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  |   Market Roundups


America’s Roundup: Dollar index slips from 20-year high, Wall Street ends down, Gold gains, Oil gains 1.5%, posts another weekly rise on supply concerns-May 7th,2022

Market Roundup

•Canada Apr Part Time Employment Change 47.1K,-20.3K previous

•Canada Apr   Full Employment Change -31.6K, 92.7K previous

• US Apr Average Hourly Earnings (MoM)  0.3%,4% forecast, 0.4% previous

• US Apr Nonfarm Payrolls  428K, 391K forecast, 431K previous

• US Apr Private Nonfarm Payrolls 406K, 385K forecast, 426K previous

• US Apr Manufacturing Payrolls  55K,35K forecast, 38K previous

•Canada Apr Unemployment Rate  5.2%, 5.2%  forecast,5.3% previous

•US Apr Unemployment Rate   3.6%,3.5% forecast, 3.6% previous

•US Apr Average Hourly Earnings (YoY) (YoY)  5.5%, 5.5% forecast, 5.6% previous

•US Participation Rate 62.2%, 62.4% previous

• Canada Apr Ivey PMI   66.3, 60.0 forecast, 74.2 previous

• Canada Apr Ivey PMI n.s.a 68.0,  68.4 previous

• U.S. Baker Hughes Oil Rig Count 557,552 previous

• U.S. Baker Hughes Total Rig Count 705, 698 previous

Looking Ahead - Economic Data (GMT) 

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Looking Ahead - Economic events and other releases (GMT)

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Currency Summaries

EUR/USD: The euro strengthened against the U.S. dollar on Friday as European Central Bank members talking up a return to positive rates this year boosted euro. The single currency was lifted by comments made by French central bank chief Francois Villeroy de Galhau, who said the ECB should raise its deposit rate back into positive territory this year. The ECB has been moving slowly to remove support this year, but record inflation has prompted more members to call for action. ECB policymaker Joachim Nagel, who heads Germany’s Bundesbank, also indicated support for a move sooner rather than later in separate comments on Friday.Immediate resistance can be seen at 1.0575 (38.2%fib), an upside break can trigger rise towards 1.0678(50%fib).On the downside, immediate support is seen at 1.0478(23.6%fib), a break below could take the pair towards 1.0422 (Lower BB).

GBP/USD: Britain’s pound weakened against   dollar on Friday a day after the Bank of England sent a stark warning that Britain risks a double-whammy of a recession and inflation above 10%. The BoE maintained its economic growth projection for the year at 3.75% but cut its estimates for 2023 to reflect a contraction of 0.25% from a previous estimate of 1.25% growth. Additionally, the central bank reduced its growth projection for 2024 to 0.25% from an earlier 1.0%.While BoE Governor Andrew Bailey said the forecasts did reflect a technical definition of recession, the economy is still in for a very sharp slowdown. Immediate resistance can be seen at 1.2413(38.2%fib), an upside break can trigger rise towards 1.2453 (5DMA).On the downside, immediate support is seen at 1.2297 (23.6%fib), a break below could take the pair towards 1.2226(Lower BB).

 USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday as data showed the Canadian economy adding far fewer jobs than expected and the prospect of aggressive interest rate hikes by the Federal Reserve continued to weigh on investor sentiment. The loonie fell 0.6% to 1.2905 to the greenback , after trading in a range of 1.2815 to 1.2910.On Monday, the currency touched its lowest level in more than four months at 1.2913. For the week, it fell 0.4%, its sixth straight week of declines. Canada added a modest 15,300 jobs in April, compared with estimates for a 55,000 gain, though the unemployment rate inched down to record low of 5.2% and the labor market remained very tight. Immediate resistance can be seen at 1.2909(23.6%fib), an upside break can trigger rise towards 1.2939(Higher BB).On the downside, immediate support is seen at 1.2936(38.2%fib), a break below could take the pair towards 1.2775 (50%fib).

USD/JPY: The dollar steadied against yen on Friday as aggressive monetary policy tightening in the United States boosted dollar. Data on Friday showed U.S. jobs increased more than expected in April. Average hourly earnings rose 0.3% after advancing 0.5% in March. That lowered the year-on-year increase in wages to 5.5% from 5.6% in March. The next major U.S. economic focus will be consumer price inflation data on Wednesday. This is expected to show that price pressures rose at an annual pace of 8.1% in April, just below March's reading of 8.5%.The safe haven greenback has broadly strengthened in recent weeks in response to global recession fears, and on bets that the Federal Reserve will tighten monetary policy faster than others to stem runaway inflation. Strong resistance can be seen at 130.94(23.6%fib), an upside break can trigger rise towards 131.70(Higher BB).On the downside, immediate support is seen at 130.00(5DMA), a break below could take the pair towards 129.18(38.2%fib).

Equities Recap

European shares chalked up their worst week in two months on Friday, with tech stocks and retailers feeling the brunt of selling on the prospect of bigger interest rate hikes to tame decades-high inflation.

UK's benchmark FTSE 100 closed down by  1.64 percent, Germany's Dax ended down by 1.54 percent, France’s CAC finished the day down by 1.75 percent.                

Wall Street's main indexes extended losses on Friday as investors worried that the Federal Reserve will need to be more aggressive than expected in raising interest rates to combat inflation.

Dow Jones closed down by 0.30 percent, S&P 500 closed down by 0.57  percent, Nasdaq settled down   by 1.40 % percent.

Treasuries Recap

U.S. bond yields rose on Friday and the curve steepened even after data showed wage increase pressures eased somewhat as the labor market continued on a strong footing.

The yield on 10-year Treasury notes was up 6 basis points to 3.129%.The two-year   U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 0.3 basis point at 2.727%. The 2-year/10-year yield spread   was at 40.0 basis points.

Commodities Recap

Gold rose on a weaker dollar on Friday but prospects of aggressive rate hikes from the U.S. Federal Reserve put bullion on course for a third consecutive weekly decline, while palladium fell over 8% on demand concerns.

Spot gold rose 0.3% to $1,882.78 per ounce, but was down 0.7% for the week. U.S. gold futures settled 0.4% higher at $1,882.8.

Oil prices rose nearly 1.5% on Friday, posting a second straight weekly increase as impending European Union sanctions on Russian oil raised the prospect of tighter supply and had traders shrugging off worries about global economic growth.

Brent futures rose $1.49, or 1.3%, to settle at $112.39 per barrel. U.S. West Texas Intermediate (WTI) crude climbed $1.51, or 1.4%, to end at $109.77 a barrel.

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