Will "Goldilocks" Continue?

Will "Goldilocks" Continue?

08.04.2021

Yesterday, the stock market saw minor, directionless fluctuations, and with no new information emerging from the closely watched minutes of the U.S. FOMC meeting, the market as a whole entered a range-bound trading phase.The U.S. 10-year Treasury yield remained range-bound around 1.66%, and crude oil prices were also stuck in a stalemate around $59.50. Although the CEO of JPMorgan Chase stated yesterday that “the next two years could see a ‘Goldilocks’ market,” the market did not react significantly.

In the foreign exchange market, cross-yen pairs—with the exception of the franc/yen—have been trending lower. The pound/yen, which saw a particularly sharp decline, has fallen by about 270 pips over the past two days, from 153.4 to 150.6. However, the pound/Australian dollar has stopped falling during today’s Asian trading session, so we’ll be keeping a close eye on the pound’s future direction.

Today’s schedule includes German manufacturing orders at 15:00, the UK construction PMI at 17:30, the release of the ECB Governing Council meeting minutes at 20:30, U.S. initial jobless claims at 21:30, and U.S.weekly natural gas inventories, at 24:00 remarks by U.S. St. Louis Fed President Bullard, at 25:00 remarks by U.S. Federal Reserve Chair Powell, and at 27:00 remarks by U.S. Minneapolis Fed President Kashkari.We will watch the market closely to see if it can break out of yesterday’s narrow trading range.