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S & P 500 chart.
The US stock market closed higher on Monday, with Dow gaining 0.8% and S&P 500 rising 0.2%. Nasdaq, on the other hand, remained the same.
Following this, Asian markets posted multidirectional growth this morning. Japan indices rose 0.5%, while China indices slipped 0.3%.
The oil market also continued to increase, completely ignoring the correction in the US market. Now, Brent is nearing $ 74 / bbl ($ 73.90 on Tuesday morning). Apparently, China and India were selling oil from state reserves in order to prevent an increase in fuel prices. This pushed oil prices upward since OPEC countries do not intend to increase supplies yet, despite the growth in global demand. There were also reports that gas prices in Europe soared to $ 700 over the weekend amid recovery of the economy from the corona crisis.
Speaking of the coronavirus, there was an increase in the amount of new cases from around the world. Yesterday, the total count rose to 440,000. The US accounted for approximately 109,000, while the UK accounted for 39,000. EU authorities have been trying to bring down the rate of infection by further tightening restrictions for the un-vaccinated. It is already mandatory there to vaccinate schoolchildren and students over 12 years old. "Green passports" are given to those vaccinated, and those who do not have will not be allowed into public transport, restaurants and schools.
Going back to the markets, the S&P 500 valued 4.468 points, ranging from 4.430 to 4.490. Obviously, investors started new purchases after a strong decline in the market last week, but the activity of buyers was not enough for a complete upward reversal.
Today, there will be a report on US inflation for the month of August, which may answer the question on when and how the Fed will incorporate tapering. Thus, it is important before the Fed meeting on September 22, during which the members will announce their decision on monetary policy. The previous value of the smoothed CPI was 0.5%, while the forecast is 0.4%-0.5%. Meanwhile, the non-smoothed inflation rate reached 5%-6% in the previous months.
Another important news was the scandal with some Fed officials. Two heads of regional Fed banks turned out to be major players in the stock market - Robert Kaplan and Eric Rosengren. They have made more than $ 18 million in deals yet they play an important role in the Fed's decisions that directly affect the market. Ironically, the Fed's rules do not prohibit officials from playing in the stock market. The disclosed FRS officials have already promised to sell their shares and no longer make transactions during their tenure at the central bank.
Talking about dollar, it hit 92.60 points yesterday and ranged from 92.30 to 92.90. It has been staying around here for five consecutive days already. But the upcoming inflation report may change the scenario.
As for USD/CAD, price reached 1.2650, ranging from 1.2580 to 1.2750. The pair is ignoring the new rise in oil prices for now, waiting for the US dollar to move.
Conclusion: Market sentiment will depend on the upcoming US inflation report.
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