In the coming days, investors will be keeping an eye on Federal Chair Powell
After last week’s spectacular rally, US stocks saw modest gains on Monday, with investors waiting for the next bullish catalyst. The Nasdaq added 0.3%, the S&P 500 gained 0.18% and the Dow Jones advanced just 0.1%. The tech-heavy index notched the seventh day of gains in a row for the first time since January. It looks like the market is pausing after strong gains in anticipation of fresh catalysts that will set further direction for equities. Ahead of the weekend, Wall Street stocks were boosted by a soft monthly jobs report. Nonfarm payrolls increased by 150,000 last month against the consensus forecast for a rise of 170,000.
Despite positive close on Wall Street, Asian equities were mostly lower on Tuesday. Tokyo’s Nikkei 225 dropped 1.37%, the Hang Seng in Hong Kong gave up 1.7%, and the Shanghai Composite index slipped 0.04%. Australia’s S&P/ASX 200 fell 0.29% after the country’s central bank raised its key interest rate for the first time since June. Bank Governor Michele Bullock, who has not ruled out a further rate rise, said her board did not expect inflation to fall within that range until late 2025.
In another sign of a stalling upside momentum, European equities opened lower today, with the Stoxx 600 index falling 0.24% at the start of the session. The oil and gas stocks dropped after Saudi giant Aramco reported an unexpectedly strong profit decline. In the coming days, investors will be keeping an eye on Federal Chair Powell, who is scheduled to speak this week. His rhetoric will set the tone for global markets down the road. Elsewhere, ECB vice-president Luis de Guindos said earlier today that the central bank expects an economic contraction or a standstill in the fourth quarter in eurozone.
In currencies, the US dollar keeps recovering this week after an aggressive slide witnessed on Friday. The USD index briefly dipped below the 105.00 handle before bouncing. Still, the recovery momentum looks too modest and the greenback is yet to regain the 106.00 mark, followed by the 106.85 intermediate barrier. As such, EURUSD came off recent peaks seen around 1.0755 at the start of the week. The euro has been pressured since Monday while still staying above the key SMAs on the daily chart. Should the common currency fail to hold above 1.0700, the near-term technical outlook would deteriorate somehow.