The Dollar holds onto gains, Yields hit 5-month lows (Powell remained Dovish) and Equities hit new all-time highs (yet again), then crashed and recovered. Still to come this week; the ECB, a raft of PMIs, plus the Earnings Season continues.
Jobs and Unemployment remain very much in focus. The weekly US unemployment claims missed expectations again, coming in at 360,000, with 350,000 expected this week. The data continues to trend lower, but it is a choppy ride for those long term unemployed.
The vaccine rollouts continue to drive sentiment, but the Delta variant remains a significant concern. Extended restrictions remain in place across numerous Asian countries. Over 3.7 billion doses of vaccines have been administered globally but many low-income countries have less than 5% vaccination rates and the death toll now exceeds 4.1 million.
This week FX volatility was evident again. The USDIndex rallied from 92.00 support, spiking to 93.20 on a safe-haven bid. EURUSD remains below the key 1.1800 and has tested the next support at 1.1750, while USDJPY spiked down to 109.00 before recovering to 110.00. Cable tested down to 1.3570 from a spike to 1.3900, and now trades at 1.3600.
Global stock markets posted more new all-time highs, but then crashed on Monday and recovered on Tuesday. The tech and cyclical stocks led the latest move higher. The USA500, USA100 and USA30 rallied to highs at 4,380, 15,002 and 35,000 before testing down to 4,225, 14,450 and 33,735, respectively.
The Gold price held onto gains this week, trading as high as $1835 before testing under $1795 as the Dollar firmed, before retaking the psychological $1800 level and the key 20-day moving average at $1810.
USOil prices tanked this week, as a deal within OPEC+ was agreed confirming output increases, while global worries over the virus continued to hang on global growth expectations. Prices pushed down to $64.50 from over $72.50 and currently trade at $67.00.
The yield on the US 10-Year Treasury Note is very much in focus again, plummeting under 1.13% to post a new 5-month low as equity markets sold off on Monday. Rates have since moved back over 1.20%. 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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