- 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.
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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
