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    Commodities Continue Rallying, Nasdaq Drops on Inflation Fears – May 10

    European Markets Flat, Australian Stocks at All-Time High

    Nasdaq futures sank on Monday, pressured by the growing prices of commodities and prospects of inflation. If inflation happens, it will put tech revenues at risk and will arrest the global recovery from the pandemic. Unlike Nasdaq futures, contracts on the S&P 500 Index remained steady. Treasury yields added 1.60%, while investors looked forward to an eventful week of auctions. 

    The price of gasoline climbed 4.2%, thereby reaching the three-year high. Afterwards, when cyber attackers stole data from Colonial Pipeline, gasoline retreated. Iron ore futures jumped, whereas copper set a new record, unnerving investors concerned with inflation. The rise of raw materials is heating up the debate ahead of a US CPI report this week which is expected to show that price pressures increased in April. 

    China’s onshore yuan reached its strongest level against the greenback since 2018. The British pound soared to a 10-week high after UK elections disallowed Scotland’s main independence party an overwhelming majority and lent more strength to the Conservatives. 

    European markets were flat early in the morning on Monday. The FTSE inched 0.01% higher. The DAX in Germany shed 0.1%. The French CAC was 0.2% lower. Among Asian markets, Australian stocks soared to an all-time high, climbing 1.30%. Markets in Hong Kong and China slid. Hang Seng gave up 0.05%. The Nikkei advanced 0.5%, while the Topix was 0.9% higher. 

    These are the major moves in the markets traders should watch on Monday:

    Stocks

    Futures on the S&P 500 Index edged 0.1% higher during the morning session in London. The Stoxx Europe 600 Index advanced 0.1%. The MSCI Asia Pacific Index rose 0.5%. The MSCI Emerging Market added 0.2%. 

    Currencies

    The euro slipped 0.2% to $1.2143. The British pound gained 0.6% to trade at $1.4066. The onshore yuan surged 0.1% to 6.429 per dollar. The Japanese yen gave up 0.3% to trade at 108.93 per dollar. Other major currencies were little changed. AUD/USD changed hands at 0.7873, up 0.002%. The USD/CAD pair inched 0.001% lower at 1.2120. USD/CHF traded at 0.9009. 

    Commodities

    West Texas Intermediate crude surged 0.7% to $65.33 a barrel. Brent crude gained 0.7% to trade at $68.73 a barrel. Gold added 0.2% to $1,835.08. Silver advanced 0.33% to $27.81 per ounce. Platinum climbed 0.95% to trade at $1.267.92. Copper soared 2.58% to $487.10. 

    Bonds 

    The yield on 10-year Treasuries gained one basis point to 1.59%. The yield on two-year Treasuries retreated less than one basis point to 0.14%. Germany’s 10-year yield jumped one basis point to -0.21%. Japan’s 10-year yield sank less than one basis point to 0.087%. Britain’s 10-year yield climbed two basis points to 0.799%.

    These are the main market events traders should watch this week:

    • Several Federal Reserve speakers are giving speeches this week, including Chicago Fed President Charles Evans expressing an opinion on the economic outlook on Monday and U.S. Fed Governor Lael Brainard speaking on Tuesday.
    • Chinese inflation data are due on Tuesday.
    • OPEC monthly Oil Market Report is published with global demand forecasts and production estimates on Tuesday.
    • U.S. CPI report published on Wednesday is forecast to show prices continued to increase in April.
    • The Bank of England Governor Andrew Bailey speaks on Wednesday.

    Have a productive trading day!

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