Global markets firm ahead of tomorrow's FOMC minutes

Tuesday, May 20, 2014

US equity indices started the week on a positive note, with both the DJIA and S&P 500 extending Friday’s gains, however, markets struggled to push significantly higher in a sign that investors remained cautious regarding current market valuations. In a session that lacked any significant macro data investors were struggling with direction and investors will hold out for key data expected later this week, notably initial jobless claims, manufacturing PMI and existing home sales.

The Asian session echoed the hesitant tones that were present on Wall Street with benchmark indices across the region managing to post steady gains in a session void of significant macro data. Both the Nikkei and TOPIX rebounded higher despite a firmer yen, which traded below 101.50 early on this morning, strengthening for the fifth straight session.

Gold slipped below technical support early on this morning as prices traded below $1,290/oz. Support at the 100 day MA had held up firmly throughout May but has struggled to hold substantially above $1,300/oz as investors continue to weigh up the outlook for US monetary policy. Intraday prices rallied towards $1,305/oz yesterday as investors speculated the newly elected government in India would loosen import restrictions, however, prices quickly retreated and settled back into the tight range that has dominated activity over the past month. Fed officials due to speak later today at separate events could offer some insight into the outlook for the US economy ahead of the release of April’s FOMC meeting minutes tomorrow.

Gold continues to trade rangebound as investors struggle with direction

XAU Curncy Gold Spot Oz 2014 05 20 07 41 11



Events for today

0700

DE

Apr

Producer Prices

0930

UK

Apr

CPI & RPI

All times UK Local Time

Topics: Equities, Gold, JPY
More from: Kash Kamal