European and US stock futures are trading lower, but they are still hovering near their all-time high as investors remain optimistic about stimulus-supported recovery. One particular takeaway from Joe Biden’s speech yesterday was that he has full confidence in his team.
That is because he mentioned that he hasn’t spoken to the Chairman of the Federal Reserve, Jerome Powell, for nearly two months. This means that he is fully on board with the Fed’s monetary policy, which for the time being remains ultra-dovish despite the fact that we have seen more than decent recovery in the US labour market.
We also had some more positive news from the International Monetary Fund, which believes that the global economy is on a much more stable footing today than before. It upgraded the global economy’s forecast.
The IMF believes that the global economy will grow at a rate of 6% this year; the previous number was 5.5%. This is the second time in three months that we have seen the IMF increasing the growth forecast. Although, the IMF did warn that the current economic recovery growth is likely to widen the gap between advanced and less-developed countries.
On the fixed-income side, we will have Italy offering its first new 50-year bond today. The sale of these bonds comes at an interesting time because investors are largely not in the mood to favour bonds as they have largely started to price in the end of the pandemic – thanks to the coronavirus vaccine’s rollout.
It is true that Europe is still facing many challenges with respect to the vaccine, but investors believe that this nothing more than a small speed bump that the continent will get under control very soon.
Nonetheless, Italy’s debt is likely to see solid demand as the ECB is still in the market, and it is committed to accelerate its bond purchases this month. There are also speculations in the market that Italy could also be offering a 100-year bond in the near future. Nothing can really be discounted as the country does need serious help to foster its recovery.
In the commodities trading market, gold prices are holding onto their gains. Market players believe that a large part of good news is already built into the equity market, and now perhaps could be the time for investors to take a breather. Concerns around inflation are real, and they are further fuelling the momentum in the gold trading niche.
From a technical analysis perspective, bulls are feeling a lot more comfortable because the gold price is trading above the psychological support level of 1700, and the price has also broken above the 50, 100, and 200-day simple moving averages on the four-hour timeframe. As long as the price continues to remain above these averages on this timeframe, we are likely to see higher gold prices in the coming days.
As for the cryptocurrencies trading, it is all about Ripple’s XRP. It has broken out of its three year price range, and it is ready to move higher. Yesterday, we saw the XRP price crossing above the $1.00 price mark for the first time in nearly three years. Of course, the management is still fighting the case against the SEC, and yesterday it had its first positive news.