US open: Futures edge higher ahead of Fed Powell’s testimony

After strong gains within the previous session, Wall Street is heading for a quietly positive start with most preferring to remain on the sidelines before Fed Powell’s testimony before Congress.
All eyes to Fed Powell

After solid gains within the previous session, US stocks are pointing to a mildly stronger start as investors weigh up the prospects of further economic process against inflation concerns. Whilst the Dow gained a powerful 1.8% within the previous session trading before Fed Powell’s testimony before Congress today is probably going to be subdued.

In pre-released remarks, Powell once more reassured those inflationary pressures are going to be transitory whilst also expressing optimism surrounding the outlook for the economy. These comments sound familiar but the6y come against a backdrop of a surprise hawkish shift within the Fed seen last week.

The Fed now expects 2 rate of interest hikes before the top of 2023.

Equities

Gamestop trades +8.4% pre-market after raising $1.1 billion in an offering of 5 million shares as the troubled computer game retailer cashes in on the surge in its stock price this year.

Torchlight Energy trades 4.1% higher pre-market, adding to 50% gains yesterday because it becomes the newest stock to catch the eye of retail investors.

Where next for the Nasdaq?

The Nasdaq trades above its 50 & 100 sma on the 4 hour chart. It also trades above its month old ascending trendline during a bullish trend. Aftter slipping briefly below the 50 sma within the previous session, the very fact that the Nasdaq has broken back above resistance at 14077 adds to the suggestion that there might be more upside to return . an opportunity above 14209 would bring fresh all time highs. Its worth noting the RSI bearish divergence could suggest that the move higher is running out of steam. 14077 offers support now and a move below 14000 could negate the near term uptrend.

The US Dollar is one the increase , clawing back a number of yesterday’s losses. US Dollar price movement has been volatile since the Fed’s hawkish surprise last week when it suggested that there might be two rate of interest rises in 2023. All eyes are now on Fed Powell for further clues on how transitory the spike in inflation could be .

GBP/USD is paring gains from the previous session. Sterling trades struggling despite the general public sector finances improving. Public sector net borrowing came in at £24.3 billion in May, down from £31.7 billion in April and better than the £26.1 billion forecast. The reopening of the economy means tax receipts have picked up, furlough number have declined and government spending on supporting the economy slowed slightly. Whilst this is often an improvement it’s still the second highest level of net borrowing in May since record began.

GBP/USD -0.3% at 1.3893

EUR/USD -0.2% at 1.1897

Oil eases lower on USD strength

Oil prices are edging lower on Tuesday after booking solid 2% gains within the previous session. Oil rallied following comments from the newly elected Iranian President which suggested that he could put the brakes on the US – Iranian nuclear talks. As a result, the prospect of the US lifting sanctions on Iranian oil and it flooding back to the market faded.

A strong demand outlook continues to under pin the worth of oil as economies reopening and travel picks up. However US Dollar strength is simply taking the sting off demand for the black gold.

API inventory data are going to be focused later after big draws on stocks piles were recorded last week.

US crude trades -0.7% at $72.56

Brent trades -0.6% at $73.73