Stock futures are trading lower on the final trading day of the week. One of the main reasons that we see a bit of hesitancy among investors today is the arrival of the South African coronavirus variant in California. Altogether, there are four US States which have confirmed the new variant. The fact that the current vaccine is not highly effective, if at all, against the new variant is making traders cautious. The last thing that anyone wants to see is the increase in the new variant cases in the US, which could further adversely influence economic activity. If such an event ever occurs, it is very likely to trigger a sharp sell-off for the S&P 500, and gold prices will move higher.
Traders are also not feeling so upbeat about the economic numbers as the US Weekly Jobless Claims, which was released yesterday, confirmed more weakness in the labour market. Today all eyes will be on the University of Michigan consumer sentiment index, and the hope is to see a serious bounce in this number because of the vaccine rollout. The forecast is for 80.8, while the previous reading was 79.
In the forex market, we do see more bids coming for the Euro as traders like the fact that Mario Draghi has been able to form a government in Italy. Another important aspect worth paying attention to when it comes to EUR/USD is that the currency has performed much better given the fact that the vaccine rollout process is facing many obstacles.
As for Bitcoin, the digital currency is on the cusp of another strong rally as we have seen another new record high. Having said that, for the last 24 hours or so, we see some hesitancy among investors as the price hasn’t exploded the way it should have after breaking above the previous all-time high. Even when we look at the volume situation, we are seeing many sizable orders coming. It seems like traders are waiting for a big push, and then everyone is likely to push the prices higher.
One particular cryptocurrency, which is moving higher is Ripple XRP. It has crossed above the critical level of 0.50. There has been no update in relation to the SEC situation that the company is facing. However, as we mentioned before, if the company becomes successful in addressing the issue, we could really see some seriously huge moves for the coin.
Brent prices recorded another day of losses yesterday, but the downside’s move doesn’t have much momentum. And this means that traders are likely to get back in this trade, and they may push the price higher again. The immediate support for the Brent is at 57—a level which the price may not reach. Overall, bulls are in strong control of the price as the Brent price is trading above the 50, 100 and 200-day SMA on the daily time frame. As long as this remains intact, bulls are likely to control the narrative in the oil market.