STATE OF THE MARKETS
Dow, S&P500 punched new record high. US stocks advanced further on Monday, with all major indexes in the green, sending Dow (+0.18%) and S&P (+0.47%) to new record highs as better than expected earnings continue to fuel the rally. Dollar (DXY) was firm above the 93.80 mark as yields continued to rise with the 10Y benchmark continuing to flirt around 163 basis points.
In the commodities market, crude spiked to $85.40/bl before settling lower around $83.75/bl as traders continue to book profits off the table. Gold advanced further, but remained capped below $1,820/oz, as inflation worries continue to strangle investors. Elsewhere, iron ore climbed back to $122 handle as talks about the US infrastructure bill continue.
In the FX space, Aussie and Euro were seen synching across all horizons, signaling the low in EUR/AUD might be near. Medium term accounts seemed more cautious as Yen was flipped to demand while Loonie was sent to offers. Long term sentiments were little changed. Markets look for home sales and earnings reports from 3M (MMM), Advanced Micro Devices (AMD), Alphabet (GOOGL), General Electric (GE), Microsoft (MSFT), Twitter (TWTR) and Visa (V) among others.
OUR PICK – EUR/CHF
Re-entry on SNB intervention. Recent SNB sight deposits reports showed a continuing increase of about 200m to 1b CHF in FX liabilities, suggesting SNB intervention in the FX markets. Short term traders, as our sentiment model suggested, were already positioned to ride on to the next leg higher. Risk remains however that medium and long term accounts sentiments might cap upside rally. We keep an open target to maximize upside rally if any.
Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.