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Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile

Economy
15.06.2021
166
Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile
  • European markets push higher
  • Yields back below 1.5% ahead of Fed meeting
  • Oil advances

Key Financials

US futures on the Dow, S&P, NASDAQ and Russell 2000 were little changed in trading ahead of the US open on Tuesday. European markets, including the STOXX 600, continue to post gains.

Treasuries fell slightly ahead of the release of economic data today as well as the US monetary policy meeting tomorrow.

Global Financial Affairs

After posting a new record high on Monday, driven by a rebound in the technology sector, S&P 500 futures fluctuated on Tuesday. Stocks in Europe extended their advance for an eighth consecutive day, in the longest winning streak in over two years on the outlook that the US central bank will keep its policy ultra-loose, even amid a rapid economic recovery.

We find ourselves in a unique market environment. Unprecedented stimulus, an economy restarting after a forced shutdown and expectations that the most accommodative monetary and fiscal polices in history will continue amid the optimism for a powerful economic recovery.

Two questions remain. Is the Federal Reserve so scared of a market temper tantrum that it might risk hyperinflation, the likes of which we have not seen since the 1970s? And are Fed members right that inflation is transitory?

Billionaire hedge fund manager, Paul Tudor thinks if the Fed does not increase rates, inflation will rise. And JP Morgan is hoarding $500 billion in cash, expecting inflation to spike.

So investors will be keeping a close eye on today’s US economic data—industrial production, producer prices and retail sales—and the Federal Reserve policy meeting, a two-day affair starting today.

In the UK, the FTSE 100 initially rose on news that Australia has signed a free trade agreement with a post-Brexit Britain, but then the index retreated slightly.

The British benchmark found resistance by yesterday’s shooting star, confirming the indecision and fear expressed in the highwave candle, formed May 10.

Australia’s ASX 200 outperformed, climbing more than 0.9%, along with Japan’s Nikkei 225

Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile
ASX 200 Daily

The benchmark completed a falling flag, bullish after the 2.7% jump over 5 sessions, and is slated to repeat another such move.

Yields, including the 10-year Treasury, pared gains after climbing Monday, in an extension of Friday’s bounce from a more than 3-month low following comments from Wall Street analysts who interpreted the rally as an opportunity to set short positions.

Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile
10-year Treasuries Daily

The 50 DMA is threatening a bearish cross below the 100 DMA, after yields fell below the Apr. 15 low, extending the falling channel potentially heading toward the 200 DMA below 1.300.

The dollar is moving up.

Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile
Dollar Index Daily

The greenback initially fell from the top of a potential rising flag, below the uptrend line since the Jan. 6 low, but, has now changed its trajectory and is moving north.

Gold was flat.

Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile
Gold Daily

Gold traders are waiting for the Fed meeting to determine whether to return into the rising channel or to retest the top of the falling channel since the 2020 peak record.

Bitcoin continued to gyrate amid a barrage of comments. The cryptocurrency briefly climbed above $41,000 only to pull back. The digital currency got a boost after veteran hedge fund manager Paul Tudor Jones re-endorsed the coin in a television interview.

Oil traded at $71 a barrel as investors weighed the outlook for rising demand against extended coronavirus curbs in some economies.

Opening Bell: U.S. Futures Hold, European Stocks Extend Rally; Bitcoin Volatile
Oil Daily

The price found resistance by Monday’s shooting star, which may signal a return-move to a bullish triangle.

Up Ahead

  • US President Joseph Biden and Russia’s Vladimir Putin meet Wednesday in Geneva.
  • On Thursday, US Treasury Secretary Janet Yellen testifies before a House panel on the federal budget.
  • Rate decisions come from Switzerland and Norway on Thursday

Market Moves

Stocks

  • Futures on the S&P 500 Index increased 0.1%.
  • The STOXX 600 Index gained 0.2%.
  • The MSCI Asia Pacific Index advanced 0.3%.
  • The MSCI Emerging Markets Index was little changed.

Currencies

  • The Dollar Index was little changed.
  • The euro advanced 0.1% to $1.2138.
  • The British pound fell 0.1% to $1.4102.
  • The onshore yuan weakened 0.1% to 6.402 per dollar.
  • The Japanese yen was little changed at 110.10 per dollar.

Bonds

  • The yield on 10-year Treasuries sank one basis point to 1.48%.
  • The yield on two-year Treasuries was unchanged at 0.16%.
  • Germany’s 10-year yield dipped one basis point to -0.26%.
  • Japan’s 10-year yield advanced one basis point to 0.051%.
  • Britain’s 10-year yield declined one basis point to 0.734%.

Commodities

  • West Texas Intermediate crude increased 0.2% to $71.02 a barrel.
  • Brent crude gained 0.2% to $73.04 a barrel.
  • Gold weakened 0.1% to $1,864.26 an ounce.
Author:investing

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