It’s Friday … the 13thth! Unfortunately for some though fortunately it is the only one this year. Do stock markets worry about lasting superstition? We think it’s pretty safe to say they don’t. Equity markets around the world are enjoying summer life right now, with MSCI’s global stock level reaching a new record. US stocks also closed at all-time highs for the third day in a row, although the Nasdaq is close to reaching the high.
Trading volume has declined and, with the fall in the second quarter profit season, stock markets continue to the north. This side of the pond is not lacking either, as European stocks equate to the longest winning streak since 2017 with the Eurostoxx index extending gains for the ninth straight session.
The FTSE100 lags behind the rest of the indices, but a strong weekly close would be very positive. The mid-June highs at 7217 are the short-term target, before buyers set the pre-pandemic February mark above 7400.
Dollar that stays close to highs
After not having reached the technical maximums at the beginning of the week against the euro and the pound, the greenback is quietly consolidating. DXY printed an inside day yesterday indicating a decline in volatility, but it is generally considered a continuation pattern.
The markets yesterday obtained more data on inflation that exceeded the consensus in the form of a producer price index (PPI). This recorded its largest annual increase in more than a decade, as strong demand driven by the recovery continues to hurt supply chains. Weekly unemployment claims figures also fell again last week, supporting the dollar supply. Sentiment and positioning have shifted toward the real dollar recently as the Fed shrinks and we should have more color this coming week with the FOMC minutes.
Meanwhile, the bullish consolidation of the DXY means that we may see higher prices. Bulls have mid-July highs at 93.19 strong. They will then look to rise to the top of the date to 93.43.
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