News

America’s Roundup: Dollar rally stalls as risk appetite returns, Wall Street ends higher, Gold slips, Oil falls 2% on Powell comments, hopes for Venezuela supply-May 18th,2022

Posted at 18 May 2022 / Categories Market Roundups


Market Roundup

•US Apr Core Retail Sales (MoM)   0.6%,0.4% forecast, 1.4% previous

•US Apr Retail Control (MoM)  1.0%,0.5% forecast, 0.7% previous

•US Apr Retail Sales (MoM)  0.9%, 0.9% forecast, 0.7% previous

•Canada Mar Foreign Securities Purchases 46.94B,7.44B previous

•US Retail Apr Sales Ex Gas/Autos (MoM) 1.0%, 0.7% previous

•US Redbook (YoY) 12.7%,13.1% previous

•US Industrial Production (YoY)  6.40%,5.47% previous

•US Apr Manufacturing Production (MoM)  0.8%,0.4% forecast,  0.9% previous

•US Apr Capacity Utilization Rate 79.0%,78.6% forecast, 78.3% previous

•US Apr Industrial Production (MoM) 1.1%,0.5% forecast,0.9% previous

•US Mar Retail Inventories Ex Auto 2.5%, 2.3% forecast,1.4% previous

•New Zealand GlobalDairyTrade Price Index -2.9%,-8.5% previous

Looking Ahead - Economic Data (GMT)

• 04:30 Japan Mar Capacity Utilization (MoM) 1.5% previous

•04:30 Japan Mar Industrial Production (MoM) 0.3%forecast,2.0% previous

Looking Ahead - Economic events and other releases (GMT)

• No Significant events

Currency Summaries

EUR/USD: The euro rose higher against dollar on Tuesday as hawkish comment from Dutch central bank chief Klaas Knot helped the euro jump back above $1.05. Knot said that not only was the European Central Bank set to hike rates by 25 basis points in July, the central bank was also ready to consider a bigger rise if inflation proved higher than expected. Following Knot’s comments, the euro swiftly more than doubled its gains to more than 1%, to $1.0542.The currency had already benefited from ECB policymaker Francois Villeroy de Galhau arguing on Monday that a weak euro could threaten price stability in the currency bloc. Immediate resistance can be seen at 1.0537(50% fib), an upside break can trigger rise towards 1.0623 (61.8% fib).On the downside, immediate support is seen at 1.0464 (38.2% fib), a break below could take the pair towards 1.0354 (23.6% fib).

GBP/USD: Sterling strengthened on Tuesday after strong labour market data reinforced expectations that the Bank of England would continue to raise rates to fight inflation. Britain's jobless rate hit a 48-year low in the first three months of 2022 and employers paid bigger bonuses to keep or attract staff, according to data that added to bets by investors on further Bank of England interest rate hikes. Investors priced in a 30% chance that the BoE's Monetary Policy Committee will resort to raising interest rates by half a percentage point in June. Immediate resistance can be seen at 1.2508 (38.2%fib),an upside break can trigger rise towards 1.2620 (50%fib).On the downside, immediate support is seen at 1.2361 (23.6%fib), a break below could take the pair towards 1.2301 (5DMA).

 USD/CAD: The Canadian dollar strengthened against the greenback on Tuesday, and the yield on benchmark government debt climbed. Canadian government 10-year bond yields rose 6.1 basis points to 2.984%. The yield on similar U.S. government benchmark debt rose to 2.9531%.U.S. June crude futures rose 28 cents to $114.48 a barrel on Tuesday?.The loonie was trading 0.1% higher at C$1.2829 to the greenback, or 77.95 U.S. cents, after trading in a range of 1.2807 to 1.2853..Immediate resistance can be seen at 1.2830 (21DMA), an upside break can trigger rise towards 1.2880 (23.6%fib).On the downside, immediate support is seen at 1.2787 (38.2%fib), a break below could take the pair towards 1.2716 (50%fib).

USD/JPY: The dollar eased against the Japanese yen on Tuesday as an uptick in investors’ appetite for riskier bets diminished the U.S. currency’s safe-haven appeal. The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, was down 0.7% at 103.39, its lowest since May 6. The index hit a two-decade high last week supported by a hawkish Federal Reserve and worries over the global economic fallout from the Russia-Ukraine conflict. Strong resistance can be seen at 129.80 (10 DMA), an upside break can trigger rise towards 130.17 (23.6%fib).On the downside, immediate support is seen at 128.54 (38.2%fib), a break below could take the pair towards 127.27(50%fib).

Equities Recap

European stocks closed on a strong note on Tuesday, lifted by some encouraging economic data from the region, and on expectations of demand revival in China after Shanghai pledged to gradually ease its Covid lockdown in June.

UK's benchmark FTSE 100 closed up by  0.72 percent, Germany's Dax ended up by 1.59 percent, France’s CAC finished the day up by 1.30 percent.                

Wall Street finished sharply higher on Tuesday, lifted by Apple, Tesla  and other megacap growth stocks after strong retail sales in April eased worries about slowing economic growth.

Dow Jones closed up by 0.65%percent, S&P 500 closed up by 1.17% percent, Nasdaq settled up by  2.76  % percent.

Treasuries Recap

U.S. Treasury yields rose on Tuesday after data showed that retail sales increased strongly in April, reducing fears that the American economy is likely to fall into recession as the Federal Reserve aggressively hikes interest rates.

The 10-year yields   were last at 2.955%, up 7 basis points on the day.The yield curve between two-year and 10-year yields   flattened two basis points to 29 basis points.

Commodities Recap

Gold fell on Tuesday pressured by robust U.S. retail sales data and expectations of aggressive interest rate hikes, although a pullback in the dollar limited losses.

Spot gold fell 0.5% to $1,815.19 per ounce by 2:40 p.m. ET (1840 GMT), while U.S. gold futures settled up 0.3% at $1,818.9.

Oil prices slumped 2% on Tuesday on report that the United States could ease some restrictions on Venezuela's government, raising hopes that the market could see some additional supplies.

Brent crude fell $2.31, or 2%, to settle at $111.93 a barrel, and U.S. West Texas Intermediate (WTI) crude fell $1.8, or 1.6%, to settle at $112.40 a barrel.


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