Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Opening Bell: Futures Rise On Additional Central Bank Assurances; Gold Pops

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewMay 26, 2021 08:38AM ET
www.investing.com/analysis/opening-bell-futures-rise-on-additional-central-bank-assurances-gold-pops-200582416
Opening Bell: Futures Rise On Additional Central Bank Assurances; Gold Pops
By Investing.com (Pinchas Cohen/Investing.com)   |  May 26, 2021 08:38AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Fed and ECB officials join dovish chorus to ease market worries
  • Bitcoin back over $40,000
  • Oil could break out

Key Events

With Fed policymakers intensifying their efforts to downplay inflation expectations, on Wednesday, US futures for the Dow Jones, S&P 500, NASDAQ and Russell 2000 all advance along with European stocks.

Gold jumped and the dollar eased.

Global Financial Affairs

Fed Vice Chair Richard Clarida said the economy could absorb spiking inflation and that his central bank could handle it. San Francisco Federal Reserve President Mary Daly said in a CNBC interview that the economic rebound is encouraging, it is “way too early” to remove accommodation.

All four US contracts were in the green this morning, signaling the underlying indices could rebound from yesterday’s declines after home sales and consumer confidence data indicated higher prices were hurting demand, offsetting dovish reassurances from Fed members.

The STOXX Europe 600 Index climbed as ECB board member Fabio Panetta joined the Fed’s chorus, saying the ECB should not yet scale down its asset purchasing program. The pan-European benchmark added value for the fifth straight day, its longest winning streak of the year so far, putting a fresh record close on the table.

British retailer Marks & Spencer Group (LON:MKS) surged as much as 6.3% today, despite posting an 88% plunge in its annual profit. The stock touched its highest levels since March 2020, but settled at a 4.2% gain at time of writing, it's move courtesy of rebounding consumer demand.

Paris-based multinational food company Danone SA (PA:DANO) was down as much as 1.8% in early trade but appeared to have found its footing, closing the gap to 0.7% at of time of writing, after German investment bank Berenberg downgraded the stock to “sell,” citing the challenging low-growth nature of most of its categories.

DANO Daily
DANO Daily

The decline was in the form of a falling gap, which completed an Island Reversal top, suggesting at least a retest of the uptrend line.

Most of the Asian benchmarks climbed on Wednesady, with the exceptions of Australia’s ASX 200, (-0.3%), and South Korea’s KOSPI, (-0.1%).

On Tuesday, during the Wall Street session, US investors reconsidered the inflation-fears scenario, which weighed on US equities as all four major indices closed lower.

Fed Vice Chair Clarida noted that all the price pressures business executives and big name investment firms were cautioning about, and which have been warned about by the likes of Warren Buffet, will “prove to be largely transitory;" that statement has become something of a Fedspeak mantra.

Irrespective of the central bank assurances, some investors remain skeptical that the Fed can keep the lid on economic overheating.

After a four-day decline, yields, including for the 10-year note, have found their footing.

UST 10Y Daily
UST 10Y Daily

Rates have struggled at the bottom of a symmetrical triangle, whose natural inclination would be to resume its underlying uptrend. However, a downside breakout would flip the trend, allowing yields to continue lower along their falling channel.

The dollar rebounded from a two day drop.

Dollar Daily
Dollar Daily

The global reserve currency continues to struggle between a bearish pennant—indicating the potential resumption of the downtrend from a rising wedge developed from February to March—and a massive falling wedge developed between the March 2020 peak and February 2021.

Despite the market narrative of fading inflation concerns, gold jumped for the fourth out of five days, to its highest level since Jan. 7.

Gold Daily
Gold Daily

The yellow metal developed a full candle above its rising channel, suggesting it is breaking away from it, forming a steeper incline. Though some are waiting for it to hit $2,000, we would still expect a dip following the breakout of the massive falling channel, in place since the precious metal’s record peak in August, which included crossing over the 200 DMA.

Bitcoin is back above $40,000, having rebounded from a $30,000 low. After actualizing our bearish target, we've been bullish on the cryptocurrency.

BTC/USD Daily
BTC/USD Daily

The digital token has found resistance by the 200 DMA. Still, investors need to be careful.

While the H&S top reached its implied target, traditional measuring rules don’t apply to this digital asset. We might be wrong about our current bullish call, and it may simply be a return move toward the neckline at $45,000, after which persistent supply could once again knock BTC lower, pushing it back down for another, lower leg. Should Bitcoin fall below $29,000, we’ll reverse our bullish call.

There are now two conflicting narratives for oil: as summer driving season approaches, an “oil supply crunch” could develop, supporting prices, or, the “possible return of Iranian supply” could begin to weigh on prices.

Oil Daily
Oil Daily

WTI has been struggling within a range since February, but the pattern emerging is bullish, an ascending triangle.

Up Ahead

Market Moves

Stocks

Currencies

  • The Dollar Index was little changed
  • The euro fell 0.1% to $1.2237
  • The Japanese yen was little changed at 108.88 per dollar
  • The offshore yuan rose 0.4% to 6.3882 per dollar
  • The British pound fell 0.1% to $1.4135

Bonds

  • The yield on 10-year Treasuries advanced two basis points to 1.57%
  • Germany’s 10-year yield declined one basis point to -0.18%
  • Britain’s 10-year yield was little changed at 0.78%

Commodities

  • Brent crude rose 0.5% to $69 a barrel
  • Spot gold rose 0.3% to $1,905 an ounce
Opening Bell: Futures Rise On Additional Central Bank Assurances; Gold Pops
 

Related Articles

Jeffrey Halley
The Dust Settles By Jeffrey Halley - Jul 27, 2021

An air of calm has returned to Asian markets today after the China equity sell-off after escalating government clampdowns on the technology and education sectors. Helping things...

Ashraf Laidi
Pivotal Week Continues By Ashraf Laidi - Jul 27, 2021

by Adam Button Before we inform you how how busy the rest of this week will be, it's worth mentioning the positive technical developments in cryptos. Cardano and Bitcoin managed to...

Opening Bell: Futures Rise On Additional Central Bank Assurances; Gold Pops

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
William Bailey
William Bailey May 26, 2021 9:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The 120 b in credit creation is more psycholgical ... it gets gobbled up by crypto undulations in a couple days
Mukhtiar Khan
Mukhtiar Khan May 26, 2021 8:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
holle
Jose Maderno
Jose Maderno May 26, 2021 7:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good article.  Thank you. This is all sbujective, but interesting that the New York Fed issued a statement on May 13th stating: "As a result of these changes, the allocation across the 7- to 30-year nominal coupon maturity range will increase by 3 percentage points, in line with shifts in the distribution of Treasury securities outstanding." Interesting the 10 year has started to behave....and the dollar weaken...and gold reversing Operation twist anyone?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email