Opening Bell: Stock Woes Deepen As All Eyes Turn To Fed; U.S. Dollar Gains

  • Global stocks, U.S. futures extend post-NFP losses
  • German BASF’s profit warning hits European indices
  • U.S. yields, dollar climb ahead of Fed Chair Powell’s speech
  • Gold drops despite broad risk off mode

Key Events

Global stocks and futures on the , and deepened a slide this morning after an upbeat U.S. tempered the benefits of the Fed rate cut tailwind.

STOXX Daily Chart

STOXX Daily Chart

Europe’s dropped for the third day after the world’s largest chemical producer, German BASF (DE:), posted a profit warning, heightening growth fears across the continent. Technically, the pan-European benchmark is testing the short-term uptrend line, while the RSI already fell below it, suggesting prices may follow.

The also inched lower for the third consecutive session due to the dollar’s post-nonfarm payroll data strength, extending a downside breakout of the short-term uptrend line.

In the earlier Asian session, regional stocks excluding Japanese shares reached near a three-week low after investors repriced their overconfidence in . Hong Kong’s tumbled -0.76% even after the city’s Chief Executive Carrie Lam called her government’s controversial extradition bill “dead.”

Global Financial Affairs

In Monday’s U.S. session, equities continued to fall on the downward effect Friday’s strong labor data carried on investors’ rate cut outlook.

S&P 500 Daily Chart

The gave up 0.48%, with (-1.15%) leading declines, while (+0.34%) outperformed. Technically, the index fell below its short-term uptrend line, with the RSI possibly forming a double-top reversal.

The retreated 0.43%, the dropped 0.78% and the underperformed with a 0.93% loss.

Meanwhile, the yield on Treasurys is hovering in a holding pattern—after jumping the most since Jan. 3 on the positive NFP numbers—as investors await clues on the Fed’s monetary policy path from Chairman Jerome Powell, who speaks at a banking conference today ahead of his highly anticipated before Congress at 8:45 ET on Wednesday—dramatically increasing the likelihood of high volatility at the open.

DXY Daily Chart

The returned to trading along its uptrend line since September, to cross above its short-term downtrend line since May—no less. Investors can expect fluctuations during and after Powell’s speech.

XAU Daily Chart

In mirror image to the USD and despite the broader risk off mood, is falling for the third day, once again demonstrating it is mostly an anti-dollar trade rather than a safe haven asset. Technically, the drop extended a break of the short-term uptrend line, threatening a small double top pattern.

WTI Daily Chart

WTI Daily Chart

was seen ticking higher as geopolitical tensions on the Mideast front intensified after the U.K. seized an Iranian oil tanker—believed to be carrying over 2 million barrels of oil to Syria—off the coast of Gibraltar. Technically, the price remained under pressure below the medium-term downtrend line and the 200 DMA.

Up Ahead

  • Canadian for June are released Tuesday.

  • Canadian for May are released Tuesday.

  • Bank of Canada is issued on Wednesday followed by a press conference.

  • The front-runners for U.K. Prime Minister Theresa May’s succession, Boris Johnson and Jeremy Hunt, will go head to head in a televised debate tonight, ahead of the final vote on July 23 .
  • Federal Reserve Chairman Jerome Powell testifies before Congress on monetary policy and the state of the U.S. economy on Wednesday and Thursday.
  • Fed minutes are due on Wednesday, on Thursday.
  • The , a key measure of U.S. inflation coming out on Thursday, is expected to have increased 0.2% in June from the prior month, while the broader is forecast to remain unchanged.
  • U.S. come out on Friday.

Market Moves





  • Gold declined 0.1% to $1,394.35 an ounce.
  • West Texas Intermediate crude fell 0.4% to $57.43 a barrel.
  • climbed 3.1% to $115.86 per metric ton.

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