US open: Futures edge higher but momentum slows
Fiona Cincotta August 24, 2021 8:43 AM
US futures pare an earlier rally. Investors continue weighing up rising covid cases, vaccine developments whilst looking ahead to the Jackson Hole Symposium.
Dow futures +0.1% at 35380
S&P futures +0.1% at 4484
Nasdaq futures +0.1% at 15336
FTSE -0.4% at 7109
Dax +0.12% at 15888
Euro Stoxx -0.12% at 4170
Early rally eases
US stocks are heading for a mildly positive open as investors continue weighing up the risks of rising Delta covid cases and the chances of the Fed signaling the tightening of monetary policy at the Jackson Hole symposium later this week.
The positive sentiment after the FDA fully approved the Pfizer vaccine is seeing some follow through buying, although the upbeat mood is starting to wane. A decent bout of dip buying after last week’s sell off has lifted the Nasdaq to a fresh record high in the previous session.
Investors continue to position ahead of the Jackson Hole economic forum with investors weighing up the potential timing of the Federal Reserve’s next move. Bets have eased that the Fed will move towards tapering bond purchases. The weaker than forecast PMI data under pinned this belief in the previous session sending the US Dollar sharply lower and equities higher.
There is little on the economic calendar today to drive trading. Trading could become more subdued over the coming session with few looking to take out big positions ahead of such a potentially market moving event.
Where next for the Nasdaq?
The Nasdaq looks to fresh all-time highs. The index trades within its year long ascending channel. The index has broken out of its recent consolidation pattern in a bullish move bringing the upper band of the channel at 15700 into focus as a potential target. It would take a move below 15150 to negate the new bullish bias. A break below 14760 could open the door to 14450 the July low.
FX – USD steady after steep losses
The US Dollar is licking its wounds after steep losses in the previous session. The greenback fell sharply after the Jackson Hole Symposium was moved online due to rising covid cases. This prompted investors to ease off on bets that the Fed will tighten monetary policy sooner rather than later. Weaker than forecast PMI data further underpinned the theory.
EUR/USD holds steady in quiet trade despite German economic growth being upwardly revised. German GDP for Q2 came in at 1.6% QoQ, up from the previous estimate of 1.5%. On an annual basis GBP rose to 9.4%, up from 9.2%.
GBP/USD -0.02% at 1.3712
EUR/USD -0.06% at 1.1737
Oil extends gains on vaccine optimism
Oil prices are extending yesterday’s bounce. Oil rallied 5% in the previous session following news that the FDA gave full approval to the Pfizer covid vaccine. The move boosted optimism that more people will take the vaccine, boosting mobility and reducing the chances of further lockdowns even as covid cases rise.
China singing victory over its latest covid wave is also boosting the demand outlook.
API crude oil inventory data is due later today.
US crude trades +1.7% at $66.72
Brent trades +1.8% at $69.65
15:00 New Home Sales
21:30 API Crude Oil Inventories
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
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.