US CPI, retail sales and New York manufacturing data combined with the CPI falling 0.3%, retail sales showed no gains during the month and New York manufacturing had a weaker day. All of this gave the green light to risky assets as yields fell, stocks rose and the US dollar fell. Happy days are here again.
For US stocks, the sharp rise in indexes sent the three major indices to record closing levels.
- The Dow Jones Industrial Average rose 349.89 points, or 0.88%, to 39,908.01 points. This was higher than the previous closing high of 39,807.38.
- The Standard & Poor's Index rose 61.45 points, or 1.17%, to 5,308.14 points. The index closed at a record level yesterday. So closing in positive territory was good enough, so 61.45 points was more than good enough.
- The Nasdaq index rose 231.21 points, or 1.40%, to 16,742.39 points. As with the S&P, it also closed at record levels yesterday. A gain of 231 points raised the new high closing level for tomorrow's trading.
The Russell 2000 small-cap index also rose sharply (but not to record levels). It rose 23.76 points, or 1.14%, to 2,109.45.. The all-time closing high remains miles away at 2,458.85. This means another rise of 16.69% from current levels.
For the trading year
- The Dow Jones is now up 5.89%.
- S&P index rose 11.29%
- Nasdaq rises 11.53%
The Russell 2000 rose 4.06%.
The gains in the United States were not limited to the borders of the United States. European stocks also rose, with the German DAX, the French CAC, the British FTSE 100, the Spanish IBEX, and the Italian FTSE MIB closing at record levels as well.
In the US debt market, the 10-year bond yield fell by 10 basis points during the day. A quick snapshot of the yield curve shows:
- Two-year yield 4.723%, -9.5 basis points
- The 5-year yield is 4.343%, -11.5 basis points
- 10-year yield 4.343%, -10.1 basis points
- The 30-year yield is 4.503%, -8.9 basis points
The two-year bond yield is back below the 200-day moving average at 4.757%. It traded as high as 5.04% on April 29.
The two-year yield is below the 200-day moving average
As for the 10-year yield, it fell to test the 200-day moving average at 4.33% today and stopped. A move below would tilt the bias more to the downside going forward.
The yield on 10-year bonds in the United States is lower
In the Forex market today, the US dollar was the weakest among the major currencies. The strongest major currencies were the New Zealand dollar and the Australian dollar, as risk flows dominated the major currencies.
From strongest to weakest among major currencies
For EUR/USD Technically, the pair's price moved up and away from its 100-day moving average at 1.08235 and also above it the 61.8% retracement of the move down from the March high at 1.0835. The pair rose to the next target swing zone between 1.0875 and 1.0887. The price is trading in the session within that swing zone. This area will serve as a key gauge in the new trading day for both buyers and sellers.
GBP/USD has extended above its 100-day moving average at 1.2633 and is retracing 61.8% from its 2024 trading range at 1.26659. The current price is trading at 1.2684. Staying above the 61.8% retracement level is the best scenario for buyers. Swing highs from April 9 and April 10 or near 1.2703 and next target.
USD/JPY is trading above and below the 38.2% retracement of the trading range since the March low. This level comes at 154.96. This level will serve as a key measure in the new trading day for this pair. Since peaking at 160.208, the price has fallen over 500 pips but is still far from the lowest since March at 146.47 (with the 50% midpoint at 153.34).
In other markets today:
- The price of crude oil rose $0.83 or 1.06% to $78.85 after trading as low as $76.70. Weekly inventories of crude oil and gasoline showed a sudden decline which led to a return to the upside.
- The risk to sentiment sent the big reserve point price towards $66,000. The current price is trading at $65,992.
- Gold is also moving sharply higher supported by a weaker US dollar and lower interest rates. The price rose $27.90, or 1.18%, to $2,385.70.
thanks for your support. Good luck with your trading.