Investors Focused on Economic Releases This Week
US futures and European stocks struggled to find direction on Monday, after data coming from China showed that its economic recovery is not as robust as everyone would wish. Investors continue mulling over global inflation risks.
Deutsche Bank AG dropped after the Federal Reserve found its compliance programs wanting. The Stoxx Europe 600 index was destabilized at the open by Deutsche Bank’s decline. Contracts on the S&P 500 and Nasdaq 100 crawled higher. Trading hours are shortened today in the US because of the Memorial Day holiday. There is also no Treasuries cash trading day on Monday, since the 10-year yield sank below 1.60% on Friday last week. It is a Bank Holiday today in the United Kingdom.
Asian stocks were low on Monday. Japanese shares showed poor performance, weakened by the extension of the emergency state in the country proclaimed to rein in the spread of coronavirus. Stocks dipped in Hong Kong. Markets were mixed in China, after the latest data had shown that the recovery of its economy is worse than expected. Investors fear that China’s economic revival has already passed its highest point and now will continue at a slower pace.
Nethertheless, global stocks have been trading near a record level, buoyed by the global recovery from the coronavirus pandemic and injections of stimulus. Because global stocks have been on the rise, investors were less worried that price pressures would lead central banks to reduce their support. Meanwhile, investors are awaiting the release of the US non-farm payroll reports this week. The report will serve as a measurement of the present strength of the American economy.
Despite investors’ negative opinion about the offshore yuan’s appreciation, the Chinese currency stabilized. China set its daily reference rate at a weaker-than-expected mark. The US dollar was also steady. Crude oil moved higher. Bitcoin was wavering around the $35,000 mark, after dropping during the Friday session on the Bank of Japan’s warning against the cryptocurrency’s volatility and traders’ speculations.
These are the major movements in markets that investors should watch on Monday:
During the early session in London, the Stoxx Europe 600 was little changed. Nasdaq 100 futures inched 0.2% higher. S&P 500 futures advanced 0.2%. The MSCI Asia Pacific Index climbed 0.3%. The MSCI Emerging Markets Index gained 1.0%.
The US dollar Index was flat. The euro traded at $1.2196, virtually unchanged. The Japanese yen edged 0.1% higher against the dollar. The offshore yuan remained unchanged, trading against the US dollar at $1.4182. The GBP was unchanged, too, trading at $1.4182. AUD/USD was little changed, trading at 0.7736. The USD/CAD decreased a minor 0.07%, trading at 1.2067. USD/CHF inched 0.03% higher to trade at 0.9002.
Brent crude soared 0.% to trade at $69.00 a barrel. WTI added 0.74% to $67.06. Spot gold was 0.1% higher, trading at $1,905.58 per ounce. Silver gained 0.29% to 28.10 per ounce. Platinum added 0.43% to $1.189.50 per ounce. Copper advanced 1.65% to $469.40.
Germany’s 10-year yield rose three basis points to -0.16%, while Britain’s 10-year yield dropped two basis points to 0.79%.
These are the significant market events that traders should watch this week:
- U.S. markets will be closed for the Memorial Day holiday. U.K. markets will be closed for the Spring Bank holiday.
- The Reserve Bank of Australia policy decision is made on Tuesday.
- OPEC and allies meet to review oil production levels on Tuesday.
- Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic, and Dallas Fed President Robert Kaplan speak on Wednesday.
- The U.S. employment report for May is due on Friday.
Have a productive trading day!