US open: Futures edge higher ahead of Fed Powell's testimony
Fiona Cincotta June 22, 2021 8:46 AM
After strong gains in the previous session, Wall Street is heading for a quietly positive start with most preferring to stay on the sidelines ahead of Fed Powell's testimony before Congress.
Dow futures +0.05% at 33900
S&P futures +0.11% at 4228
Nasdaq futures +0.18% at 14162
FTSE +0.3% at 7087
Dax +0.2% at 15620
Euro Stoxx +0.1% at 4114
All eyes to Fed Powell
After solid gains in the previous session, US stocks are pointing to a mildly stronger start as investors weigh up the prospects of further economic growth against inflation concerns. Whilst the Dow gained an impressive 1.8% in the previous session trading ahead of Fed Powell’s testimony before Congress today is likely to be subdued.
In pre-released remarks, Powell once again reassured those inflationary pressures will be transitory whilst also expressing optimism surrounding the outlook for the economy. These comments sound familiar but the6y come against a backdrop of a surprise hawkish shift in the Fed seen last week.
The Fed now expects 2 interest rate hikes before the end of 2023.
Gamestop trades +8.4% pre-market after raising $1.1 billion in an offering of 5 million shares as the troubled video game retailer cashes in on the surge in its stock price this year.
Torchlight Energy trades 4.1% higher pre-market, adding to 50% gains yesterday as it becomes the latest stock to catch the attention of retail investors.
Where next for the Nasdaq?
The Nasdaq trades above its 50 & 100 sma on the 4 hour chart. It also trades above its month old ascending trendline in a bullish trend. Aftter slipping briefly below the 50 sma in the previous session, the fact that the Nasdaq has broken back above resistance at 14077 adds to the suggestion that there could be more upside to come. A break above 14209 would bring fresh all time highs. Its worth noting the RSI bearish divergence could suggest that the move higher is running out of steam. 14077 offers support now and a move below 14000 could negate the near term uptrend.
FX – USD rises, GBP eases despite better than forecast gov borrowing data
The US Dollar is one the rise, clawing back some of yesterday’s losses. US Dollar price movement has been volatile since the Fed’s hawkish surprise last week when it suggested that there could be two interest rate rises in 2023. All eyes are now on Fed Powell for further clues as to how transitory the spike in inflation might be.
GBP/USD is paring gains from the previous session. Sterling trades under pressure despite the public sector finances improving. Public sector net borrowing came in at £24.3 billion in May, down from £31.7 billion in April and better than the £26.1 billion forecast. The reopening of the economy means that tax receipts have picked up, furlough number have declined and government spending on supporting the economy slowed slightly. Whilst this is an improvement it is still the second highest level of net borrowing in May since record began.
GBP/USD -0.3% at 1.3893
EUR/USD -0.2% at 1.1897
Oil eases lower on USD strength
Oil prices are edging lower on Tuesday after booking solid 2% gains in the previous session. Oil rallied following comments from the newly elected Iranian President which suggested that he could put the brakes on the US – Iranian nuclear talks. As a result, the prospect of the US lifting sanctions on Iranian oil and it flooding back to the market faded.
A strong demand outlook continues to under pin the price of oil as economies reopening and travel picks up. However US Dollar strength is just taking the edge off demand for the black gold.
API inventory data will be in focus later after big draws on stocks piles were recorded last week.
US crude trades -0.7% at $72.56
Brent trades -0.6% at $73.73
15:00 US Existing Home Sales
15:00 Eurozone Consumer Confidence
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.