- US Senate approved infrastructure bill
- European indices extend rally into 7th session
- Dow and S&P 500 reach new all-time highs
- Global coffee production may decrease more than expected
European indexes rose for the seventh session on Tuesday, with DAX near its record high amid solid quarterly figures. German meal-kit firm HelloFresh stock surged more than 9% after the company posted better than expected quarterly growth. On the data front, ZEW index dropped further to 40.4 points in August from 63.3 points in July. Current conditions subindex increased from 21.9 to 29.3 pts, but the market expected a jump to 30 pts. Expectations subindex dropped from 63.3 to 40.4 pts, while market expected drop to just 56.7 pts.
Mixed moods prevail in the US, where Dow Jones and the S&P 500 hit fresh intraday highs while Nasdaq fell 0.40%, as the US Senate approved a $1 trillion bipartisan infrastructure bill, which is expected to boost recovery in the world's largest economy. On the earnings front, AMC Entertainment stock erased early gains despite the fact that the movie theater chain beat second-quarter revenue estimates. Meanwhile Kansas City Southern shares rose more than 7% after Canadian Pacific Railway Ltd raised its offer for the US railroad operator.
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Create account Try a demo Download mobile app Download mobile appWTI crude rose 3.20% and is trading slightly below $69.00 a barrel, while Brent rose 2.80% and is trading above $71.00 as investors continue to assess the restrictions imposed on mobility amid the spread of the Delta coronavirus variant across Asia and the US. Investors' attention will focus on weekly inventory reports from the API later in the day and the EIA on Wednesday. Elsewhere gold rose 0.09% and is trading slightly above $ 1,730.00 / oz, while silver is trading 0.09 % lower around $ 23.40 / oz amid a slightly stronger US dollar.
It turns out that the decline in coffee production may be greater than initial expectations. According to Bloomberg, sources related to the Brazilian government indicate that production may fall by up to 10 million bags. It is not clear, however, whether the sources refer to production in relation to last year or to recent forecasts. A decline of 10 million bags would be the largest weather-related decline in production in many years and will impact more than one season. Currently coffee is trading above 180 cents a pound. However, should the reports of a decline in production prove correct, the price of coffee could rise again, well above 200 cents a pound.
Coffee price is rebounding during today's session and is currently testing the 50.0 Fibonacci retracement of the latest upward wave. Should a break above the 38.2 retracement occur, then an attack on the last local highs will be very likely. On the other hand, a break below the 61.8 mark will negate the bullish scenario. Source: xStation5
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