SPX-500: US market opens in green on positive global cues and lower USD

A lower USD is good for US equities.
Inflation skepticism may have turned into reflation optimism.

The US stock market index SPX 500 opens in green around 2.715, up by almost 0.7% in New York session on positive global cues disregarding surging bond yields and higher inflation. The earlier skepticism about inflation may have turned into reflation optimism on the narrative that a weaker dollar is positive for loose financials conditions and global Goldilocks rally. A weak USD is also good for US equities (exporters and global companies) and the economy (imported inflation).

The VIX volatility index fell to a 1-week low and is a supportive factor for stock prices as global equity markets recover further from last week's sharp sell-off.

Overnight, the US equity markets recovered from post-CPI panic lows and closed higher on optimism about dovish Fed in the days ahead after lower retail sales, a muted consumer spending and serie of GDP downgrades. The market bounced back on goldilocks optimism despite higher bond yields and an indication of stagflation in the US economy.

But, the bond market may be concerned about twin US deficits (fiscal and current account) and higher inflation and therefore bechmark10-year US Treasury yields hover around 2.95%, eyeing the 3% in the days ahead, which may be the biggest headwind for stocks.

Europe is trading in positive on global optimism and some earnings boost from blue chips like Nestle & Airbus coupled with the brighter prospect of German political stability despite the concern of a higher Euro on exporters and multinational corporations.

EUR/USD climbs to daily highs near 1.1820

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GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

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