Market Roundup
•Canada Trimmed CPI (YoY) 2.3%,2.2% previous
•Canada Median CPI (YoY) 2.3% ,2.1% previous
•Canada Apr CPI (MoM) 0.5%,0.4% forecast, 0.5% previous
•Canada Apr Core CPI (YoY) 2.3%, 1.4% previous
•Canada Apr CPI (YoY) 3.4%,3.2% forecast, 2.2% previous
•Canada Apr Core CPI (MoM) 0.5%, 0.3% previous
• US Gasoline Inventories -1.963M,-0.886M, 0.378M previous
• US Crude Oil Inventories1.321M, 1.623M forecast, -0.427M previous
Looking Ahead - Economic Data (GMT)
•23:50 Japan Mar Core Machinery Orders (YoY) -2.6% forecast, -7.1% previous
•23:50 Japan Apr Imports (YoY) 8.8% forecast, 5.8% previous
•23:50 Japan Apr Trade Balance 140.0B forecast, 662.2B previous
•23:50 Japan Apr Exports (YoY) 30.9% forecast, 16.1% previous
•01:00 New Zealand Aug Budget Balance -40.177B previous
•01:00 New Zealand Aug Net Debt Forecast 39.70% previous
•01:00 Australia MI Inflation Expectations 3.2% previous
•01:30 China PBoC Loan Prime Rate 3.85% previous
•01:30 Australia Apr Full Employment Change -20.8K previous
•01:30 Australia Apr Unemployment Rate 5.6% forecast , 5.6% previous
•01:30 Australia Apr Employment Change 15.0K forecast, 70.7K previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Fxbeat
EUR/USD: The euro declined on Wednesday as dollar gained after minutes of the Federal Reserve's last meeting showed the U.S. central bank might be open to talks of tapering stimulus in the future. Several members of the U.S. Federal Open Market Committee (FOMC) said that should the economic recovery continue to gain momentum, it would be appropriate "at some point" to discuss tightening its accommodative policy, giving the greenback a boost. The euro reversed course after touching its highest level against the dollar since the beginning of January, falling 0.5% to $1.2164. Immediate resistance can be seen at 1.2241(23.6%fib), an upside break can trigger rise towards 1.2300 (Psychological level).On the downside, immediate support is seen at 1.2165 (38.2%fib), a break below could take the pair towards 1.2132(5DMA).
GBP/USD: Sterling declined against dollar on Wednesday following the release of minutes from the latest U.S. Federal Reserve meeting.The minutes showed participants agreed the U.S. economy remained far from the Fed’s goals. At the same time, a number of Fed policymakers thought that if the economy continued to show rapid progress, then it would be appropriate “at some point” for upcoming meetings to begin discussing tapering of monetary policy measures. The British pound eased 0.58% against the dollar to $1.4106. Immediate resistance can be seen at 1.4198 (Higher BB), an upside break can trigger rise towards 1.4222 (23.6%fib).On the downside, immediate support is seen at 1.4103 (38.2%fib), a break below could take the pair towards 1.4075 (11DMA).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday as commodity prices fell sharply, while domestic data showed inflation climbing in April at the fastest pace in a decade but at a rate less than in the United States. Inflation in Canada rose to 3.4% in April from 2.2% in March, due mostly to the statistical comparison with last year when prices sank during pandemic shutdowns, data showed. Data last week showed U.S. CPI shot up 4.2% in the 12 months through April. The loonie was trading 0.6% lower at 1.2135 to the greenback, or 82.41 U.S. cents, its biggest decline since April 20. On Tuesday. Immediate resistance can be seen at 1.2175(38.2%fib), an upside break can trigger rise towards 1.2253 (38.2%fib).On the downside, immediate support is seen at 1.2077 (23.6%fib), a break below could take the pair towards 1.1980 (Lower BB).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday following the release of the minutes from the Fed’s most recent monetary policy meeting. In the minutes, a number of members of the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) said that should the economic recovery continue to gain momentum, it would be appropriate “at some point” to discuss tightening its accommodative policy, giving the greenback a boost. The dollar also benefited from a broad risk-off sentiment, which saw the major U.S stock indexes slide and cryptocurrencies plunge. Strong resistance can be seen at 109.41(38.2%fib), an upside break can trigger rise towards 109.99 (23.6%fib).On the downside, immediate support is seen at 109.10 (50DMA), a break below could take the pair towards 108.93(50%fib).
Equities Recap
European stocks posted their worst daily fall in one week on Wednesday, tracking weakness on Wall Street, as investors grew wary of rising inflationary pressures increasing the odds of an early tightening of monetary policy.
UK's benchmark FTSE 100 closed down by 1.19 percent, Germany's Dax ended down by 1.77 percent, France’s CAC finished the day down by 1.43 percent.
U.S. stock indexes dropped more than 2% on Thursday as the swift spread of the coronavirus in the United States led California to declare an emergency, while airline stocks were hammered by crippled travel demand.
Dow Jones closed down by 0.48 percent, S&P 500 ended down by 0.29 percent, Nasdaq settled down by 0.03 percent.
Treasuries Recap
U.S. Treasury yields jumped on Wednesday on news Federal Reserve policymakers in April hinted at a possible shift in future policy, conjuring up memories of a 2013 market sell-off known as the 'taper tantrum.
The yield on 10-year Treasury notes was up 3.8 basis points to 1.680%, pulling back slightly from a day's high of 1.6920%.
Commodities Recap
Gold fell on Wednesday from a more than four-month high it hit earlier in the session as the dollar and U.S. Treasury yields rose after minutes from a Federal Reserve meeting showed the central bank might be inching closer to taper talks.
Spot gold eased 0.1% to $1,866.64 by 3:34 p.m. EDT (1934 GMT), having earlier risen as much as 1.2% to its highest since Jan. 8 at $1,889.75. U.S. gold futures settled up 0.7% at $1,881.50.
Oil prices dropped over $2 a barrel on Wednesday to their lowest in three weeks, on worries that surging COVID-19 cases in Asia would dent demand for crude and that U.S. inflation fears could prompt the Federal Reserve to slow economic growth with interest rate hikes.
Brent futures fell $2.05, or 3.0%, to settle at $66.66 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.13, or 3.3%, to settle at $63.36. Earlier in the day, WTI was down more than 5%.
