Market jumps on the back of weak USD and better then expected earnings

The US stock market saw one of its best days in months, as speculation swirled that the ‘bottom’ may be in. The indices gained their momentum from better-than-expected earnings and a weakening of the USD, with the USDX dropping to $106.58. With more earnings still to come better than expected results may see the S&P500 and markets break out of their current downtrend.

The Nasdaq ended the trading session up 3.38%, the Dow Jones rose 2.43% and the S&P500 moved 2.78% higher. This should lead to a positive start on the ASX with the XJO futures up 83.2 points or 1.25% at 9:01, Australian Eastern Standard time.

The commodity markets saw a solid rebound with Gold and Oil both pushing back from recent losses. Brent is now back over $100.00 a barrel whilst Gold is hovering above $1700.

The news in the foreign exchange market was the drop in the USD, which also saw strength coming into the AUD. The AUDUSD was able to test its recent resistance point at $0.6860 and is now testing the $0.6900 level. The EUR moved similarly to the AUD also moving up against the USD. There is growing sentiment that ECB members could discuss a 25 or 50 basis point hike at their upcoming meeting. Furthermore, the EU has indicated it will soften sanctions on Russia, and Russian gas giant Gazprom will resume its gas provision to the EU on July 21. Later today, the market can expect updates from the Reserve Bank of Australia as Governor Lowe speaks and UK CPI figures for the year will be announced as well.

Cryptocurrencies saw a nice breakout with the Bitcoin pushing above 24,000 USD as the market pushed the money back into risk assets. The cryptocurrency broke out of a month-long consolidation in a show of strength. Ethereum followed suit rising almost 6%.