FX.co ★ Overview of the US market (06/29/2021)

The US market closed in different directions on Monday. Dow Jones fell by 0.4%, while Nasdaq and S&P 500 grew by 1% and 0.2% respectively.

Meanwhile, all Asian markets declined this morning, with China indices losing 1% and Japan indices slipping by 0.8%. But if we look at the latest economic reports, Japan posted very strong gains in retail sales, indicating a huge 8% growth compared to last year.

The oil market also sank slightly, dropping by 0.2%. Now, Brent is trading at a price of $ 74.40. OPEC members believe that there will be a shortage in supply until the end of this year, despite the scheduled increase in output starting July.

Last year, OPEC cut supplies by 9.7 million barrels per day in response to a sharp drop in demand during the pandemic. This July, the cut will be reduced to 5.8 million bpd.

The oil market is also waiting for the completion of negotiations between the United States and Iran. If both parties sign a nuclear agreement, oil exports from Iran may grow from 2.5 million barrels to 3.8 million barrels per day.

With regards to the world's epidemiological situation, the total number of new COVID-19 infections is again around 300,000. The main reason is the new strain of coronavirus (Indian strain), which recently caused a sharp rise in cases in Europe and UK.

Going back to the markets, S&P 500 currently values 4.290 points and has a range of 4.250 - 4.310 points. The index grew yesterday because Facebook posted a huge 4% gain, after US dismissed the lawsuit against the company. This should be good news, but the continued rise in stocks is pushing the market close to overheating.

As for the USD index, it hit 91.90 yesterday and continues to have a range of 91.50-92.30. Obviously, investors are still divided on the further direction of dollar amid rising inflation and soft policy of the Federal Reserve. But in the long term, USD will surely rise, as the Fed's tightening of policy is inevitable.

In line with this, USD / CAD, which currently costs 1.2340 and has a range of 1.2300-1.2400, is expected to increase in price in the near future.

Conclusion: The US market will remain calm, but as soon as latest data are released, growth will inevitably occur. Unfortunately, it will be limited since the indices are already at very high levels.