US Stock Futures Race Higher on Solid Earnings

Equities

Futures tied to major US stock indices traded near their all-time high, boosted by strong earning seasons. Majority of the corporations that announced their earnings were able to beat estimates, reflecting the strong economic rebound in the first quarter of 2021. However, investors should be careful about the outcome as some valuations look highly inflated, which could stop further upside rally. Numerous giant corporations are declaring their numbers later this week, such as Alphabet, Microsoft, Apple, etc... The S&P500 futures hit a record high of 4189, the tech-heavy Nasdaq rallied to 14047, while Dow Jones was a bit softer trading at 33970.

USD

The dollar index which measures the US dollar performance against a basket of major currencies inched higher during the Asian session trading at 90.99. The Federal Reserve is kicking off a two-day policy meeting later today. There are no expectations for any policy changes. However, Powell will be asked about when the Fed is considering to unwind easing, with solid data continuing to pick up, and the Bank of Canada reducing asset purchases last week. The EURUSD eased to $1.2064, the GBPUSD declined to $1.3870, and the AUDUSD fell to $0.7779.

JPY

The Japanese Yen lost ground against rivals post the Bank of Japan policy meeting. The bank kept policy settings unchanged but expressed willingness to ease policy further if needed, especially as coronavirus cases picked up significantly urging restrictions on activity. The expectations of inflation to approach normal levels are still far, the core consumer inflation is expected to hit 1.0% in 2023. Growth forecasts were adjusted slightly higher for 2021 from 3.9% to 4.0%, and from 1.8% to 2.4% in 2022. The USDJPY rallied to 108.38, and the EURJPY rose to 130.84.

Metals

Precious metals prices continued to trade in a tight range as market participants await how Treasury yields will respond to the Federal Reserve policy meeting. The price of a gold ounce held steady near $1780, the price of a silver ounce hovered near $26, while palladium soared further to an all-time high of $2934.

Oil

Oil prices recovered from early-week declines as investors anticipate OPEC+ meeting. The soaring coronavirus cases in India and Japan are worrying for oil producers, as both countries are among the top oil importers. OPEC+ Joint Ministerial Monitoring Committee is meeting today to assess the latest developments in the energy market. The West Texas Intermediate crude June delivery rebounded to $62.56, and the Brent blend June contract inched higher to $66.34.

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