US futures
- Dow futures +0.15% at 34758
- S&P futures +0.2% at 4370
- Nasdaq futures +0.3% at 14844
In Europe
- FTSE +0.11% at 7023
- Dax 0% at 15624
- Euro Stoxx -0.1% at 4050
A positive end to a choppy week
US futures are pushing higher on the open. Investors are brushing off news that the Biden administration will warn businesses over rising risks of doing business in Hong Kong and instead are focusing on better than forecast retail sales and a relatively upbeat start to earnings season.
The US banks have kicked off earnings season, most beat forecast on both earnings and revenue thanks in part to a surge in deal making. The low interest rate environment combined with businesses eager to reorganize and digitalise has sent deal making to record levels.
Retail sales rose by a better than expected 1.3% MoM in June, up from an upwardly revised -0.9% decline in May and well ahead of the -0.4% drop expected. Retail sales are notoriously volatile and this year this is particularly the case. As a result, its proving difficult to draw any strong trends for the data. The fact that it rose and firmly is a good sign for now. Jerome Powell said that the recovery still had a way to go. This is movement in the right direction.
Looking ahead Michigan consumer confidence data will be in focus.
Where next for the Nasdaq?
The Nasdaq refreshed its all time high earlier in the week before easing lower. Yesterday’s selloff took the index through its 50 sma on the 4 hour chart. The price is rebounding after finding support on the ascending trendline dating back to mid May. The MACD’s receding bearish bias is supportive of a move back over the 50 sma and back towards 15000. A break out of the ascending channel could prompt a deeper selloff to 14550.
FX – USD rises, EUR shrugs off in line inflation
The US Dollar is moving higher, extending gains from the previous session. The US Dollar is set to gain over 0.5% this week its strongest weekly gains in over a month, boosted by safe haven flows as delta cases rise and elevated inflation prompts speculation of the Fed tightening policy.
EUR/USD hovers around 1.18. Final Eurozone CPI came in as expected at 1.9% YoY in June, down from 2% in May. Concerns over the spread of the Delta variant are also dragging on sentiment for the common currency,
- GBP/USD -0.14% at 1.3810
- EUR/USD -0.28% at 1.1795
Oil set for 4% losses across the week
Oil prices are edging higher but are set for steep weekly declines. Both benchmarks are looking at losses of over 4% across the week. A compromise at OPEC paves the way for output increases to match surging demand as economies reopen.
Concerns over a rise in fuel inventories is also capping gains, particularly given that the driving season should be ramping up in the US around 4th July holiday.
- US crude trades +0.25% at $71.59
- Brent trades +0.13% at $73.14
Looking ahead
- 14:00 Fed Williams Speaks
- 15:00 Michigan Consumer Confidence
- 18:00 Baker Hughes Oil Rig Count
