The new trading week started with the dollar retracing little of Friday’s jump. This coming together with fast recovering equities highlighted the mixed-mood of the market. Meanwhile, Bitcoin and the entire crypto market are yet to stage significant rebounds as investors’ confidence weakens.
Last Week Recap
The last FOMC minutes and Friday’s better-than-expected PMI resurrected the dollar in the second half. The greenback was set to end the week red again but brilliant PMI figures indicated an accelerated growth in May. Also, some policymakers in the last FOMC minutes are already creating room for tapering if the current recovery continues to maintain this pace and inflationary pressures persist. The dollar index quickly jumped above 90 but has dipped slightly below in Monday’s Asian market.
Meanwhile, equities took back most of the last week’s losses and have continued this week to catch up. The S&P is close to 4180 early at the London opening. The treasury yield closed the last week bearish around 1.6% after an early advantage. However, it has remained sideways thus squeezing Gold between the 1875 resistance and 1890. Oil prices resume Friday’s rally with WTI up by over 4% toward $65.
Despite a very active market in the last week, cryptos continue to steal the headlines. Bitcoin couldn’t sustain the over 40% recovery to $43,000 as it fell below $32,000 during the weekend. However, another rebound is ongoing above $35,000. It remains to be seen whether a sustained recovery above $45,000 will happen this week. Ethereum gained over 4% in the last 24 hours to jump above $2,000. However, Ripple remains below $1 while Doge exchanges for a little above 33 cents.
Meanwhile, Polygon leads the gainers in the last 24 hours with over 42% recovery while Stellar Lumen and IOTA are some of the top 20 that have gained significantly in the same period. Despite the current recovery, Bitcoin is behind by 18% in the last 24 hours. The crypto market has shed over $1 trillion since the current onslaught started although Bitcoin dominance surged to 45%.
Looking ahead in the week, bank holidays in the Eurozone and Canada on Monday might slow the market momentum. However, BOE Governor Bailey’s speech might add something to the current GBP rally. The Sterling benefits from the current economic recovery in the UK supported by the re-opening and rapid vaccination efforts despite the new Indian variants. The market will also look up to the speeches of FOMC members Brainard and Bostic
On Tuesday, FOMC member Evans will speak. Investors will decipher the depth of the tapering consideration in the last minutes. Also, low-impact economic releases in Japan, Eurozone, the US, Canada, UK and New Zealand are something to look up to as better or worse figures might influence the decisions of the policymakers.
On Wednesday, New Zealand’s RBNZ rate statement will dominate headlines before speeches from FOMC member Quarles. Crude oil inventories is something to watch out for for commodities traders.
The US quarterly prelim GDP data together with home sales data and unemployment claims on Thursday could drive the dollar at the end of the week.
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