Stock and forex markets hesitant

Intermediate

Macroeconomic/ geopolitical developments

  • Inflation concerns remain, after the recent spike in US CPI data.
  • The Fed Minutes on Wednesday highlighted an improving US economy but still far from the Fed’s goals, this did not have a significant impact on global financial markets.
  • Tensions in Gaza have eased with an Israel-Hamas ceasefire announced.
  • The Indian COVID variant continues to spread in the UK and Europe, though still without a significant impact on death rates.
Indian covid variant

Global financial market developments

  • Global stock averages were mixed last week, but still capped below record and multi-month highs.
NASDAQ chart
  • Big Tech has again underperformed, with inflationary fears limiting upside for this sector.
  • The US Dollar was mixed but remains on the back foot.
dxy chart
  • The Euro was indecisive but did manage to post gains versus the USD.
  • GBPUSD spiked close to the multi-year high.
  • Gold pushed higher, leaving an upside bias.
  • Oil sold off but managed to bounce late in the week.
  • Copper also corrected lower from a mid-May multi-year high, bounced into the end of the week.

Key this week

  • Geopolitics:
    • Monitoring easing of lockdown measures, notably in Europe.
    • Still looking at COVID-19 cases, hospitalisations and deaths globally, plus the spread of the Indian variant in the UK and Europe.
    • Looking for the ceasefire in Gaza to hold.
  • Central Bank Watch:  A quiet week for central banks, with the Reserve Bank of New Zealand (RBNZ) interest rate decision, statement and press conference on Wednesday.
  • Macroeconomic data: Also, a quiet data week with the US GDP, Durable Goods Orders and Personal Consumption Expenditure (PCE) the standouts on Thursday and Friday. See the table below for details and more.
DateKey Macroeconomic Events
24/05/21Nothing of note
25/05/21German GDP and IFO
26/05/21RBNZ interest rate decision, statement and press conference
27/05/21US GDP, Durable Goods Orders and PCE
28/05/21Japan CPI; US PCE and Michigan Consumer Sentiment

Editor in chief

Steve Miley is the Market Chartist and has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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