Today was an east west divide, with the Hang Seng, Nifty 50, Nikkei 225 and Shanghai Stock Exchange ending their days higher, while at the London close the Dow Jones Industrial Average, Nasdaq 100, S&P500, FTSE100 and DAX all traded lower on the day. The moves for the end of the month are relatively small but the day’s trading range on the Nasdaq at least was quite large due to a continuation higher in the overnight session before a hefty dip at the US futures open.
The forex markets were more mixed with the Swissy rebounding after a terrible start to the week and the Aussie and Kiwi also keeping their relative strength from the overnight session through the following London session into the US session. The Canadian dollar bucked the commodity pairs trend as it fell on the back of worsening GDP data.
The Canadian GDP growth rate fell for the 3rd consecutive month but this time into contraction, missing estimates of an 0.6% expansion.
Data from the US today included the Consumer Sentiment Index which came in under analysts’ expectations declining to the lowest level since February. “Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favourable view of current economic conditions and short-term growth prospects,” Conference Board’s Senior Director of Economic Indicators Lynn Franco commented.
US house price did however rise at record pace according to todays Case-Shiller 20-city home price index. Year-over-year readings came in at 19.08%.
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The US dollar index has bounced off the daily 50 ema and is looking likely to finish the day flat. As it swept the lows of the previous swing low, I am tempted to say that is a bullish signal for now and that the liquidity gathered there would be ideal to start a momentum move for a test towards the recent highs. The 20, 50 and 200 ema are all stacked in a bullish manner so medium term to long term direction is still to the upside, but the break of market structure is hinting for a lower high to form.