European indexes hit record highs!
The day started with dovish tones of RBA minutes and its governor Mr. Lowe in Asian season, and then same dovish statements from the European Central Bank chief, Mrs. Lagarde also in European season continued inspiring the markets. On top of them, easing US-China tensions with the president's virtual talks also was at the center of the stage.
At the time of writing, STOXX 600 rose 0.4%, GBP100 gained 0.2%, and Blue-chip indexes, including Germany's DAX and CAC40, were up by 0.55% and 0.4%, respectively, to print a new all-time high.
Today we are also waiting for Mrs. Lagarde's speech, while yesterday she repeatedly emphasized that it is not the time yet to talk about tighter monetary policy, as we have many risks there in the markets.
If you follow the central bank's speakers, especially this week that we have many of them, most of them are about holding the current policy and pushing on dovish stances, but it is different from what market participants are understanding and belief. Most investors and market participants believe that they are buying time to see when economies are in a good position to start raising rates, and then, it will be time for them to change their tones and stance.
Ahead of the US market, today US Treasury yields rose to a three-week high at 1.610%, up sharply from a one-month low of 1.42% seen just one week ago, as companies rushed to sell their bonds before liquidity thins during holiday trade. At the same time, as we know the US government will sell the new 20-year bonds on Wednesday. These factors together increase the supply, which ends with higher yields. Also following the higher inflations, former Fed Chairman Dudley and Lake said that the Fed is likely to be forced to raise interest rates to 3% or higher.
Today at the beginning of the US season, US retail sales, both headline, and core increased by 1.7% in October. These data show that the US consumer feeling heading into the holiday season is positive and they are fine with going out and buying to beat the analyst's expectations at 1.2% rise from September, which is the biggest monthly rise since March when most of the lockdown has been removed in the US.
Mentioned date and news added pressure on NASDAQ and stopped the earlier started correction higher. RSI at 45 and flat OBV trend line with decreasing tendency signaling that technically also it is in the downtrend and it can continue lower. Pivot point at 16,200 can be a sign, and trading under this level will hold the pressure on it to next supports respectively sitting on S1 at 16,128 S2 at 16,083, and third support sits at 16,000. Breaching under the third support will open the doors to hold the NASDAQ chart in the 15K area for a bit longer time.
