AUD, NZD Outperforms, US Rates Rally Hits Tech Stocks - US Market Open

USD, EUR/USD, USD/JPY Analysis & News

• AUD, NZD Outperforms on Base Metals Surge
• GBP Maintains 1.40 as UK Looks to Lift Restrictions
• US Rates Hits Tech Stocks

QUICK TAKE: AUD, NZD Outperforms, US Rates Rally Hits Tech Stocks

Equities: Equity markets are beginning the week on the backfoot with tech stocks among the notable laggards as US rates continue its rally. The question being debated now is how far can US rates rise until the equities start to feel significant pressure. S&P 500 futures had broken below the support area (3880-3900) that had underpinned the index for much of last week, the next level on the downside is the 20DMA at 3863.

S&P 500 Chart: Hourly Time Frame

Euro Stoxx 50 Sector Breakdown

Outperformers:Energy (0.3%), Financials (0.1%),Healthcare (-0.1%)

Laggards: Technology (-2.2%), Consumer Staples (-1%), Utilities (-0.9%)

US Futures: S&P 500 (-0.6%), DJIA (-0.5%), Nasdaq 100 (-1.1%)

Intra-day FX Performance

FX: Choppy performance across the FX space with initial USD gains paring throughout the European session. Antipodeans are off to strong start as the reflation narrative continues to take shape. Strong gains in base metals has helped underpin the Aussie, which briefly broke above 0.7900, while NZD looks to RBNZ (full analysis here).

Bullish momentum in the Pound has shown little signs of easing up as GBP/USD maintains a foothold above 1.40. UK PM Johnson is set to announce a roadmap to lifting restrictions (full report)

Commodities: Gold has managed to reclaim the 1800 level as the pullback in the US Dollar lends support, while the easing of US yields in recent trade has also provided modest support. That said, risks continue to remain tilted to the downside, with resistance at 1830-40 likely to cap further upside in the precious metal.

Looking ahead: Little left on the economic calendar, however, focus will be on tomorrow’s testimony by Fed Chair Powell.