Dollar's Dip, Stocks' Surge: A New Week's Market Pulse
21 November 2023
Monday's financial landscape presented a dynamic scenario, particularly favorable for dollar bears and bullish on stocks. Delving into the macroeconomic front, the day was marked by noteworthy events.
The Reserve Bank of Australia's (RBA) monetary policy meeting minutes from Tuesday’s morning, provided keen insights. The RBA expressed a firm commitment to steering inflation back to its target, hinting at potential further tightening based on upcoming data. Notably, they acknowledged an increased risk of not achieving the inflation target by 2025, coupled with an elevated inflation forecast, contingent on the assumption of one to two rate hikes.
Beyond the Australian context, the spotlight shifts to Canada's inflation data. A modest monthly rise of 0.1% is anticipated. However, the day's pinnacle is the release of the FOMC meeting minutes. Given the Federal Reserve's pivotal role in global finance, these minutes are keenly awaited for any indications of future monetary policy directions.
Currency markets have echoed these sentiments, with the dollar experiencing a notable softening. The Japanese Yen, along with the New Zealand and Australian Dollars, have emerged as the stronger currencies. This trend of dollar weakness appears set to continue through Tuesday.
On the corporate front, NVIDIA, a favorite among traders, is slated to release its earnings report after market closure. Expectations are set for an EPS of 3.36 and revenue reaching 16.18 billion dollars. NVIDIA's stock is already riding high, touching new peaks ahead of this announcement.
Indices, particularly NASDAQ, have mirrored this optimism. NASDAQ has not only surpassed its mid-July highs but is now eyeing peaks last seen in late 2021. Such bullish momentum in indices is a testament to the current market sentiment.
Commodities too have been influenced by these broader economic currents. With the dollar's decline, both gold and silver prices are on an upward trajectory. Oil is also partaking in this trend, attempting to sustain a reversal that commenced on Friday. This budding reversal in oil prices is a focal point for traders today.