The US main indices are trading at their highs. Investors are waiting with bated breath for the release of US inflation data.
The US indices closed mixed yesterday. The Dow Jones rose by 0.5%, while shares of tech companies fell ahead of US consumer prices data. The NASDAQ Composite declined by 0.5%. The S&P 500 index grew by 0.1%.
In the morning, China's stock market decreased by 0.3% and Japan's stock market added 0.6%.
Oil is consolidating above the July lows. Brent crude is trading at $70.60. The US Department of Energy has kept the forecast for oil production in the US at the same level, 11.12 million barrels. The oil output in the US is not growing despite high oil prices relative to the previous period. Probably, oil prices need to grow further to spur demand for shale products. Over the week, US oil crude stockpiles dropped by 0.8 million barrels, remained almost unchanged.
The US Department of Energy reported that demand for oil globally in July increased by 6 million barrels per day in annual terms and amounted to 98.8 million barrels per day, a decrease of 3.4 million barrels per day compared to July 2019.
As for the number of new cases, they are near the highs of the third wave. Yesterday, there were 600,000 new cases worldwide. The Us reported 100,000 new cases. France, the UK, and Russia unveiled 23,000 and 28,000 respectively. In Russia, the death toll is significantly higher than in the United States and Europe due to the low rate of vaccination. Yesterday, there was the first noticeable decrease in coronavirus cases in Russia. A year ago, in August, there was a noticeable seasonal drop in cases. However, Russia saw a new rise in cases in September.
The S&P 500 is trading at 4.436. It is likely to stay in the range of 4.380-4.460. Yesterday, the Senate passed Biden's $1 trillion infrastructure plan but with some adjustments. Now, it needs to be passed through the House of Representatives. The infrastructure plan includes hundreds of billions of dollars spending for the construction of roads and bridges, clean energy infrastructure, broadband internet, water supply systems, seaports and airports. The Biden administration believes that it will be possible to finance it at the expense of unspent funds from emergency funds, duties on corporate infrastructure users, a more stringent tax regime on cryptocurrencies, as well as thanks to noticeable economic growth. However, the non-partisan Congressional Budget Office did not agree with this and considered that the bill, if adopted, would add more than $ 250 billion to the budget deficit over 10 years.
The US dollar index is trading at 93.10. it is likely to stay in the range of 92.80–93.40. The US dollar has reached the highest levels since the beginning of April and it is close to the highs of the year. however, everything may change after the publication of inflation data.
The USD/CAD pair is trading at 1.2520. It is likely to remain in the range of 1.2450-1.2600. The loonie still holds firm against the US dollar. Investors are expecting a new increase in the oil market.
Market sentiment will highly depend on the results of the inflation report.
