US Open – Market bulls are back from holiday, dollar down, oil and gold steady

US futures and European equities are off to a solid start following trading exuberance in China, improving economic data, and hopes for renewed stimulus efforts.  Treasury yields continue to climb higher as dollar and safe-haven currencies slide following a broad risk-on rally. 

Shares in Asia rose sharply after the Chinese Securities Journal stated a healthy bull market after the pandemic is now more important to the economy than ever.  The local press reports attributed the recent gains to stock market reforms and excess global liquidity.  Chinese stock buying is drawing many comparisons to the surge that occurred in late 2014, but the key difference is that the leverage is half of what it was during that time and the PBOC is ready if more action is needed. 

Global equities are also getting a boost from a mass exodus from money markets, but China is the biggest beneficiary as the Mainland rally seems secure by many, as investors look beyond trade and Hong Kong concerns. 


Financial markets will continue to overlook the increases with coronavirus cases over 30 states until US fatality numbers surge.  Vaccine and treatment hope are also expected to provide breakthrough updates over the next couple months that could provide better clarity for the second of 2021.  The US still does not seem to be in a good position for the second wave in the Fall as contact tracing, social distancing, and avoiding mass gatherings saw many states struggled over the long holiday weekend. 


Crude prices are climbing higher after Saudi Arabia rose their selling prices for a third consecutive month, potentially giving a thumbs up to the pickup with global energy demand.  Oil is also getting a boost from Libya’s troubles with ending the six-month oil blockade which has been crippling crude exports.  Libya is shipping out a lot less crude and this just helps with that tighter supply theme.

No one believes oil prices can climb much higher from here.  Maybe crude prices have a couple dollars left in this rally, but the catalyst won’t come from modestly improving economic data, stimulus support for the global economy, tighter supplies, and improving OPEC+ compliance.  Everyone is bracing for the easing of production cuts in August and that will be when the battle for market share resumes.  Energy-producing nations have weathered the COVID-19 demand devastation storm and non-compliance should become the end-of-summer theme for OPEC+. 


Gold prices need a much weaker dollar to recapture the $1800 an ounce level.  Gold is little change as global equities surge following a stronger appetite for risk in Asia and after last week’s momentum from a strong pickup in nonfarm payrolls.  Gold wants to go higher, but it will struggle until the enthusiasm fades with Chinese stocks.  Gold’s short-term outlook is still bullish as more fiscal stimulus in the US is likely, COVID-19 is still seeing daily record spikes in many US states, Latin America remains very vulnerable to the virus, and the dollar’s days appear numbered.  The big risk for gold remains that risk appetite could remain in the driver seat a while longer as it could be a very slow start to the trading week. This week is somewhat quite in terms of market moving economic data and the Fed’s Daly and Barkin are unlikely to rock markets this Tuesday.

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.