Posted at 02 May 2022 / Categories Market Roundups
Market Roundup
• French 12-Month BTF Auction -0.167%, -0.156% previous
• French 6-Month BTF Auction -0.519%, -0.541% previous
• French 3-Month BTF Auction -0.652%,-0.669% previous
• Canada Apr Manufacturing PMI 56.2, 58.9 previous
• US Apr Manufacturing PMI 59.2,59.7 previous
• US Mar Construction Spending (MoM) 0.1%, 0.7% forecast, 0.5% previous
• US Apr ISM Manufacturing PMI 55.4, 57.6 forecast, 57.1 previous
• US Apr ISM Manufacturing Employment 50.9, 56.0 forecast, 56.3 previous
• US 3-Month Bill Auction 0.910%, 0.890% previous
• US 6-Month Bill Auction 1.420%, 1.370% previous
Looking Ahead - Economic Data (GMT)
•01:00 Australia MI Inflation Gauge (MoM) 0.8% previous
•04:30 Australia May RBA Interest Rate Decision 0.25% forecast , 0.10% previous
Looking Ahead - Economic events and other releases (GMT)
• 04:30 RBA Rate Statement
Currency Summaries
EUR/USD: The euro declined against dollar on Monday after data showed Euro zone factory output growth stalled in April. Euro zone manufacturing output growth stalled last month as factories struggled to source raw materials while demand took a knock from steep price increases and fears about the economic outlook, a survey showed. Russia’s invasion of Ukraine, coupled with renewed COVID-19 related lockdowns in China, have exacerbated supply chain bottlenecks and left factories struggling and forward looking indicators in the survey did not point to an imminent turnaround.S&P Global's final manufacturing Purchasing Managers Index (PMI) fell to a 15-month low of 55.5 in April from March's 56.5, just above below an initial flash estimate of 55.3 and still comfortably above the 50 mark that separates growth from contraction. Immediate resistance can be seen at 1.0525(5DMA), an upside break can trigger rise towards 1.0588 (38.2%fib).On the downside, immediate support is seen at 1.0486(23.6%fib), a break below could take the pair towards 1.0400 (Psychological level).
GBP/USD: Sterling edged lower against the dollar on Monday as market focued on this week's BoE meet and prospects for a rate hike. The Bank of England will try to walk what Governor Andrew Bailey calls a very tight line between tackling inflation speeding way above the BoE's target and not triggering a recession.The BoE is expected to raise interest rates at a fourth meeting in a row on May 5, the first time it has done that since 1997, as it moves faster than other central banks to tackle the surging price growth that they once described as transitory. Financial markets have fully priced in a quarter-point rise in Bank Rate to 1.0%, its highest since 2009, and investors are more focused on what the BoE signals about its next moves. Immediate resistance can be seen at 1.2509(5DMA), an upside break can trigger rise towards 1.2581(38.2%fib).On the downside, immediate support is seen at 1.2450 (23.6%fib), a break below could take the pair towards 1.2400(Psychological level).
USD/CAD: The Canadian dollar weakened to its lowest level in more than four months against its U.S. counterpart on Monday, as the safe-haven greenback broadly climbed and Wall Street lost ground ahead of a policy decision this week by the Federal Reserve. Meanwhile, domestic data showed that manufacturing activity expanded at a slower pace in April as the war in Ukraine contributed to capacity and cost pressures. The loonie was trading 0.4% lower at 1.2905 to the greenback, after touching its weakest level since Dec. 22 at 1.2913. Immediate resistance can be seen at 1.2896 (23.6%fib), an upside break can trigger rise towards 1.2950 (Higher BB).On the downside, immediate support is seen at 1.2850 (5 DMA), a break below could take the pair towards 1.2813(38.2%fib).
USD/JPY: The dollar held steady against dollar on Monday as traders positioned themselves for an expected rate hike and the launch of quantitative tightening by the Fed. The central bank is due to meet on Tuesday and Wednesday. Investors are expecting the Fed to hike rates by 50 basis points when it meets, and the uncertainty is around how hawkish Fed Chair Jerome Powell will sound in comments following the decision. Markets are pricing in an aggressive run of rate hikes from the Fed as it tries to tame soaring inflation. The dollar index gained 5% in April, its best monthly performance since January 2015. Strong resistance can be seen at 131.02(23.6%fib), an upside break can trigger rise towards 132.15(Higher BB).On the downside, immediate support is seen at 129.91(5DMA), a break below could take the pair towards 128.38(38.2%fib).
Equities Recap
European stocks closed notably lower on Monday as worries about slowing growth, soaring inflation and geopolitical tensions amid the ongoing war in Ukraine weighed on sentiment.
UK's benchmark FTSE 100 closed up by 0.47 percent, Germany's Dax ended down by 1.13 percent, France’s CAC finished the day up by 1.66 percent.
Wall Street ended a volatile trading day higher on Monday and benchmark U.S. Treasury yields breached the 3% mark as investors braced for a widely anticipated U.S. Federal Reserve interest rate hike.
Dow Jones closed up by 0.26% percent, S&P 500 closed up by 0.56% percent, Nasdaq settled upby 1.63% percent.
Treasuries Recap
U.S. Treasury yields rose sharply on Monday, with those on long-dated debt hitting multi-year highs, as investors prepared for a Federal Reserve meeting this week that is expected to raise interest rates by a hefty half a percentage point.
U.S. benchmark 10-year yields traded not far from a psychologically important 3.0% level, hitting 2.992%, the highest since December 2018. U.S. 10-year yields were last up 9 basis points at 2.978%
Commodities Recap
Gold prices fell more than 2% to a near three-month low on Monday, as increased prospects of faster rate hikes by the Federal Reserve lifted U.S. Treasury yields and the dollar.
Spot gold fell 1.6% to $1,865.31 per ounce by 02:07 p.m. EDT (1807 GMT), earlier hitting its lowest since Feb. 16 at $1,854.36. U.S. gold futures settled down 2.5% at $1,863.60.
Oil prices reversed course to settle in positive territory on Monday on a rally in the diesel market and fears that supply might be crimped by a potential European Union ban on Russian crude.
Brent crude futures gained 44 cents, or 0.4%, to settle at $107.58 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 48 cents to settle at $105.17 a barrel.