News

U.S. Stock Futures Rally, Inflation Data Eyed

Equities

Major US stock index futures extended their upside rally boosted by the infrastructure plan. President Biden announced that the Republicans and Democrats reached a deal over the new infrastructure plan. The plan exceeds $1 trillion, with $579 billion going to new spending on transportation. However, both parties still need to finalize how to pay for the plan. Various paying methods were presented, which avoid increasing the gas tax or the corporate tax rate. On the other hand, investors remain optimistic over the economic recovery, where the final reading of the first quarter GDP printed 6.4%. The Dow Jones Industrial Average futures rose to 34238, the S&P500 futures rallied to a record 4262, and the Nasdaq futures touched an all-time high of 14419.

USD

The dollar index which measures the greenback against a basket of major currencies continued to trade in a tight range near 91.70 awaiting fresh fundamental drivers. Market participants are looking forward to the inflation data later today, where an upbeat reading could raise the chances of the Federal Reserve acting sooner than anticipated, which could be dollar positive. The EURUSD hovered near $1.1945, the GBPUSD slipped to $1.3920 following a dovish Bank of England meeting, and the USDJPY fell to 110.75.

Metals

Precious metals prices continued to trade in a tight range as investors awaited further inflation data. The price of a gold ounce remains stuck in a range between $1770 and $1794, the price of a silver ounce traded slightly above $26, and palladium continued to recover, rising to $2656.

Oil

Oil prices traded sideways as investors look forward to the OPEC+ meeting and their plan of raising output. The global economic activity is picking up and supporting oil-demand recovery. However, oil producers are preparing to increase their production to the pre-pandemic levels, which could hurt the current upside rally if happened rapidly. The West Texas Intermediate crude August contract held steady near $73.35 after testing $72.31, and the Brent Blend August contract hovered near $75.58.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

 Core PCE Price Index (MoM) (May)

0.6%

0.7%

12:30

US

 Personal Spending (MoM) (May)

0.4%

0.5%

14:00

US

 Michigan Inflation Expectations (Jun)

4.0%

4.6%

 

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