The market mood is cautiously optimistic, yet the dollar and yields are off Fed and data-driven lows. Gold is holding onto $1,900 and the kiwi stands out after the RBNZ’s hawkish decision. Cryptocurrencies are edging higher after several turbulent days. Virus and infrastructure news are eyed.
Mild risk-on: Global stock markets are moving higher and S&P 500 futures are also pointing to further upside, yet the moves are limited. Investors were encouraged by another influx of dovish comments from Federal Reserve officials, who emphasized that inflation is transitory and that the economy has a long way to go.
The latest to reiterate this message was Randal Quarles and Charles Evans. Quarles is scheduled to speak again later in the day. The Bank of England’s Silvana Ternyero also weighed in, saying the US Fed is set to remain accommodative.
The Conference Board’s Consumer Confidence gauge for May fell short of estimates with 117.2 points and sales of new homes also disappointed with 863,000 annualized in April. Updated growth figures and additional statistics are scheduled for Thursday.
EUR/USD took advantage of dollar weakness to hit the highest since January but has since retreated from the highs. Covid statistics in the old continent remain encouraging.
GBP/USD remains under pressure below 1.42 as the EU and the UK remain at loggerheads over the Northern Irish protocol and as coronavirus cases are creeping higher in Britain.
NZD/USD stands out with a leap of over 1% after the Reserve Bank of New Zealand left its interest rate unchanged and implied a rate hike is on the agenda, perhaps even for later this year.
Gold broke above $1,900, hitting the highest since early this year, and it is holding onto this level at the time of writing.
Cryptocurrencies are also on a recovery path, with Bitcoin topping the round $40,000 level and Ethereum advancing toward $2,900. Tesla CEO Elon Musk has continued to tout Dogecoin.