STATE OF THE MARKETS

Dollar boosted as Powell re-nominated. Early rally in US stocks fizzled after Fed’s Chair Jerome Powell was re-nominated for the second term. Dow (+0.05%) edged higher while S&P (-0.32%) and tech-laden Nasdaq (-1.26%) slid lower as investors saw rate hike sooner than expected. Dollar was boosted past 96.50 minor handle as yields spiked higher with the 10Y benchmark at 1.63% as New York closed.

In the commodities market, crude pared earlier losses, settling at $76.40/bl after OPEC+ signaled a plan to raise production quota. Gold tumbled close to $1,800/oz handle as Dollar strengthened further but iron ore managed to climb higher to $93.40/tn as US infrastructure bills finally signed into law.

In the FX space, King Dollar seized the reign across all horizons as cash demand spiked with more risk-off moves seen across markets. On Tuesday, markets look for earnings reports from Autodesk (ADSK), BestBuy (BBY), Dell Technologies (DELL), HP Inc (HPQ) and Nordstrom (JWN) as well as the latest read on PMIs.

OUR PICK – NZD/CAD

Yields, yields, yields. As investors search for yields to protect against rising inflation, sovereign bonds offer one of many options for risk averse investors and New Zealand government bonds are one of the best yields around in G8 space. Why invest in 30Y US bonds when the same yields could be found in 2Y Kiwi bonds. Time is money.

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.