FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
FXCC information and reviews
Markets.com information and reviews
FxPro information and reviews
47 300.23

What does waning inflation panic mean for Techs and the Dollar?

24 May 2021

The idea of temporary inflation seems to be creeping into the minds of the financial community, helping to calm interest in commodities. Furthermore, we see politicians in different parts of the world engaging in their ways to combat the inflation threat. China announced measures earlier in the week to curb metal prices, quickly cooling the recent overheating.

Oil’s growth trend is again in question. Top policymakers say that nuclear talks with Iran are productive, so they could lift sanctions prohibiting Iranian oil export. This may increase the oil supply, putting pressure on the price. Brent fell below its 50-day moving average, an important uptrend support line since November last year. This is more good news for Iran (and the rest of the world) but bad news for oil prices.

Falling out of the uptrend channel risks creating an additional snowball effect with inflationary bulls shorting long positions. Possibly, the bulls are waiting for a small pullback to level the purchases, so it is worth paying attention to the dynamics of oil near the area of the previous lows at $60-61. A solid decline below $60 will open the way to a deeper correction, potentially $55. Bloomberg also says that pro-inflationary trends are pausing, noting a drop in demand for lumber and house building amid multiple price hikes. At the same time, sawmills are not increasing their production, suggesting the recent boom is temporary.

Moreover, the Philadelphia Fed business activity index fell from a record 50.2 in April to 31.5, much stronger than forecast. At the same time, U.S. 10-year government bond yields went down, and inflation expectations from the markets cooled, indicating a decline of interest in inflation-tolerant bonds.

Lower inflation fears potentially mean stronger support for growth versus value stocks, providing an advantage for the Nasdaq over the Dow Jones. In confirmation of market participants’ optimism, from the side of tech analysis, we now see a test of the 50-day average by the Nasdaq100 and a bounce out of the oversold RSI area, which also indicates that the sell-off is over and buying recovery is underway.



US Retail sales and other data has supported Dollar
US Retail sales and other data has supported Dollar

The US Retail sales notably exceeded expectations, adding 0.7% in August vs an expected 0.7% decline. The increase to August last year is an impressive 14.9%...

17 Sep 2021

Geopolitics Fire Up Up and Cryptos Are Booming
Geopolitics Fire Up Up and Cryptos Are Booming

Futures in the United States and Europe are trading lower today as investors are worried about the new security agreement between the U.S., the U.K. and Australia...

16 Sep 2021

UK inflation surges, stocks struggle
UK inflation surges, stocks struggle

European markets flat at the open this morning as UK inflation surged to a record high in August and Chinese economic data was soft. China’s retail sales fell to...

15 Sep 2021

Gold is anxiously waiting for the US inflation data
Gold is anxiously waiting for the US inflation data

Gold, hovering around $1790 since last Thursday, might take an even harder hit. The bears are waiting for a good signal to launch an attack. It is now holding it below significant levels...

14 Sep 2021

Here Is Why Stock Futures Are Trading Lower
Here Is Why Stock Futures Are Trading Lower

Despite a week of doom and gloom in the stock markets, futures in the United States are still trading lower. Since February, the S&P 500 has been on its longest...

13 Sep 2021

Fintech - too big to be?
Fintech - too big to be?

Two of the world’s largest economies are in sync with pressure on their fintech giants. Access to user data and the growth of ecosystems have effectively...

13 Sep 2021

Editors' Picks

OctaFX information and reviews
HotForex information and reviews
XM information and reviews
FXCM information and reviews
Vantage FX information and reviews
Vantage FX
Moneta Markets information and reviews
Moneta Markets

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.