Markets Rebound with Strong Bullish Reversal
07 August 2024
Today marks a significant turnaround in the markets, suggesting that concerns about a recession might have been overblown. This bullish reversal is most evident in the indices, which are flashing green and striving to recover their pre-collapse levels. The forex market also reflects this shift, with safe-haven currencies like the Yen and Swiss Franc being the weakest. In contrast, the New Zealand Dollar, Australian Dollar, and British Pound are gaining ground. The NZD, in particular, is benefiting from unexpectedly strong job data, including a drop in the unemployment rate and positive employment change despite negative forecasts.
On the commodities front, oil is making significant gains, appearing to have found a local bottom at key horizontal supports. Precious metals, however, are lagging and not experiencing the same upward momentum as before. This divergence is notable and warrants attention as market dynamics continue to evolve.
The earnings calendar today features heavyweights Novo Nordisk and Walt Disney. Both companies reported earnings that exceeded expectations, yet market reactions have been mixed. Walt Disney is projected to open flat, while Novo Nordisk is set to open 5% lower. Additionally, we are witnessing sharp V-shaped reversals across various assets, including pairs with JPY and USD, indicating a robust shift in market sentiment.