News

Stock Futures Edge Higher, GDP Figures Eyed

Equities

Futures tied to major US stock indices marched higher during the Asian session supported by numerous factors. First, the corporate earnings season is very solid, US corporations had a great first quarter. Second, the Federal Reserve Chairman Jerome Powell reiterated that the printer will continue working until having substantial progress in the Labor market. Third, the Federal Reserve statement noted improvement in conditions on strong vaccination and policy assistance. Market participants are looking forward later today to the preliminary reading of the first-quarter GDP to have an insight into the economic recovery and inflation, in addition to the Initial Jobless Claims which rose much less than expected recently, the lowest since the beginning of the pandemic. The S&P500 futures hit an all-time high of 4204, the tech-heavy Nasdaq rallied to 14035, and Dow Jones Industrial Average futures rebounded to 33874.

USD

The dollar index which measures the greenback against a basket of major currencies recovered slightly to 90.67, as US yields moved north again ahead of crucial economic data. Investors are anticipating that the economic data will reveal a significant pickup in inflation, which would push yields higher. The Federal Reserve concluded its monetary policy meeting by keeping interest rates and asset purchases unchanged. The Fed has noted progress, due to strong vaccination and policy support, but mentioned that there is much work to be done before tapering, especially in the labor market. The Fed's comments weighed on the dollar, but the reversal in yields supported trimming losses. The USDJPY rose to 108.90, and the EURUSD eased to $1.2112.

Metals

Precious metals prices surrendered partial gains as US treasury yields and dollar recovered during the past hours. The price of a gold ounce dipped to $1777 after trading as high as $1790, the price of a silver ounce traded near $26.40, while palladium held near an all-time high at $2945.

Oil

Oil prices moved higher for the third consecutive day despite woes over virus spread in India and Japan. The US Energy Information Administration reported a buildup of only 90 thousand barrels in US crude oil inventories. The US solid economic recovery continues to drive energy prices higher. The West Texas Intermediate crude June contract rose to $64.50, and the Brent blend July contract rallied to $67.29.

Major Economic Events

GMT Country Event Expectation Previous

12:00

EZ

 German CPI (MoM) (Apr)  

0.5%

0.5%

12:30

US

 GDP (QoQ) (Q1) 

6.1%

4.3%

12:30

US

 Initial Jobless Claims

549

547

14:00

US

 Pending Home Sales (MoM) (Mar)

5.0%

-10.6%

 

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