Us equity markets traded in a subdued fashion albeit the major indices closed in the green. The financial sector managed to rally higher, looking to end the month on a high after a poor start. Exon managed to close the day higher by 1.5%, dragging the DJIA higher, after crude oil managed to break above the $50 mark. Overall the DJIA gained 0.2%, the S&P500 gained 0.29% and the NASDAQ 100 finished up 0.17% to print fresh record highs. In Asia, we saw mixed trading with the Nikkei 225 losing 0.1%, yet again failing to be buoyed by a falling JPY. The ASX 200 lost -0.3% while the Shanghai Comp managed to close in the green with a gain of 0.3%.
In Fx, the USD remains firm as the USD-Index, a measure of the strength of the USD against a basket of currencies, advanced higher beyond the 100 mark amid weakness in the EUR and the JPY while the GBP stayed fairly neutral throughout the day. The USD strength was supported by yet more hawkish rhetoric by FOMC members who hold steadfast on their positive outlook for the US economy and the subsequent tightening of momentary policy which is likely to take place this year.
In commodities, crude oil bubbled above the $50 mark as trader continue to feed of the supply cut news from the UAE and the lower inventory builds out of the US. Gold broke to the downside as bears managed to retake the 1250 mark and we expect, absent of any shocks, the trend to remain to the downside, at least in the short to medium term.
Today’s key data release are expected from the UK in the form of the Current Account, which is the difference in imports and exports made by the UK. A higher number implies more exporting, which is good for the pound, as traders price in the increased demand for the GBP to cover the costs of the trade. On the other hand, a lower than expect figure will see the GBP weakened as a higher importing factor will imply a larger supply of GBP into the market.
Out of the US we have several key releases and with the USD`s recent rise from the ashes, the continued strength of the USD is depended on these figures. Better than expected releases will see the USD push higher to end the week on a high while worse than expected releases will see the USD Index dip back below the 100-mark setting up bearish conditions for the week to follow.