Futures tied to major US stock indices recovered slightly as the European session started. Equity markets around the world had a sluggish sell-off post the Federal Reserve twist in tone. However, if we look at the bigger picture, the Federal Reserve will make sure not to hurt the economic recovery, thus protecting growth, the vaccination is still ongoing, and those drops are seen as good corrections by investors to join the bigger rally. The Dow Jones Industrial Average futures rose to 33271, the S&P500 futures recovered to 4166, and Nasdaq futures rallied to 14110.
The dollar index which measures the greenback against a basket of major currencies drifted lower to 92.15, as investors were seen taking some profits after a tremendous rally. The index gained more than 2% in three days, hitting 92.40, its highest level since early April. The shift in the Fed's tone over inflation, and the Hawkish dot plot boosted the dollar. The question remains whether the dollar can hold the gains, and add further in the week ahead, or retraces and this rally fades slowly. The EURUSD bounced to $1.1884, the GBPUSD recovered to $1.3832, and the USDJPY eased to 109.71.
Precious metals prices recovered slightly as the dollar surrendered partial profits. The price of a gold ounce rose to $1780, the price of a silver ounce bounced to $26.06, while palladium was almost unchanged near $2490.
Oil prices inched higher during the Asian session, resuming the prevailing trend, supported by several factors. The oil-demand recovery in the United States and the Euro area continued, with OPEC+ sticking to the output plan, while the world superpowers and Iran failed to reach a deal in their 6th negotiation session. Investors are looking forward to how the negotiations will develop with the newly elected president. The West Texas Intermediate crude July contract rose to $72.37, and the Brent blend August contract rallied to $74.20.
Major Economic Events
|12:30||EZ||ECB President Lagarde Speaks||-||-|
|19:00||US||FOMC Member Williams Speaks||-||-|