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- The weak risk-on rally in global markets continued Monday, in the absence of any major scheduled data releases. The positive environment is driven partly by the strong US jobs data released last Friday, and positive Chinese export data released a few hours ago. However, optimism may be tempered by a growing list of major financial institutions (including Goldman Sachs, Barclays, and Standard Chartered) warning of a more hawkish outcome regarding the Fed’s timing of any rate hike pause and future rate cuts.
- Stock markets are mostly bullish, and the Nikkei 225 Index has risen strongly to reach a price very close to its long-term high.
- In the Forex market, the US Dollar has risen a little against its long-term bearish trend. The Japanese Yen is showing the greatest short-term strength while the Euro is the weakest currency. The long-term bearish trend in the US Dollar remains valid, and trend traders may also be looking for long trades in the EUR/USD and GBP/USD currency pairs, both of which are recently tested long-term highs.
- Precious metals are performing strongly after Gold reached a high price just below its all-time high of $2,070 last week.
- Some soft commodities have been breaking to new highs and trending strongly, notably the Sugar ETF Cane which ended the week with a strong rebound, and the Cocoa ETF NIB.
- Governor Ueda of the Bank of Japan stated there are encouraging signs in Japan’s long-running struggle to reflate, mostly rising inflation expectations.
- It is likely to be a relatively quiet day in the markets as there are no high-impact data releases due.