U.S. Stocks Back At Highs, EUR Weak Ahead Of ECB, BOC Looms Large For CAD

Financial markets celebrated yesterday’s OECD report that proved to be more optimistic than expected. The report raised the global growth projections in 2021, on the back of more stimulus from the United States and an increase in the vaccine deployment. 

Stocks celebrated, with the Nasdaq 100 having one of its best days in the last months. Tesla, for instance, recorded a double-digit advance, and so did many of the other names that have been sold lately. The Dow index posted yet another intraday high, in another sign that the stock market exuberance continues unabated.

In Europe, the German Dax is seen at 14,450 points, and it appears to have broken decisively above the 14,000 critical level. The Europe 50 index trades close to 3,800 while FTSE still has a hard time breaking consistently above 6,700 points.

The U.S. dollar trades with a mixed tone. Since the start of the trading week, we’ve seen only consolidation, as important economic data and events are due starting with today.

On the commodities front, gold had a spike of about 2% yesterday, but sellers stepped in. It recovered the $1,700 level but with little or no conviction. As such, the pressure to the downside remains intact. As for the WTI crude oil, it hovers close to $64, finding bids on every dip.

Daily Analysis

Three major events will mark the price action today. First, the CPI in the United States. The Core data is more important, and any upside surprises should move the dollar.

Second, the Bank of Canada statement today is interesting, considering the strength of the Canadian dollar. The CAD strengthened against rivals, dropping below 1.50 against the EUR recently, triggering concerns about the impact on the Canadian exports competitiveness. However, the rising oil prices compensated partly for the strong CAD.

Finally, the crude oil inventories in the United States matters for the price of oil. The United States remains a large consumer, and changes in the level of inventories directly influence the price of oil (and the value of commodity currencies such as the CAD).

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Disclaimer: None of the content in this article should be viewed as investment advice or a recommendation to buy or sell. Past performance/statistics may not necessarily reflect future ...

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