The Dollar holds on to gains, Equities hit new all-time highs (again), NFP headline beat expectations and OPEC hogged the headlines. Still to come this week are the FOMC minutes, the ECB Strategy Review and the G20 meeting.
Jobs, Earnings and Unemployment remain very much in focus. The weekly US unemployment claims beat expectations last week, coming in at 364,000 (a new pandemic era low), with 345,000 expected this week. Headline NFP beat expectations significantly at 850,000, but a rise in the Unemployment rate and a fall for Earnings hit the Greenback’s rally.
The vaccine rollouts continue to drive sentiment, but the Delta variant remains a significant concern. Extended restrictions are in place across many Asian countries and Australia has extended its strict lockdown in Sydney. England announced an easing of all major restrictions from July 19 but admitted cases could rise to 100,000 a day. Over 3.1 billion doses of vaccines have been administered globally but many low-income countries have less than 5% vaccination rates.
This week NFP inspired FX volatility was evident again. The USDIndex moved up from its 92.00 support, which was then tested again post NFP, before settling higher at 92.50. EURUSD remained below the key 1.1900 and even tested the 1.1800 zone, while USDJPY spiked to 111.65 but could not hold the 111.00 level, testing 110.40 lows. Cable tested down to 1.3730 and then spiked to 1.3900 but has since slipped under 1.3800 again.
Global stock markets pushed higher to post more new all-time highs. The tech and cyclical stocks led the latest move higher, with industrials lagging. The USA500 and USA100 rallied to highs at 4,340 and 14,850 respectively, whilst the USA30 topped at 34,816.
The Gold price rallied this week and traded as high as $1815, up from last week’s low at $1750, and holds above the psychological $1800 level. The key 20-day moving average is now at $1805.
USOil prices continue to rally this week and spiked over $76.00 following the OPEC+ meeting meltdown where the UAE & Saudi Arabia could not agree production quotas for the remainder of the year. The price quickly cooled to $72.00 before settling over $73.00.
The yield on the US 10-Year Treasury Note is very much in focus again, plummeting to 1.348%, a low not seen since February. US Treasuries and the USD receiving safe haven bids keeps the yields well below the key support level at 1.60%.
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Stuart Cowell
Head Market Analyst
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