- Wall Street slightly higher after Powell comments
- BoC adjusts its QE program
- US crude stocks fall for 8th week
European indices finished today's session in mixed moods, as concerns over the spread of the Delta variant of COVID-19 hit travel stocks. Also weak macroeconomic data limited upside potential. Eurozone industrial production fell much more than expected in May. UK inflation rate rose more than expected in June to a three-year high and above the Bank of England's target.
Three major US indices erased early losses (caused by news on new tax increases) and are trading slightly higher after comments from Fed Chair Powell which suggested that the central bank is not planning to reduce emergency stimulus despite rising price pressure and that inflation will remain high for some months before moderating. Fed Chair also added that the economic recovery is still a ways off from complete. On the earnings front, Bank of America, Citigroup, Wells Fargo, PNC and BlackRock all posted better than expected quarterly earnings.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe Bank of Canada left its key overnight rate unchanged at 0.25%, as expected but adjusted the quantitative easing program to a target pace of $2 billion from $3 billion per week. The adjustment reflects continued progress towards recovery and the Bank’s increased confidence in the strength of the Canadian economic outlook.
WTI crude fell more than 2.8% and is trading slightly above $73.10 a barrel, while Brent is trading nearly 2.4% lower around $74.70 a barrel. EIA report showed crude oil inventories dropped by 7.897 million barrels, an eighth consecutive period of decline and compared with analysts’ expectations of a 4.359 million fall. Elsewhere gold rose 0.95% to $ 1,824.00 / oz, while silver is trading 0.85 % higher, around $ 26.20 / oz amid a slightly weaker dollar. The yield on the benchmark 10-year Treasury note fell to 1.37% from 1.42% early in the session.
Gold has been trading in an ascending channel recently. Currently price is testing strong resistance at $1830.00 /oz which coincides with 50 SMA (green line), 200 SMA (red line) and 38.2 Fibonacci retracement of the downward wave which started in August 2020. Should a break higher occur, then the next target for bulls is located around $1850.00/oz. On the other hand, if sellers manage to regain control, then another downward impulse towards support at $1800.00 /oz may be launched. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
