Opening Bell: U.S. Futures, Stocks Pause; Treasuries, Dollar Slide


  • Global stocks hover around record highs
  • Yields and dollar weaker
  • Bitcoin rallies

Key Events

Falling yields dragged the dollar lower ahead of tomorrow’s US report, a possible leading indicator on the path of interest rates. Futures on the , , and wavered in pre-US open trading on Wednesday as markets tread water ahead of the key economic indicator.

Oil demand improves, pushing prices nearer to 3-year highs.

Global Financial Affairs

US futures and European stocks, including the were in a holding pattern, with traders fingers hovering above order buttons.

Yields on the Treasury fell sharply toward the 1.5% mark.

10-year Treasuries Daily

A report showing rising inflation may be the last straw before rates complete a bearish pattern—a Descending Triangle, whose implied implication is a drop of 30 basis points to retest 1.20%.

The fell on pessimism, as traders watched falling yields scream rising inflation, which would weaken the American currency’s buying power. Although the Fed is holding firm on tightening its accommodative monetary strategy, some commentators continue to argue that the US central bank is, in fact, signaling—albeit slowly—that it’s headed toward tapering.

The chart projects this fork-in-the-road.

Dollar Index Daily

Dollar Index Daily

The dollar has been struggling to rise after a 4% drop following a rising wedge. However, that bearish pattern was a product of a massive falling wedge since the March 2020 peak. The current rising congestion could turn out to be a rising flag, whose downside breakout may be all that it takes to break the January 2020 low, on its way to challenge the 2018 low.

If that is crossed, we might see the greenback heading back toward its 2011 low below 73. The 50 DMA crossed below the 100 DMA, after not daring to near the underside of the 200 DMA. So, it doesn’t look good. However, if the price does provide an upside breakout, we could see our recent bullish call vindicated.

fell for the second day, despite dollar weakness, which is rare, suggesting perhaps technical influence.

Dollar Index Daily

Gold is falling toward the bottom of its rising channel, which helped the yellow metal breakout of a falling channel since its August peak. On Friday, gold confirmed the channel’s integrity, which has been cemented by the 200 DMA. The 50 DMA crossed over the 100 DMA, eyeing the 200 DMA for a potential Golden Cross.

bounced, after El Salvador became the first country to adopt the digital coin as legal tender. Analysts see the $30,000 level as a red line, which if broken can open the door for the cryptocurrency to reach $20,000. We set the breaking point at $29,000.

Bitcoin Daily

It’s likely that BTC may break Tuesday’s hammer’s support, considering the price completed a bearish pennant. However, if it breaks the $29,000 level, there may be no floor for the leading crypto.

API a 2.11 million barrel drop in US inventory, demonstrating improving demand, pushing the price above $70.50, for the first time since mid-October 2018.

Oil Daily

Oil completed an ascending triangle, demonstrating how demand is absorbing all available supply and upping bids to extend the underlying uptrend.

Up Ahead

  • Today the Bank of Canada announces its interest rate .
  • The European Central Bank’s interest rate on Thursday and hosts a press conference with President Christine Lagarde.
  • Talks on the Iran nuclear deal reconvene in Vienna on Thursday.

Market Moves

Stocks

  • The STOXX 600 was little changed
  • Futures on the S&P 500 were little changed
  • Futures on the NASDAQ 100 were little changed
  • Futures on the Dow Jones Industrial Average were little changed
  • The Index fell 0.4%
  • The Index fell 0.3%

Currencies

  • The Dollar Index fell 0.1%
  • The was little changed at $1.2184
  • The was little changed at $109.42 per dollar
  • The rose 0.1% to 6.3915 per dollar
  • The rose 0.2% to $1.4183

Bonds

  • The yield on 10-year Treasuries declined three basis points to 1.51%
  • Germany’s yield declined one basis point to -0.24%
  • Britain’s yield declined one basis point to 0.76%

Commodities

  • rose 0.6% to $73 a barrel
  • was little changed



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