Monday's Market Minute: Watching The U.S. Dollar

Last week the POTUS announced he has contracted the Coronavirus, and this means headline news related to his health and recovery will be a major focal point throughout the week. We also have some closely watched economic data here in the U.S. to stay dialed in on.

Monday traders will be watching data from the U.S. Purchasing Managers, especially the Services Index, after data out of Europe overnight suggested the economic recovery has continued to slow – services PMI data out of the E.U. and Germany slipped below last month’s levels and came in somewhat mixed.

Later in the week, it’s possible the Fed minutes will provide more clarity on how the Fed plans to achieve their lofty inflation goals of above 2%. Treasuries have been mostly sideways with the TNX holding below 1%, and rates have been a good reflection of the Fed’s “wait and see” type approach.

This week we have some jobs data to keep an eye on – on Tuesday, JOLTS, and on Thursday the weekly claims could move markets. U.S. indices are trying to regain footing after selling off, or near all-time highs and recently testing key support: the Dow tested the 200-day moving average and held; the Russell 2000 briefly dipped below it but is now back above.

As far as companies reporting quarterly results, keep an eye on Paychex, Inc. PAYX, Levi Strauss & Co.’s LEVI, Lamb Weston Holdings Inc LW, and Domino’s Pizza, Inc. DPZ. Heads up though, because it’s not just headline news and economic data: this week keep an eye on the U.S. Dollar. Last week it rallied to new multi-week highs but is starting to roll over some to begin the week. If the move off recent multi-year lows for the U.S. Dollar just failed to build momentum higher, this over-crowded trend lower trade we’ve seen in the US Dollar could continue. And a lower Dollar has the potential to move multiple major markets, specifically commodities.

Photo by Giorgio Trovato on Unsplash