US futures near new highs; Facebook releases its earnings
Today’s economic calendar is light, but the rest of the week promises to be very interesting, with central bank meetings in the Eurozone, Canada, and Japan, as well as earnings reports from the technology industry’s heavy hitters. Facebook will launch the earnings campaign immediately following Wall Street’s closing bell.
It is somewhat bizarre to watch US futures trading marginally lower from their all-time highs, even as inflation predictions continue to rise. If the tech sector earnings approve, the Nasdaq 100 might hit its highest level since September. This week, the S&P 500 and Dow Jones returned to uncharted waters, as investors have priced out the possibility of corporate tax rises in the US after the Democrats withdrew their proposals to raise taxes on corporations to strike a compromise on social spending.
In the FX market, the US dollar index is hovering around 93.75, with dollar/yen heading slightly up near 113.70. The single currency is failing again to surpass the $1.1665 strong resistance, tumbling around $1.1600. The Fed is prepared to taper as long as the data of the US remains stable, and markets are fully pricing in a Fed liftoff in Q3 22.
The prognosis for sterling appears precarious. The market is already pricing in four rate hikes by the end of next year. Especially as the latest PMIs suggest, the UK may struggle to continue its current growth speed. Pound/dollar is heading up near 1.3770 after two consecutive red days.
Oil continues to surge; gold touches $1,800 again
In the wake of the covid-19 outbreak, global oil supply remained tight while demand rose. WTI crude traded near $84.93/per barrel, a record seven-year high. Azerbaijan and Nigeria both agreed with Saudi Arabia’s Energy Minister over the weekend that the OPEC+ coalition should keep its approach to managing global petroleum supply.
Gold is flirting once again with the $1,800 psychological mark and it has been holding in a sideways channel over the last four months.
In other markets, aussie/dollar is trying to surpass the long-term descending trend line around 0.7500, while kiwi/dollar is flattening near 0.7145. Dollar/loonie is flat at 1.2363.