Market Roundup
•US Apr Wholesale Trade Sales (MoM) 0.7%,1.7% previous
•US Wholesale Inventories (MoM) 22.2%,1% previous
•US Gasoline Inventories -0.812M,1.075M forecast,-0.711M previous
• US Cushing Crude Oil Inventories-1.593M,0.256M previous
• US Crude Oil Inventories -1.917M forecast,-5.068M previous
Looking Ahead Economic Data
• 03:00 China Trade Balance (USD) 58.00B forecast, 51.12B previous
• 03:00 China May Imports (YoY) 2.0% previous
• 03:00 China May Exports (YoY)8.0% forecast, 3.9% previous
• 08:00 China New Loan 1,275.0B forecast,645.4B previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro steadied against dollar on Wednesday as investors focused on the European Central Bank's meeting on Thursday and U.S. CPI data on Friday. Investors raised their bets on ECB rate hikes, and as European markets opened, money markets were pricing in 75 basis points of rate hikes by September. With the bank largely expected to start hikes in July and move in 25 basis-point increments, the pricing implies traders now expect its hikes to include a rare 50 basis-point move at a single meeting by September. Immediate resistance can be seen at 1.2761(38.2%fib),an upside break can trigger rise towards 1.2844(50%fib).On the downside, immediate support is seen at 1.2649(23.6%fib), a break below could take the pair towards 1.2557(23rd May low).
GBP/USD: Sterling fell on Wednesday, staying close to a near three-week low touched this week against the U.S. dollar, amid investor nervousness about a confidence vote on British Prime Minister Boris Johnson that left him politically vulnerable. Heightened political uncertainty has added further pressure on sterling, which has declined more than 7% this year, weighed down by Britain's dismal growth outlook. The British currency fell 0.5% against a strengthening U.S. dollar to $1.2528 at 0840 GMT after touching its lowest level since May 19 at $1.2433 on Tuesday. Immediate resistance can be seen at 1.2556(9DMA),an upside break can trigger rise towards 1.2630(38.2%fib).On the downside, immediate support is seen at 1.2521(23.6%fib A), a break below could take the pair towards 1.2446(June 7th low).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from its strongest level in nearly seven weeks, as risk appetite wavered ahead of key macro events over the coming days. The price of oil , one of Canada's major exports, was up nearly 3% at $122.96 a barrel, supported by rising U.S. demand for gasoline despite record pump prices.The loonie was trading 0.2% lower at 1.2550 to the greenback, or 79.68 U.S. cents, after earlier touching its strongest since April 21 at 1.2518. Immediate resistance can be seen at 1.2569 (5DMA), an upside break can trigger rise towards 1.2618(38.2%fib).On the downside, immediate support is seen at 1.2518 (23.6%fib), a break below could take the pair towards 1.2472 (Lower BB).
USD/JPY: The dollar strengthened on Wednesday as U.S. equities fell and boosted the appeal of the greenback. The greenback reached a fresh two-decade high against the yen, which weakened to hit 134.47 per dollar, its softest since Feb. 27, 2002, and the euro achieved its highest level against the safe-haven yen since Jan. 5, 2015. The Bank of Japan remains one of the few global central banks to maintain a dovish stance while others have adopted tightening policies of hiking interest rates to combat inflation. Strong resistance can be seen at 134.22 (Daily high), an upside break can trigger rise towards 135.00(Psychological level).On the downside, immediate support is seen at 133.16 (38.2%fib), a break below could take the pair towards 132.11(50%fib).
Equities Recap
European shares fell on Wednesday with concerns around economic growth slowdown and a gloomy forecast by Credit Suisse weighing on banks, while investors braced for the European Central Bank's meeting on Thursday and the U.S. Federal Reserve's next week.
UK's benchmark FTSE 100 closed down by 0.08 percent, Germany's Dax ended down by 0.76 percent, France’s CAC finished the day down by 0.80 percent.
U.S. stocks fell on Wednesday as Treasury yields rose above the psychologically important 3% level and oil prices jumped, fanning worries about inflation and the outlook for interest rates.
Dow Jones closed down by 0.81% percent, S&P 500 closed down by 1.08% percent, Nasdaq settled down by 0.73 % percent.
Treasuries Recap
Treasury yields rose on Wednesday after the U.S. Treasury Department saw tepid demand for a sale of 10-year notes, and as investors waited on highly anticipated inflation data on Friday.
Benchmark 10-year yields gained 6 basis points to 3.029%. Two-year yields rose 4 basis points to 2.774%.
Commodities Recap
Gold inched up in choppy trade on Wednesday as concerns over economic growth boosted the metal’s safe-haven appeal ahead of U.S. inflation data that could guide the Federal Reserve’s rate hike timeline.
Spot gold rose 0.1% to $1,853.82 per ounce by 2:29 p.m. EDT (1829 GMT). U.S. gold futures settled up 0.2% at $1,856.50.
Oil prices held near 13-week highs on Thursday, underpinned by robust demand in the world's top consumer United States while demand is expected to rebound in China as COVID-19 curbs across major cities are relaxed.
Brent crude futures for August nudged up 12 cents to $123.70 a barrel by 0033 GMT, while U.S. West Texas Intermediate crude for July was at $122.17 a barrel, up 6 cents.
