Daily summary: Wall Street lags behind European bourses

• Lagarde: too early to debate end of ECB help
• Dow at 2-week low, S&P 500 retreats from records
• Crude oil soars to two-year highs

European indices finished today's session mostly higher, some of them even hitting record highs as EBC President Christine Lagarde said during an interview that monetary and fiscal stimulus should remain until there are clear signs that a "firm, solid and sustainable" economic recovery is underway. Meanwhile Banque de France expects that the economy will reach its pre-pandemic level in early 2022, as the vaccination drive allows for the lifting of more restrictions. The central bank also raised its GDP growth forecasts to 5.8% in 2021, from 5.4% in March, and 4.1% in 2022, faster than prior estimates of 3.8%.

US indices are trading in mixed moods. Dow Jones and S&P 500 fell 0.7% and 0.3% respectively while Nasdaq  rose 0.3% as investors await the FOMC meeting on Wednesday. Although the central bank is not expected to take any action, its forecasts for interest rates, inflation and the economy could move the markets. Recently FED has  been reassuring investors of its support for the economy, saying that the rise in prices would be temporary. Billionaire hedge fund manager Paul Tudor Jones said this week’s Fed meeting could be the most important in Powell’s career, and he warned that the chairman could spark a big sell-off in risk assets if he doesn’t do a good job of signaling a taper.

Bitcoin price returned above $40,000 after Tesla CEO Elon Musk on Sunday said the company will resume bitcoin transactions once it confirms there is reasonable clean energy usage by miners. Gold fell sharply to a one-month low of $1,845/oz before paring some losses and bottoming around the $1,860 region. Meanwhile silver is trading 0.1 higher%. Oil prices hit their highest since October of 2018, with WTI crude extending gains above $71 per barrel, while Brent price broke above $73.00 per barrel supported by the prospect of fuel demand growth as vaccination campaigns in developed countries accelerate and many travel restrictions are lifted. 

USDJPY bounced off the upward trendline at the end of last week and today the pair managed to break above 110.00 level. If current sentiment prevails, upward move may accelerate towards resistance at 111.00. On the other hand, should a break below the trendline occur, then another downward impulse towards support at 107.50 could be launched. Source: xStation5