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Market Wrap
A fairly balanced day today as the markets await some fresh directional news to trade off. At the London close the UK’s FTSE 100 was up 0.45% to 7,107, the German DAX was up 0.23% to 15,602 and the US Nasdaq 100 was up 0.36% to trade around 13,700.
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The commodities had slightly more movement with WTI up 0.82% to trade above $68.50 per barrel and Silver up 0.73% on the day trading above $28 for the 3rd consecutive week.
We are about to get some Federal Reserve members talking about their views on the economy and going by Fed Harker, they will be thinking US GDP could grow by 7% this year with inflation around 3%, which would be grounds to start tapering. Even in a very controlled, slow manner. Fed Harker is expecting job creation to pick up in the coming months but for pre-pandemic levels to return in a year’s time.
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The US dollar is hugging the $90 level again, which is keeping all of the other currency crosses with the greenback flat for the day. This Friday we have the non-farm payroll report, plus wage data, with market expectations of around an additional 600k to 1 million jobs. If the figure is less than the expected range, I am not sure how much more of this range bound trading we can take, and with the US dollar trend to the downside, I would hope for a sweep of the 2018 lows at least.
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Crude oil is steadily working its way from the recent trading range breakout, following on from the price action that occurred when OPEC+ decided to stick with the plan to increase the supply over the next couple of months at least. The ActivTrader sentiment indicator for the WTI contract is fairly balanced with 56% of traders shorting Oil, even though the trend has been higher for the last 7 months.
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Gold is now trading above yesterday’s opening and closing prices but has failed to break out of that day’s range. The daily chart shows the Ichimoku cloud support a lot further down towards the $1870 level. With no significant resistance from market structure until we get up to $1940-$1950 and the 2021 high print.
This week in 1933, the United States went off the gold standard, which was a monetary system in which the US dollar was backed by physical gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable. The US and other nations still had gold reserves and by 1971 US President Nixon stopped the convertibility of US dollars into gold which then birthed the fiat monetary system we still have today.
