18 May

The dollar index continues to fall amid expectations the US rates will stay low for longer

May 18, 2021

by JustForex

On Monday, major stock indices around the world declined slightly. There is a strong correlation of the world indices from the dynamics of the US indices now. The Fed will hold the FOMC Meeting on Wednesday, which will shed light on monetary policy prospects going forward, so investors are not likely to be very active in the markets until then.

The European stock market ended Monday’s trading with a mixed dynamic. The UK is easing the quarantine measures, which will lead to an increase in profits for many companies.

Against a background of rising inflation in the US, many investors are shifting their assets into commodity markets. This contributes to growth not only in gold, which reached a three-month price high yesterday, but also in silver, palladium, steel, copper, lumber, iron ore, corn, and other commodity assets.

Oil prices continue to rise steadily due to growing investors’ optimism about demand prospects in the US and Europe. Brent is approaching $70 a barrel, while WTI rose to a two-year high on Monday.

Asia-Pacific’s broadest stock index outside Japan, MSCI, rose by 1.06% but has yet to recover its losses of the past few weeks due to the worsening situation and new restrictions with COVID-19 in Asia. Japan’s Nikkei increased by 2.2% thanks to good reports from big corporations, and Hong Kong stocks boosted by 1.24%. China’s CSI300 blue-chip index decreased by 0.20%.

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In Australia, minutes from the central bank’s meeting showed that in order to keep interest rates near zero level, wage growth needs to be at least 3%. Currently, wage growth is only 1.4%.

Main market quotes:

S&P 500 (F) 4,163.29 -10.56 (-0.25%)

Dow Jones 34,327.79 -54.34 (-0.16%)

DAX 15,396.62 -20.02 (-0.13%)

FTSE 100 7,032.85 -10.76 (-0.15%)

USD Index 90.19 -0.14 (-0.15%)

Important events:
  • – Japan Gross Domestic Product (q/q) at 02:50 (GMT+3);
  • – Australia Monetary Policy Statement at 04:30 (GMT+3);
  • – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
  • – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
  • – Eurozone Gross Domestic Product (q/q) at 12:00 (GMT+3);
  • – US Building Permits (m/m) at 15:30 (GMT+3);
  • – UK BOE Governor Andrew Bailey Speaks at 17:00 (GMT+3);
  • – ECB President Lagarde Speaks at 17:00 (GMT+3);
  • – Swiss National Bank Chairman Thomas Jordan Speaks at 18:05 (GMT+3).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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