Posted at 01 June 2022 / Categories Market Roundups
Market Roundup
•Canada Mar GDP (MoM) 0.7%,0.5% forecast,1.1% previous
•Canada GDP (QoQ) (Q1) 0.8%,1.6% previous
•Canada GDP Annualized (QoQ) (Q1) 3.1%,5.4% forecast, 6.7% previous
•Canada GDP (YoY) (Q1) 2.89%,3.26% previous
•US Mar House Price Index (YoY) 19.0%, 19.4% previous
•US Mar S&P/CS HPI Composite - 20 n.s.a. (MoM) 3.1%, 2.4% previous
•US Mar House Price Index 386.5, 381.4 previous
•US Mar S&P/CS HPI Composite - 20 n.s.a. (YoY) 21.2%,20.0% forecast, 20.2% previous
•US May Chicago PMI 60.3, 55.0 forecast, 56.4 previous
•US May CB Consumer Confidence 106.4, 103.9 forecast, 107.3 previous
•US May Dallas Fed Mfg Business Index -7.3, 1.1 previous
•US 3-Month Bill Auction1.120%, 1.060% previous
Looking Ahead - Economic Data (GMT)
•01:30 Australia GDP (QoQ) (Q1) 0.5% forecast, 3.4% previous
•01:30 Australia GDP (YoY) (Q1) 2.9% forecast, 4.2% previous
•05:30 Australia Commodity Prices (YoY) 39.9% previous
•01:30 China May Caixin Manufacturing PMI 48.0 forecast, 46.0 previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro's losses deepened on Tuesday after data showing euro zone inflation hit a record high in May, but expectations the European Central Bank will soon hike rates kept the single currency on track for its best monthly performance in a year.Rising inflation is usually considered a precursor to tighter monetary policy. The ECB is wary that interest rate hikes might tip the economy into a recession, however, especially as the European Union's plans to cut its reliance on Russian energy could push inflation even higher. Inflation in the 19 countries sharing the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7%. The euro fell 0.5% to a five-day low against the dollar. Immediate resistance can be seen at 1.0730(5DMA), an upside break can trigger rise towards 1.0780 (38.2%fib).On the downside, immediate support is seen at 1.0683(23.6%fib), a break below could take the pair towards 1.0658(11DMA).
GBP/USD: The British pound fell against the U.S. dollar on Tuesday, wrapping up five months of straight losses for the currency as Britain’s murky growth outlook and uncertain interest rate trajectory continues to weigh on sentiment.At 1423 GMT, the pound was 0.54% lower against the dollar at $1.2581, having extended earlier losses throughout the day. Despite the weakness, sterling remains well off its mid-May lows when it touched its lowest level since May 2020. Sterling regained ground on the back of strong labour market and CPI data, but the focus remains on soaring inflation and how the central bank will manage future potential rate hikes. Immediate resistance can be seen at 1.2630(5DMA),an upside break can trigger rise towards 1.2679 (38.2%fib).On the downside, immediate support is seen at 1.2525(23.6%fib), a break below could take the pair towards 1.2456(21DMA).
USD/CAD: The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Tuesday as oil prices climbed and domestic data showed the economy expanding less robustly than expected in the first quarter. The Canadian economy grew at an annualized rate of 3.1% in the first quarter, below analyst predictions of 5.4% but in line with the Bank of Canada's forecast of 3.0%, Statistics Canada data showed. The Canadian dollar was nearly unchanged at 1.2654 to the greenback, or 79.03 U.S. cents, after trading in a range of 1.2653 to 1.2686. On Monday, it touched its strongest level in more than five weeks at 1.2648. Immediate resistance can be seen at 1.2668 (38.2%fib), an upside break can trigger rise towards 1.2690 (5DMA).On the downside, immediate support is seen at 1.2633(Daily low), a break below could take the pair towards 1.2574(23.6%fib).
USD/JPY: The dollar strengthened against the Japanese yen on Tuesday as Treasury yields climbed and worries over a further acceleration in global inflation depressed investors' risk appetite.The dollar was supported by demand for safe havens. U.S. stocks fell on Tuesday as soaring oil prices and hawkish comments from a U.S. Federal Reserve official spooked investors. U.S. Treasury yields climbed on Tuesday, a day after Fed Governor Christopher Waller said the Fed should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed. The U.S. Dollar Currency Index , which tracks the greenback against six other major currencies, was up 0.3% at 101.76, on pace for its best one-day gain in nearly two weeks. Strong resistance can be seen at 129.17(19th May high), an upside break can trigger rise towards 130.10(23.6%fib).On the downside, immediate support is seen at 128.39 (38.2%fib), a break below could take the pair towards 127.84(5DMA).
Equities Recap
European stocks closed weak on Tuesday, weighed down by concerns about rising inflation and fears about imminent interest rate hikes by global central banks.
UK's benchmark FTSE 100 closed up by 0.10 percent, Germany's Dax ended down by 1.29 percent, France’s CAC finished the day down by 1.43 percent.
Wall Street's three major indexes closed lower on Tuesday, following a rally last week, as volatile oil markets kept soaring inflation in focus and investors reacted to hawkish comments from a Federal Reserve official.
Dow Jones closed down by 0.67 % percent, S&P 500 closed down by 0.64 % percent, Nasdaq settled down by 0.41 % percent.
Treasuries Recap
U.S. Treasury yields rose sharply on Tuesday, with most maturities hitting one-week highs, as investors re-focused on inflation risks after euro zone inflation climbed to a record high this month and after upbeat U.S. economic data.
The U.S. 2-year yield , which tends to be sensitive to rate expectations, dropped 18.4 basis points in May, the largest monthly decline since March 2020.The benchmark 10-year yield fell 9.3 bps, the first monthly decline since November 2021.
Commodities Recap
Gold prices fell nearly 1% on Tuesday, and were headed for a second consecutive month of declines, pressured by a stronger dollar and as rising U.S. Treasury yields dented the metal’s appeal despite concerns over surging inflation.
Spot gold fell 0.7% to $1,842.50 per ounce by 2:06 p.m. ET (1806 GMT), falling nearly 1% earlier in the session to $1,837.99. It was down 2.9% for the month in its biggest decline since last September. U.S. gold futures settled down 0.5% at $1,848.4.
Oil prices turned negative on Tuesday after a report that some producers were exploring the idea of suspending Russia's participation in the OPEC+ production deal.
U.S. West Texas Intermediate (WTI) crude settled at $114.67 a barrel, down 40 cents or 0.4% from Friday's close. Earlier in the session, it had touched $119.98, its highest since March 9. There was no settlement on Monday's U.S. Memorial Day holiday.