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America’s Roundup: Dollar slips after CPI data as Fed expectations in check, Wall Street ends sharply lower, Gold bounces, Oil up more than 5%, as Russia-EU energy quarrel intensifies-May 12th,2022

Posted at 12 May 2022 / Categories Market Roundups


Market Roundup

•US Apr CPI Index, s.a 288.66,287.71 previous

•US Apr Real Earnings (MoM)  0.0%,-0.6% forecast, -1.1% previous

•US Apr CPI, n.s.a (MoM)  0.56%,1.34% previous

•US Apr CPI (YoY) 8.3%,8.1% forecast ,8.5% previous

•US Apr Core CPI (MoM) 0.6%,0.4% forecast , 0.3% previous

•US Apr Core CPI (YoY)  6.2%,6.0% forecast , 6.5% previous

•US Apr CPI (MoM) 0.3%, 0.2% forecast , 1.2% previous

•US Cushing Crude Oil Inventories -0.587M,1.379M previous

•US Crude Oil Inventories  8.487M, -0.457M forecast , 1.302M previous

Looking Ahead - Economic Data (GMT)

•03:00 New Zealand  Inflation Expectations (QoQ)3.3% previous

•05:00 Japan Apr Economy Watchers Current Index  47.8 previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events

Currency Summaries

EUR/USD: The euro steadied against the U.S. dollar on Wednesday on expectation European Central Bank will raise its benchmark interest rate in July for the first time in more than a decade to fight record-high inflation, with some policymakers even hinting at further hikes after the first. With ECB policymakers clamouring for a rate hike for weeks, President Christine Lagarde has finally thrown her weight behind such a move, saying the central bank was likely to end its stimulus programme early in the third quarter, followed by a rate hike that could come just "a few weeks" later. Inflation hit 7.5% in the euro zone last month and even measures that strip out food and energy prices rose above the ECB's 2% target. 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 1.0480(23.6%fib), a break below could take the pair towards 1.0422 (Lower BB).

GBP/USD: Sterling initially gained some ground against dollar on Wednesday after U.S. CPI readings but dipped as traders attention turned to Thursday UK GDP data. The CPI release showed annual inflation at 8.3% versus the Reuters consensus forecast of 8.1%, initially triggering a retreat from early U.S. highs by 1.2365 down to 1.2278 near May 9's 1.2262 2022 low. Sterling shorts are hoping the UK gross domestic product estimate for March comes in below the forecast at 0600 GMT on Thursday. A negative number could weigh on the pound by sharpening fears of a UK recession. The pound was hit hard by last week's warnings from the Bank of England about a UK recession and 10% inflation, alongside its 25 basis-point rate hike to 1%. Immediate resistance can be seen at 1.2301(5DMA), an upside break can trigger rise towards 1.2345(38.2%fib).On the downside, immediate support is seen at 1.2215 (23.6%fib), a break below could take the pair towards 1.2116(Lower BB).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as oil prices rallied, but gains for the currency were limited by investor nervousness about the global economic outlook. The price of oil, one of Canada's major exports, rebounded after plunging nearly 10% in the previous two sessions, buoyed by supply concerns as flows of Russian gas to Europe fell. U.S. crude oil futures settled nearly 6% higher at $105.71 a barrel. The loonie was trading 0.3% higher at 1.2988 to the greenback, or 76.99 U.S. cents, after trading in a range of 1.2922 to 1.3039. On Tuesday, the currency touched its weakest level in 18 months at 1.3052. Immediate resistance can be seen at 1.3035 (38.2%fib), an upside break can trigger rise towards 1.3094(Higher BB).On the downside, immediate support is seen at 1.2981 (5 DMA), a break below could take the pair towards 1.2925 (38.2%fib).

USD/JPY: The dollar edged lower against yen on Wednesday after U.S. consumer price index data indicated that inflation is likely to stay hot for a while and keep the Federal Reserve's foot on the brakes to cool demand.The consumer price index rose 0.3% last month, the smallest gain since August, the Labor Department said on Wednesday, versus the 1.2% month-to-month surge in the CPI in March, the largest advance since September 2005. U.S. consumer price growth slowed in April as gasoline prices eased off record highs, suggesting inflation has probably peaked, though it is likely to stay hot for a while. Strong resistance can be seen at 130.76(23.6%fib), an upside break can trigger rise towards 131.72 (Higher BB).On the downside, immediate support is seen at 129.64 (5DMA), a break below could take the pair towards 128.32(38.2%fib).

Equities Recap

European stocks locked in gains for a second straight session on Wednesday as strong earnings and a surge in economically sensitive sectors boosted sentiment after U.S. inflation growth slowed sharply in April.

UK's benchmark FTSE 100 closed up by  1.44 percent, Germany's Dax ended up by 2.17 percent, France’s CAC finished the day up by 2.50 percent.                

U.S. stocks ended sharply lower on Wednesday, with the Nasdaq dropping more than 3% and the Dow falling for a fifth straight day after U.S. inflation data did little to ease investor worries over the outlook for interest rates and the economy.

Dow Jones closed down by 1.02%percent, S&P 500 closed down by 1.65% percent, Nasdaq settled down  by  3.18 % percent.

Treasuries Recap

Treasury yields rebounded on Wednesday after U.S. consumer price data showed the pace of inflation slowed in April but perhaps has not peaked as prices rose more than economists expected and ensured the Federal Reserve will keep monetary policy tight.

The yield on 10-year Treasury notes   rose 3.1 basis points to 3.025%, while the two-year   note's yield, which often reflects the Fed rate outlook, hit a more than three-year high of 2.858%.

Commodities Recap

Gold resumed its climb on Wednesday after a knee-jerk retreat tied to the release of U.S. inflation data, as the dollar slipped with investors latching on to a slight cooling of consumer prices.

Spot gold was up 0.8% at $1,852.65 per ounce by 02:05 p.m. EDT (1814 GMT). U.S. gold futures settled up 0.7% at$1,853.70.

Oil prices rose more than 5% on Wednesday after flows of Russian gas to Europe fell and Russia sanctioned some European gas companies, adding to uncertainty in world energy markets.

Brent crude settled up $5.05, or 4.9%, to $107.51 a barrel, while U.S. West Texas Intermediate crude climbed $5.95 a barrel to $105.71, a 6% increase.


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