huge data drop in the US with ADP non-farms (exp. 114k), Advance GDP (exp. 0.2%), Employment Cost Index (exp. 0.9%), and the Core PCE Price Index (exp. 0.1%) all due for release during the session, as well as Canadian GDP data (exp. 0.0%).
