Dollar gained amid rising yields. US stocks closed flat on Monday, with Dow (-0.04%) and Nasdaq (-0.04%) edging lower while S&P remained unchanged, as yields and Dollar continued to rise. The 10Y benchmark climbed back to 1.63% while the long dated 30Y was back above 200 basis points. Dollar was trending higher at writing, approaching the 95.50 minor handle.
In the commodities market, crude was on firm bids, closed above $80.85/bl, though opened lower on Tuesday amid Dollar strength. Gold shed earlier gains on profit taking, though remained above $1,850/oz as rising inflation continued to plague investors. Elsewhere, iron ore closed lower to $92.36/tn as markets await signature on the US infrastructure bills.
In the FX space, Euro, Swiss and Loonie were seen synching across short and medium term accounts, signaling turning around in sentiments. Demand in the safe havens were noted reduced as investors used the oversold bid to bid higher yielding Kiwi and Loonie. On Tuesday markets look for earnings reports from Home Depot (HD), Netease (NTES) and Walmart (WMT); on top of retail sales and industrial production.
OUR PICK – GBP/USD
Riding on block orders. After three weeks of losses, a decent size of Sterling block orders were observed around London closing on Monday, potentially signaling profit taking and a pause in the downtrend. We intend to ride the counter trend for the short term.
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