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America’s Roundup: U.S. dollar hits 20-year high as risk aversion dominates, Wall Street ends down, Gold extends decline ,Oil tumbles about 6% as China COVID lockdowns weigh-May 10th,2022

Market Roundup

•Canada Building Permits (MoM) -9.3%, 21.0% previous

• French 6-Month BTF Auction -0.579%, -0.519% previous

• French 3-Month BTF Auction -0.664%,-0.652% previous

• French 12-Month BTF Auction -0.120% ,-0.167% previous

•US Mar Wholesale Trade Sales (MoM)  1.7%, 1.7% previous

•US Apr CB Employment Trends Index 120.18, 120.56 previous

•US Wholesale Inventories (MoM) 2.3%  ,2.3% forecast, 2.3% previous

•US 3-Month Bill Auction 0.900%,0.910% previous

•US 6-Month Bill Auction 1.385%,1.420% previous

Looking Ahead - Economic Data (GMT) 

•01:30 Australia Retail Sales (QoQ) (Q1) 1.0% forecast,  8.2% previous

•01:30 Australia Apr NAB Business Confidence 16 previous

•01:30 Australia Apr NAB Business Survey 18 previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events

Currency Summaries

EUR/USD: The euro was little changed against the U.S. dollar on Monday as worries about higher interest rates and a tightened lockdown in Shanghai deepened investors’ fears that the global economy is rapidly heading for a slowdown. Central banks in the United States, Britain and Australia all raised interest rates last week, and investors are bracing for more tightening as policymakers try to get on top of soaring inflation. Investors are awaiting U.S. inflation data for April, which might provide more signals about the future monetary tightening path of the Federal Reserve. Immediate resistance can be seen at 1.0557 (5DMA), an upside break can trigger rise towards 1.0597 (38.2%fib).On the downside, immediate support is seen at 1.0490(23.6%fib), a break below could take the pair towards 1.0422 (Lower BB).

GBP/USD: The pound fell to its lowest level since June 2020 for a third straight day on Monday against a broadly robust dollar. News that Irish nationalist party Sinn Fein won the most seats in the Northern Ireland’s devolved assembly for the first time in elections last Thursday added to the pound’s woes. Sterling was last down 0.4% at $1.2284, having fallen to as low as $1.2262 its lowest level in almost two years. It has hit a new low for three straight sessions, and is down 2.3% this month against the dollar. The greenback meanwhile hit a two-decade high as investors snapped up the safe-haven currency amid heightened uncertainty about the global growth outlook. Immediate resistance can be seen at 1.2405(38.2%fib), an upside break can trigger rise towards 1.2433(5DMA).On the downside, immediate support is seen at 1.2287 (23.6%fib), a break below could take the pair towards 1.2187(Lower BB).

 USD/CAD: The Canadian dollar weakened to its lowest level in 17 months against its U.S. counterpart on Monday as rising worries about the global economic outlook weighed particularly heavily on commodity-linked currencies. The loonie was trading 0.6% lower at 1.2985 to the greenback, or 77.01 U.S. cents, after touching its weakest level since December 2020 at 1.30. The price of oil ,one of Canada's major exports, settled 6.1% lower at $103.09 a barrel and stocks globally extended recent declines as China's two largest cities tightened COVID-19 curbs. Bank of Canada Deputy Governor Toni Gravelle is due to speak on Thursday on the topic of commodities, growth and inflation,which could offer clues on the interest rate outlook. Immediate resistance can be seen at 1.3036(23.6%fib), an upside break can trigger rise towards 1.3063 (Higher BB).On the downside, immediate support is seen at 1.2948 (38.2%fib), a break below could take the pair towards 1.2901 (5DMA).

USD/JPY: The dollar steadied against yen on Monday as investors' tilt toward safety of dollar as lockdowns in China, war on the edge of Europe and fear about higher interest rates sent a nervous jolt through markets. Money markets expect the United States to raise interest rates by another 200 bps during the remainder of the year ,taking benchmark rates to nearly 3% .Treasury yields extended their rise for a third consecutive session with yields on benchmark 10-year debt pushing further above 3% to fresh 3-1/2 years. They have doubled in the past two months. Against a basket of major currencies, the dollar topped 104.19 on Monday for the first time since July 2002, extending its almost 9% rise this year. Strong resistance can be seen at 131.44(23.6%fib), an upside break can trigger rise towards 131.95 (Higher BB).On the downside, immediate support is seen at 130.23(5DMA), a break below could take the pair towards 129.45(38.2%fib).

Equities Recap

European shares hit two-month lows on Monday, led by sectors including travel and leisure and technology as a mix of worries over prolonged COVID-19 curbs in China and surging bond yields fuelled selling pressure.

UK's benchmark FTSE 100 closed down  by 2.32 percent, Germany's Dax ended down  by 2.15 percent, France’s CAC finished the day up by 2.75 percent.

The S&P 500 ended below 4,000 for the first time since late March 2021 and the Nasdaq dropped more than 4% on Monday in a selloff led by mega-cap growth shares as investors grew more concerned about rising interest rates.

Dow Jones closed down by  1.99% percent, S&P 500 closed up by 3.20% percent, Nasdaq settled down by 4.28%  percent.

Treasuries Recap

Commodities Recap

Oil prices sank about 6% on Monday alongside equities, as continued coronavirus lockdowns in China, the top oil importer, fed worries about the demand outlook.

Brent crude fell $6.45, or 5.7%, to settle at $105.94 a barrel. U.S. West Texas Intermediate crude fell $6.68, or 6.1%, to settle at $103.09 a barrel. Both contracts have gained about 35% so far this year.

Gold prices extended their retreat to fall more than 1% on Monday as the dollar hovered near two-decade highs, dimming the metal’s appeal.

Spot gold was down 1.4% at $1,856.26 per ounce by 02:00 p.m. EDT (1800 GMT). U.S. gold futures settled down 1.3% at $1,858.60.

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