DOW futures are up, but the S&P 500, NASDAQ, Gold, Silver and Oil future are down. The dollar lifted to a one-week high by the measure of the DXY index, at 90.18, extending the rebound from the four-month low that was seen on Tuesday at 89.54. I don’t think this is a reversal of the bear trend.
This comes with 10-year Treasury yields having ticked higher, back towards 1.60% from yesterday’s lows near 1.55%, which were lowest levels since 22 April. Treasuries had perhaps gotten a little too rich, and the dollar a little too suppressed as key inflation data looms up on Friday, when the Fed’s preferred PCE deflator for April will be released.
Key Market Drivers
- U.S. data calendar includes Q1 GDP, weekly jobless claims, durable orders
- Canada data calendar is thin the reminder of the week
- Dollar firmer as markets anticipate key price data out of the U.S.
- Core EGB yields have moved higher with Treasuries, stocks struggled
- BoK left repo rate unchanged at 0.50% – as expected
Given the level sanguineness about inflation risk, the data posses as something of a positioning risk — though Fed policymakers can be countered on to downplay any spikes in the data, just as they did with the unexpectedly pronounced spike in April CPI data a couple of weeks back.
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The second revision of Q1 GDP data is also up today out of the U.S., alongside weekly jobless claims and April durable orders, all of which are expected to show robustness. The Q4 chain price outcome will interest given the inflation debate. Any upside surprises, especially in price data, may give longer dated Treasury yields and the dollar a lift, though such a reaction has already been discounted somewhat.
Global stock and commodity markets, meanwhile, have entered a sputtering phase. Oil prices have stalled shy of last week’s highs after rebounding from the sharp declines that was seen at the tail end of last week and into the early part of this week.
Cryptocurrencies have been relatively steady. Bitcoin dropped to near $37,000 after gains above $40,000 failed to sustain yesterday. The bitcoin “maximisers” or HODL (hold on for dear life) crowd, aka the “true believers”, remain undaunted by the recent sharp volatility and intensifying regulatory scrutiny.
The earnings calendar features Salesforce.com, RBC, TD Bank, Dell Technologies, Vmware, CIBC, Dollar General, HP, Veeva Systems, Best Buy Dollar Tree, Burlington Stores, Ulta Beauty, Gap, and Autohome.