The rapid spread of the Delta strain puts strong pressure on commodity markets

Despite positive JOLTs Job Openings data, US main stock indices slightly decreased on Monday. The US must overcome the economic crisis caused by the epidemic before the central bank begins to raise interest rates, according to Federal Reserve official Rafael Bostic. Most likely, the US stock market situation will not change significantly, and indices will continue to rise slowly until the annual symposium in Jackson Hole later this month.

European stock indices closed the day without a single dynamic. British stock index FTSE 100 increased by 0.13%, while German DAX decreased by 0.1%. Today, the ZEW institute will publish the economic forecasts for the European countries.

The situation with gold remains unchanged. It is important for traders to keep an eye on the dollar index and US government bond yields now, as gold has an inverse correlation to these instruments. The fall in gold prices is also a sign of strong sell-offs by investors and hedge funds, so many analysts are beginning to think that the Federal Reserve will begin reducing the QE program soon.

The situation in the oil market has not changed either. Oil prices slightly increased yesterday. However, the growth of quotes is still limited due to concerns about the rise of COVID-19 cases in Asian countries and the USA. Traders fear that introducing new restrictive measures to curb the spread of the Delta strain will weaken the global economy and decrease demand for fuel.

Persistent fears about the rapid spread of the Delta strain have undermined investor sentiment in Asia as well, making major stock indices decline. The broadest index of Asia-Pacific stocks outside Japan, the MSCI, decreased by 0.4% in opening trading today, while China's CSI 300 blue-chip index decreased by 0.33%. Analysts at Goldman Sachs presented a more pessimistic forecast for Chinese economic growth as Chinese authorities were forced to impose quarantine restrictions to contain a new wave of Delta. According to the new forecast, China's GDP will increase by 2.3% (previous forecast 5.8%) in the third quarter of this year and 8.3% (previous forecast 8.6%) at the end of the year.

Main market quotes:

S&P 500 (F) 4,432.35 -4.17 (-0.09%)

Dow Jones 35,101.85 -106.66 (-0.30%)

DAX 15,745.41 -16.04 (-0.10%)

FTSE 100 7,132.30 +9.35 (+0.13%)

USD Index 92.28 +0.68 (+0.70%)

Important events for today:
  • – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
  • – Germany ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
  • – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3).

by Justforex, 2021.08.10

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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