US Open – Rally Uncertainty, NYC reopens, Focus on Fed, OPEC delivers, Gold Stabilizes

It’s a bullish signal for global stocks after a shockingly strong nonfarm payroll report suggest the trillions of dollars in economic assistance from the federal government and Fed is fueling a quicker rebound in hiring during the coronavirus pandemic.  The world’s largest economy just grabbed the baton back and is leading the stock market rally. 

The dollar traded mixed against its major trading partners but seems poised for further declines ahead of the Fed as the global economic recovery continues. 

Wall Street continues to ride the global reopening trade as S&P 500 nears recovering all of its losses for the year.  Reopening momentum continues as NYC phase-one reopening begins today.  Life is far from normal in NYC, but after almost three months of lockdown, New Yorkers are welcoming construction, manufacturing and non-essential retail.  Haircuts and dine-in services still seem far from happening, but optimism is high that the city is headed in right direction.


The Fed policy decision in the middle of the week is expected to show they are still all-in with supporting the economy for as long as needed.  The job report raised some eyebrows that a fast rebound could ultimately end the stimulus trade a lot sooner than anyone expected.  One report however should not trigger a change with Fed guidance. 


Crude prices rose after OPEC+ had a very smooth meeting over the weekend that extended their historic production cuts by an extra month.  Oil was also supported after Tropical Storm Cristobal halted about 34% of oil production in the US Gulf of Mexico.  The impact of the storm was about 636,000 of daily crude output, alongside a 32% drop with natural gas production. 

Oil prices are riding high on the OPEC+ historic output curbs, reopening boost to crude demand expectations, and Tropical Storm Cristobal’s unexpected idling of oil production.  WTI crude has rebounded above the $40 level and the fundamentals could support further upside. 

The global economic recovery is still very fragile and Saudi Aramco’s price hike, the biggest in 20 years, could start to hamper the rally.  The next couple of months will be interesting as oil-producing nations will try to navigate maximizing oil sales while not giving up market share. 

Despite an amazing rally from almost -$40 to +$40 in just over a month, the curve indicates energy traders should not expect much higher prices over the next couple months.  Oil’s path forward will rely on the demand outlook and that will be determined by improving air travel and driving traffic.  Bullish expectations are becoming the consensus, but it seems oil prices could ready for a pullback once the Saudi-Russian price war gap is filled. 


Gold prices are shrugging off the last week’s decline on hopes the Fed will not tap the breaks in supporting the US economic recovery.  After a brutal week, gold prices are starting to show signs of life again as investors become skeptical that the US equities will struggle to climb much after recapturing all their losses this year. 

The global economic recovery will still require further aid and gold prices should still be supported over the medium-term. 

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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.