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America’s Roundup: Dollar at one-month low, Wall Street ends down, Gold gains for 5th straight session, Oil steadies after choppy trade-May 25th,2022

Market Roundup

•Canada Mar Wholesale Sales (MoM) 0.2%,0.9% forecast, -0.4% previous

•US Apr Chicago Fed National Activity 0.47,0.44 previous

•Canada Manufacturing Sales (MoM) 1.6%,2.5% previous

•US Redbook (YoY) 11.4% ,12.7% previous

•US May  Manufacturing PMI  57.5,57.5 forecast, 59.2 previous

•US May  Services PMI   53.5, 55.2 forecast, 55.6 previous

•US May  Markit Composite PMI  53.8, 56.0 previous

•US Apr New Home Sales 591K,750K forecast, 763K previous

•US Apr New Home Sales (MoM)  -16.6% , -8.6% previous

•US May Richmond Manufacturing Index -14,14 previous

Looking Ahead - Economic Data (GMT)

•01:30 Australia Construction Work Done (QoQ) (Q1)1.0% forecast,-0.4%previou

•02:00 New Zealand  RBNZ Interest Rate Decision 2.00%               forecast, 1.50%previou

Looking Ahead - Events, Other Releases (GMT)

• No significant events                       

•02:00 New Zealand  RBNZ Monetary Policy Statement

•02:00 New Zealand  RBNZ Rate Statement        

•03:00 New Zealand   RBNZ Press Conference

Currency Summaries

EUR/USD: The euro held near one-month highs as odds narrowed on a July rate rise from the ECB. The European Central Bank is likely to raise its key interest rate out of negative territory by the end of September and could lift it further, ECB President Christine Lagarde said on Monday after policymakers had for weeks made the case for lift-off. Markets now see 110 basis points of rate hikes this year, or moves of more than a quarter of a percentage point at each of the ECB's policy meetings from July. The euro up at $1.0723, having bounced 1.2% overnight in its best session since early March. Immediate resistance can be seen at 1.0780(50%fib), an upside break can trigger rise towards 1.0855 (61.8%fib).On the downside, immediate support is seen at 1.0682(38.2%fib), a break below could take the pair towards 1.0563 (23.6%fib).

GBP/USD: The pound declined against dollar on Tuesday after data showed a sharp slowdown in business activity, adding to concerns that the UK could slip into recession later this year.S&P Global's flash Composite Purchasing Managers' Index (PMI), a monthly gauge of the services and manufacturing industries, fell to 51.8 in May from 57.6 in April, its lowest level since February last year. The PMI is likely to raise new questions about the strength of demand in Britain's economy. Money markets are currently fully pricing in a 25 basis point rate rise from the BoE at its June policy meeting and 114 basis points of tightening by the end of the year, down from around 125 basis points on Friday after strong retail sales data .Immediate resistance can be seen at 1.2587(38.2%fib),an upside break can trigger rise towards 1.2657(Higher BB).On the downside, immediate support is seen at 1.2467 (23.6%fib), a break below could take the pair towards 1.2425 (Lower BB).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from its highest level in nearly three weeks, as oil prices fell and investors grew more worried about the economic outlook. On the data front, Canadian factory sales rose 1.6% in April from March, largely driven by higher sales of petroleum and coal products, Statistics Canada said in a flash estimate. A separate estimate for the same month showed that wholesale trade rose 0.2%.The loonie  was trading 0.4% lower at 1.2820 to the greenback, or 78.00 U.S. cents, after touching its strongest intraday level since May 5 at 1.2762. .Immediate resistance can be seen at 1.2865 (23.6%fib), an upside break can trigger rise towards 1.2891 (14DMA).On the downside, immediate support is seen at 1.2777 (38.2%fib), a break below could take the pair towards 1.2701 (50%fib).

USD/JPY: The dollar dipped against the Japanese yen on Tuesday after data showed U.S. business activity slowed in May as higher prices cooled demand for services while renewed supply constraints because of COVID-19 lockdowns in China and the war in Ukraine hampered production at factories. S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, showed the pace of growth was the slowest in four months. Against a basket of other major currencies , the dollar was down 0.372% at 101.76, its lowest level since April 26.Strong resistance can be seen at 128.02(38.2%fib), an upside break can trigger rise towards 128.78(14DMA).On the downside, immediate support is seen at 126.70 (50%fib), a break below could take the pair towards 125.60 (61.8%fib).

Equities Recap

European stocks fell on Tuesday as worries about economic slowdown and rising inflation, and fears about the impact of higher interest rates triggered widespread selling in the markets.

UK's benchmark FTSE 100 closed down by  0.39 percent, Germany's Dax ended down by 1.80 percent, France’s CAC finished the day down by 1.66 percent.                

Wall Street's main indexes fell on Tuesday, with the tech-heavy Nasdaq leading the slump, as a weak earnings forecast from Snapchat-owner Snap Inc added to nerves about an inflation-struck economy.

Dow Jones closed down by 0.84%percent, S&P 500 closed down by 1.73% percent, Nasdaq settled down  by  2.79 % percent.

Treasuries Recap

U.S. Treasury yields fell to one-month lows on Tuesday after data pointed to a cooling economy as the Federal Reserve presses on with aggressively hiking interest rates to tackle soaring inflation.

Two-year note yields   fell to 2.464%, the lowest since April 19. Benchmark 10-year note yields   dropped to 2.738%, the lowest since April 27.

Commodities Recap

Gold prices rose to their highest in two weeks on Tuesday, with the safe-have metal benefiting from a wilting U.S. dollar and as Treasury yields declined on subdued risk appetite.

Spot gold rose 0.8% to $1,867.41 per ounce by 1620 GMT, after hitting its highest since May 9 at $1,868.69 earlier in the session. U.S. gold futures rose 1% to $1,867.00.

Oil prices steadied on Tuesday after choppy trade as tight supply worries offset concerns over a possible recession and China's COVID-19 curbs.

Brent crude rose 14 cents to settle at $113.56 a barrel. U.S. West Texas Intermediate (WTI) crude fell 52 cents to settle at $109.77 a barrel.

 

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