Markets Week Ahead: Gold, EUR/USD, S&P 500, FTSE 100, Inflation, Sentiment
2021-05-09 16:00:00
Rich Dvorak,
Analyst
Advertisement
Global markets were relatively calm this past week. Equity investors drove stocks higher, sending major indices like the S&P 500 to fresh all-time highs. Perhaps this was motivated by a sharply weaker US Dollar and repricing of Fed taper risk that followed a big miss on NFPs. In turn, the disappointing data brings the ‘bad news is good news’ narrative back into focus for stocks.
Gold jumped 3.6% to its highest level in 12-weeks as real yields tumbled and helped catapult precious metals. Crude oil was able to eek out a modest 2% gain with concerns about demand from India overshadowed by optimism surrounding economies reopening elsewhere. EUR/USD price action exploded 147-pips higher on the week thanks to broad-based US Dollar selling pressure. GBP/USD spiked 170-pips as the Sterling strengthened in response to the Bank of England tapering its QE
“While the market remains in a very tight range, the ‘money flow’ sell signal (middle panel) is reversing quickly. Importantly, note that the money flows (histogram) are rapidly declining on rallies which is a concern.”
This past week, market action was sloppy as investors are finding fewer reasons to push stocks higher. Friday’s very disappointing jobs report provided some catalyst as the Fed is assured not to reduce monetary support anytime soon. However, despite the push, the overall conviction was lacking.
Notably, the
“money flow buy signal” seemed to cross; however, we need some follow-through action on Monday to confirm. As shown, the uptick in money flows did allow us to add some exposure to portfolios in holdings we had taken profits in with the previous
5/7/2021 12:33:50 AM GMT | By Anil Panchal
USD/JPY bounces off intraday low, drops for the third consecutive day.
Japan government looks set to extend and expand the state of emergency on Friday.
Risk dwindles as pre-NFP caution joins virus woes to battle vaccine hopes, receding reflation fears.
Despite recently bouncing off intraday low, USD/JPY stays pressured around 109.00 as markets in Tokyo opens for Friday’s trading. In doing so, the yen pair justifies the coronavirus (COVID-19) fears at home as well as the typical pre-NFP trading lull.
As per Kyodo News, “The Japanese government is set Friday to expand the ongoing COVID-19 state of emergency beyond Tokyo and the Osaka region and extend it to the end of May in a bid to bring down infection cases and ease the strain on hospitals.” The report also mentions Japan’s 4,375 new infections on Thursday as down 27% versus the fourth wave peak marked last Saturday.
ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
May 6, 2021 | Bank of England Now 2nd Central Bank to Taper, After Canada, but Denies Tapering is “Tapering,” also Following Canada
Wolf Richter On his site WOLFSTREET.com, Wolf Richter slices into economic, business, and financial issues, Wall Street shenanigans, complex entanglements, debacles, and opportunities that catch his eye in the US, Canada, Europe, Japan, and China. He lives in San Francisco.
The Bank of England’s Monetary Policy Committee (MPC) today announced that it voted unanimously to maintain its policy rate at 0.1%. But in terms of its asset purchases, it took the trail the Bank of Canada blazed last November and then widened in April: tapering.
A Peek Into The Markets: US Stock Futures Edge Higher Ahead Of Jobless Claims, Fed Speakers benzinga.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from benzinga.com Daily Mail and Mail on Sunday newspapers.