US open: Stocks rise as bond yields hit monthly low

US stocks are set for another fairly subdued start as US treasury bond yields continue to fall even as inflationary pressures appear to be building.

Trader 1

US futures

Dow futures +0.02% at 34604

S&P futures +0.2% at 4236

Nasdaq futures +0.34% at 13856

In Europe

FTSE -0.4% at 7073

Dax -0.45% at 15582

Euro Stoxx +0.02% at 4096

Learn more about trading indices

Stocks rise, tech leads as bond yields fall

US stocks are set for another fairly subdued start as US treasury bond yields continue to fall even as inflationary pressures appear to be building. Either way inflation remains the key focus for the weary market ahead of tomorrow’s US CPI data.

Yesterday’s JOLTs job openings revealed 9.3 million openings, up by 1 million highlighting an inability of firms to fill roles. With over 8 million fewer workers in the workforce than pre-pandemic companies may well need to start hiking wages into order to attract workers, pointing building inflationary pressures.

Chines CPI rose 1.3% YoY, this was up from 0.9% in April, although missed forecasts of 1.6%. PPI, however, surged to a 13 year high of 9% YoY in May, well up from 6.6% in April and ahead of forecasts. These price increases could potentially trickle out across the globe.

Yet with US treasury yields at the lowest level in a month as inflation fears are calming in the market and bets of an earlier move by the Fed easing. High growth tech stocks which are most sensitive to interest rate expectations are set for a stronger start with the Nasdaq futures set to outperform US major indices.

Equities

So called meme stocks remain very much in focus with Clover Health the latest to become the retail traders’ favorite. The stock trades 22% pre-market after 86% gains yesterday.

GameStop is due to report after hours.

Where next for the S&P?

The S&P is edging higher as it trades under 15 points from its all time high. The move higher is slowing although there is little to suggest that it won’t break through 4245 to hit fresh all time highs. It would rake a move below 4155 the confluence of the 50 sma and the ascending trendline dating bavck to November to negate the near term uptrend. A break through here could see the price drop towards 4035 the May low and the 100 sma.

Source: StoneX, TradingView

FX – USD edges higher, EUR digests mixed bag of data

The US Dollar is edging lower, tracing treasury yields southwards as expectations of a move by the Fed eases, despite signs of inflationary pressures growing.

GBP/USD is advancing after BoE Chief Economist pointed towards tapering support. Haldane saw the UK economy firing on all cylinders, with price pressures building. His bold statement to reduce support comes as he is leaving the BoE shortly. Brexit concerns are acting as a weight on the currency amid worsening relations between Britain and the EU.

GBP/USD +0.15% at 1.4176

EUR/USD  +0.18% at 1.2195

Oil rises, WTI breaches $70

Oil is extending gains from the previous session amid an improving demand outlook and as concerns over Iranian oil flooding back into the market ease. WTI crude oil pushed through $70 for the first time since 2018.

Rapid vaccine rollouts in the West and the easing of lockdown restrictions, combined rising optimism of a strong driving season in the US and Europe are boosting demand expectations. The EIA upwardly revised its oil demand outlook for the US to 1.49 million barrels per day, up from 1.39 million barrels. Adding to the upbeat mood API data revealed a draw in crude oil stockpiles of 2.1 million as expected.

Separately the US Secretary of State calmed fears of Iranian oil re-entering the market by saying that even if the nuclear deal was revived with Iran, hundreds of sanction would remain in place.

EIA crude stockpile data is due later.

US crude trades +0.4% at $70.25

Brent trades +0.5% at $72.45

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

15:00 BoC Rate Decision

15:30 EIA Crude Oil Inventories


More from Indices

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.