US Open – Bank Holiday Buzz

Investors Return in Good Spirits

US stock markets are gearing up for a strong start to the week as further lockdown easing and some more promising vaccine news lifted sentiment after the bank holiday weekend.

Investors have come back to their desks in high spirits following the long sunny bank holiday weekend (here in the UK, anyway) with news of human trials of a possible COVID vaccine from Novavax. While there’s no guarantee it will be a success, it’s one of many companies that are making advances on the vaccine front which is really encouraging.

While that happens, countries around the world are pushing forward with lockdown easing measures in the hope that major second waves can be averted while we wait for a vaccine to become widely available. Time will tell how successful that will be but some images this weekend suggest it will be more challenging than maybe anticipated.

Stock markets may be rallying today on this news but another story is going nowhere and will be a constant headwind for stockmarkets and that’s US-China tensions. More protests in Hong Kong over the weekend are likely to be another ongoing theme which will likely contribute to a breakdown in relations between the world’s two largest economies, should the US take action in response to China’s interference.

Oil lifted by economic optimism

Oil prices are rising once again, in line with the overall market, as the reopening of economies around the world further bridges the supply/demand gap that triggered the historic plunge last month. A combination of heavy cuts to global production and, thus far, successful reopenings have lifted prices back to far more sustainable levels although even here producers will find it tough. Momentum may slow the closer we get to $40.

Gold loses all momentum

Gold is trading a little lower today but holding above $1,715. Momentum fell out of the rally quite quickly after finally breaking $1,750 and it’s struggling to refind its form. This makes it look a little vulnerable in the near-term, with the next test coming around $1,680 although $1,700 may offer some support.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam