Stocks Climb in Careful Trading

US yields pushed to new cycle highs yesterday, although that did not stop precious metals and stocks from rising. Both gold and silver moved higher Tuesday, a rather unusual direction considering the overall hawkishness in the markets. 

At the time of writing, gold was seen near 1,830 USD, while silver traded above 23 USD.

US equity indices also tried to rally, although gains were small. The Nasdaq 100 index still trades below its 200-day moving average, while the Dow and SP500 indices remain above their 200-DMAs. 

In Europe, the German DAX erased most of its post-ECB losses, while the French CAC index did not care at all as it continues to trade near its all-time highs.

In the FX, nothing has changed, and it looks like the USD might be topping, with the EURUSD pair trading above the 1.14 level, in the vicinity of the key medium-term resistance at 1.1520.

For this year, investors anticipate five rate hikes in the US and two rate increases in the EU. 

“We still think that the market pricing of more than 50bp of higher overnight rates, i.e., around two 25bp rate hikes, until the end of the year looks excessive,” said analysts at Nordea, in a note, regarding the ECB expectations.