A record reading in ISM Services PMI (63.7% vs. 58.3% expected, 55.3 previous) bolstered equity investors yesterday.  This was the highest reading since September 2005. Nasdaq together with DJIA and S&P rallied strongly yesterday. The indices were up by 1.67%, 1.13% and 1.44% respectively. The consumer discretionary sector was leading the gains with a sizeable gap higher and a 2.27% rise while the energy sector was the only loser with a draw of -2.39%. Tesla and other big technology names certainly helped Nasdaq in yesterday’s rally (TSLA +4.43%, GOOG, +4.19%, FB +3.43%, MSFT 2.77%, AAPL 2.36%).   By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

This image has an empty alt attribute; its file name is 728x90-1-2-9.gif

In December the price of oil kept on rallying higher even though OPEC increased production. This time, however, it might be different. OPEC+ agreed last week to hike the supply of oil perhaps hoping to repeat the recent success but the price plummeted 5% in yesterday’s trading. What the cartel probably counts on is the economic recovery in the US and the hope that global demand will pick up once the vaccination programs advance. This time though, the market reaction doesn’t indicate the traders would be willing to back up their plans. For more analysis on USOIL see our Weekly Market Commentary here.

Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

The RBA rate decision offered no surprises. The cash rate was kept at 0.10% as expected. The board of directors estimation is that their targets for employment and inflation won’t be realised before 2024 (at the earliest). They reiterated their stance that the cash rate stays low until their real inflation target of 2 – 3% is reached. For more details on macroeconomic releases see our economic calendar.

Yesterday gold was trading for a full day outside the bullish wedge formation we identified in the Weekly Market Commentary. Now the price is rallying higher with the bulls aiming to challenge the 1752.80 resistance level. The ETFs tracking the treasury yields gapped slightly higher in the open yesterday retraced lower intraday leaving the gain for the day at 0.98%. We still hold to our view that the yields have risen too much too fast and could now correct lower. This view seems to be shared with the gold bulls that have been willing to bid the price higher today. For more analysis and for the key price levels in gold see the Weekly Market Commentary (here).

This image has an empty alt attribute; its file name is 728x90-1-2-9.gif

The adverse reaction to the OPEC supply increase news took the price below our rising trendline support (red line) but the 5% drop and the 61.8% Fibonacci retracement level attracted bargain hunters who had bid the price higher by 3% or so and right back to the rising trendline. Now it remains to be seen if the bargain hunters can push the price high enough to challenge the key resistance again. If not, the probability for further downside move increases. For more analysis and for the key price levels see the Weekly Market Commentary (here).

Recent macroeconomic data releases

  • US Average Hourly Earnings -0.1%, 0.1% expected
  • US Non-Farm Employment Change 916K, 652K expected
  • US Unemployment Rate 6.0%, 6.0% expected
  • US ISM Services PMI 63.7, 58.3 expected

Important macroeconomic data releases today

  • RBA Rate Statement
  • RBA Cash Rate 0.10%, 0.10% expected

You may access the times and dates in the economic calendar here.

Open a VIP Black account now at www.TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here. For more analysis and commentary, visit our YouTube channel where you can find daily market commentary videos to support your learning and growth as a trader.

Trade Safe!

Janne Muta
Chief Market Analyst

TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and it’s affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions.

The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with any legal requirements for financial analyzes and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval. FX and CFDs are leveraged products. They are not suitable for every investor, as they carry a high risk of losing your capital. Please ensure you fully understand the risks involved.

All the prices in this report are CFD prices based on price charts provided by TIOmarkets unless otherwise stated.

Best pair to trade today Best stocks to trade right now Best time to trade Best time to enter a trad

Janne Muta

Write A Comment


Get our latest market analysis by email, daily