The rallies we saw in stock markets last week have so far failed to carry over into this one. All major stock indices either flat or down, with the exception of the Nasdaq Composite, which rose 0.9% on Tuesday. The Nikkei 225 and Hang Seng both closed lower on Tuesday, tumbling 1.34% and 1.65% respectively.
Taking a glance at the economic calendar this week perhaps explains the mellow market conditions, as there really isn’t much to get excited about. Fed Chair Jerome Powell is due to speak later in the week; traders will be eager to see if the more dovish stance we saw last week persists.
Oil prices plummeted on Tuesday, with West Texas Intermediate Futures closing down at $77 a barrel and Brent Crude down to $81. The slump came with news that US crude stocks rose by almost 12 million barrels last week. Oil prices have now returned to prices not seen since July, geopolitical concerns in the Middle East forgotten for the time being.
Gold has similarly underperformed early this week, losing 0.73% on Monday and a further 0.44% on Tuesday to close at $1969. If we see any strength whatsoever return to the USD then we can expect that to be the driving force not only in gold but in financial markets in general.
