Hawkish expectations of the Federal Reserve and pessimism on global growth continue, boosting the US Dollar and sending stock markets firmly lower.
- The US Dollar has advanced strongly over the past day on hawkish market sentiment, with the US Dollar Index and 2-Year Treasury Yield reaching long-term highs. This is a strong, long-term trend. The Dollar made a 24-year high in the USD/JPY currency pair, and the GBP/USD currency pair reached its lowest level since the coronavirus panic in March 2020 below $1.1600. These price movements should be attractive to trend and breakout traders as they are likely to continue over the coming days. The Dollar is advancing everywhere, but the Euro is showing some notable relative strength as speculation continues to mount that the ECB will hike by 0.75% at its next meeting and buyers are found below the parity level in the EUR/USD currency pair.
- The S&P 500 Index and the NASDAQ 100 Index both closed firmly lower yesterday and have continued to fall during the Asian session. Asian stock indices such as the Nikkei 225 Index are also lower over the Asian session.
- Yesterday’s ADP Non-Farm Payrolls Forecast suggested that only 132k net new jobs were created in the US last month, while analysts had been expecting about 300k. If confirmed by the real data this Friday, it would be a significant undershoot and suggest the US economy is slowing.
- There will be two key data releases today: Swiss CPI (inflation) and US ISM Manufacturing PMI data.
- Daily new coronavirus cases globally dropped last week for the sixth consecutive week.
- It is estimated that 67.7% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.7% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
- Total confirmed new coronavirus cases worldwide stand at over 608.1 million with an average case fatality rate of 1.07%.
- The rate of new coronavirus infections appears to now be most significantly increasing in Haiti, Taiwan, and Russia.