US Stocks Push Higher Again – Dow up 0.5%
US stock markets finished the day nicely higher after a choppy trading session in which fears that President Trump might fire Fed Chair Jerome Powell hit the wires before being pushed back. The Dow closed up 0.53%, the S&P up 0.32%, and the Nasdaq added 0.25% to record another all-time high. Treasury yields and the dollar took a hit on the Powell rumours and a lower PPI print. The 2-year yield lost 4.8 basis points to move back down to 3.892%, and the 1-year lost 2.6 basis points to fall to 4.455%, while the dollar fell against the majors, the DXY down 0.36% to 98.29. Oil contracts closed close to flat as US inventories fell, Brent down 0.01% to $68.70 and WTI up 0.17% to $66.63 a barrel. Gold prices jumped as haven flows increased, up 0.68% to $3,346.23 an ounce.
Gold Set to Shine More on Political Uncertainty
Gold traders are bracing for more volatility in the days and weeks ahead as more political uncertainty in the US leads to haven flows into the world’s favourite precious metal. Gold spiked nearly $40 in trading yesterday as rumours hit the wires that President Trump may fire Fed Chair Jerome Powell, and even though it retreated fairly swiftly on denials, market players feel there is no smoke without fire in this situation, and if it comes to fruition, we could see some big moves higher. Trump has not been quiet about his thoughts on the Fed Chair, and traders feel that if Powell leaves before the end of his tenure, then we will see a run on haven products and a sharp decrease in the dollar, which could take gold back to all-time record levels. Trendline resistance is now sitting around $3,421, and a break of this will see that all-time high just above $3,500 come under threat swiftly, with some calling for a $4,000 level by the end of the year if we do see changes at the Fed.
Data to Hit Markets Again Today
It is another busy calendar day ahead for traders today, with key data releases scheduled across all three trading sessions. Australian markets will be in focus early in the Asian session today, with key employment data set to drop. Markets are expecting to see a 21k increase in jobs in the last month, with the unemployment rate remaining steady at 4.1%. Employment figures are due out of the UK early in the European session today, and traders are expecting to see strong moves in the pound if we see prints off expectations, with the Claimant Count expected to increase by 17.9k and the Unemployment Rate to stay at 4.6%. The New York session also has more tier-1 data due out today: Retail Sales (exp +0.1%), Core Retail Sales (+0.3%), and the Weekly Unemployment Claims (233k) numbers are all out alongside the Philly Fed Manufacturing Index (exp -1.2), and investors are expecting more volatility around the updates.
