Welcome to a new week, the last full week of trading in May. Today, Monday, we will experience the absence of British and American traders as the UK and US markets are closed. This will likely result in lower liquidity. The key event on the calendar is the German IFO Business Climate, expected to come in at 90.4.
The situation in the markets is quite positive in Europe. The DAX is climbing higher, demonstrating strength despite the broader correction in the US. This highlights a divergence between the bullish European indices and the still bearish American indices, which have been correcting since last week.
In the currency markets, the strongest performers are the antipodean currencies—the Australian dollar and New Zealand dollar. In contrast, the weakest currencies are those from Central Europe, particularly the Czech koruna and Hungarian forint. The biggest gains are currently seen in the Australian dollar to US dollar pair, reflecting robust performance.
Commodities are also seeing notable movements. Natural gas is surging, up almost 10% today. Precious metals, including palladium and platinum, are up nearly 2%, while silver and gold have gained over 1%. Oil, though quiet today, showed a significant bullish reversal from local lows on Friday, suggesting a potential midterm buy signal if the trend continues.
Regarding earnings, Autodesk will present its report today in the US. However, this week is light on tier-one earnings reports, with only Salesforce on Wednesday and Costco on Thursday. The earnings season is gradually winding down.
In summary, we observe a bullish momentum in European indices, potential bullish developments in oil following last week's reversal, and strength in the Australian and New Zealand dollars. The market's performance today will be crucial for setting the tone for the rest of the week.