News

America’s Roundup: Dollar gains after Fed meeting notes hint at future rate hikes, Wall Street climbs, Gold pares losses, Oil edges higher on tight supply-May 26th,2022

Posted at 26 May 2022 / Categories Market Roundups


Market Roundup

•US Apr Goods Orders Non Defense Ex Air (MoM) 0.3%,0.5% forecast, 0.9% previous   

•Canada Profits (QoQ) 1.9%, 3.8% previous

•US Apr Core Durable Goods Orders (MoM)  0.3%,0.6% forecast,1.2% previous   

•US Apr Durable Goods Orders (MoM) 0.4%, 0.6% forecast, 0.8% previous   

•US Apr Durables Excluding Defense (MoM) 0.3%, 1.0% forecast,1.4% previous   

•US Cushing Crude Oil Inventories -0.482M,-2.403M previous

•US Crude Oil Inventories -0.482M,-0.737M forecast, -3.394M previous

Looking Ahead - Economic Data (GMT)

•No economic data ahead

Looking Ahead - Economic events and other releases (GMT)

•No events ahead

Currency Summaries

EUR/USD: The euro strengthened against dollar on Wednesday as European Central Bank officials supported ECB President Christine Lagarde’s plan for gradual monetary tightening. Lagarde gained key allies for her plan to raise rates out of negative territory in steady increments this summer, though one of her board members expressed some scepticism at the speed of the change she has signalled. Recent comments from the ECB chief broadly confirmed expectations about future rate hikes, including a 25 bps move in July. Immediate resistance can be seen at 1.0742(38.2%fib), an upside break can trigger rise towards 1.0765 (Higher BB).On the downside, immediate support is seen at 1.0663(23.6%fib), a break below could take the pair towards 1.0548 (21DMA).

GBP/USD: The pound strengthened against dollar on Wednesday as investors assessed Bank of England rate outlook. Bank of England Chief Economist Huw Pill said he thought more interest rate hikes would be needed but that the central bank is conscious too much would leave the economy stuck in recession, in an interview published on Wednesday. The Bank of England has raised rates four times since December, with markets fully pricing in another 25 basis point rate hike in June. Immediate resistance can be seen at 1.2599(50%fib),an upside break can trigger rise towards 1.2695(61.8%fib).On the downside, immediate support is seen at 1.2488 (38.2%fib), a break below could take the pair towards 1.2449(23.6%fib).

USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Wednesday, recovering from its lowest level in nearly a week, as equity markets rallied after the U.S. Federal Reserve released minutes of its latest policy meeting. Wall Street rose after the Fed minutes showed policymakers were unanimous in their sentiment that the U.S. economy was very strong as they grappled with how to rein in inflation without triggering a recession.The loonie was trading 0.1% higher at 1.2805 to the greenback , after touching its weakest intraday level since last Thursday at 1.2884 .Immediate resistance can be seen at 1.2853 (11DMA), an upside break can trigger rise towards 1.2888(23.6%fib).On the downside, immediate support is seen at 1.2794 (38.2%fib), a break below could take the pair towards 1.2718 (50%fib).

USD/JPY: The dollar edged higher against the Japanese yen on Wednesday after notes from the U.S. Federal Reserve's early May meeting showed a strong likelihood that the world's most powerful central bank will approve two more half-percentage-point rate hikes in coming months. All participants at the Fed's May 3-4 meeting backed a half-percentage-point rate increase   the first of that size in more than 20 years  and  most participants  judged that further hikes of that magnitude would  likely be appropriate  at the Fed's policy meetings in June and July, according to minutes from the meeting.Strong resistance can be seen at 128.10(11DMA), an upside break can trigger rise towards 128.62(23.6%fib).On the downside, immediate support is seen at 126.62 (38.2%fib), a break below could take the pair towards 125.96(Lower BB).

Equities Recap

European shares rose on Wednesday, lifted by resource-linked stocks and banks, with investors watching for updates from central banks on monetary policy tightening amid rising concerns of an economic slowdown.

UK's benchmark FTSE 100 closed up by 0.51 percent, Germany's Dax ended up  by 0.63percent, France’s CAC finished the day up by 0.73 percent.

Wall Street closed higher Wednesday, boosted after minutes from the Federal Reserve's latest monetary policy meeting showed policymakers unanimously felt the U.S. economy was very strong as they grappled with reining in inflation without triggering a recession..

Dow Jones closed up  by  0.60% percent, S&P 500 closed up by 0.95% percent, Nasdaq settled up by 1.51%  percent.

Treasuries Recap

Benchmark U.S. Treasury yields were little changed on Wednesday after minutes from the Federal Reserve showed policymakers agreed to hike interest rates by a half-percentage point to combat inflation and said a "very strong" economy may require reducing monetary supply.

The yield on 10-year Treasury notes  slipped 1.5 basis points to 2.745% after falling in the morning to 2.708%, a low last seen March 14.

Commodities Recap

Gold pared some losses on Wednesday after minutes from a Federal Reserve meeting suggested the central bank would stick to raising interest rates by half a percentage point in the June and July meetings.

Spot gold fell 0.7% to $1,853.80 per ounce by 4:15 p.m. ET (2015 GMT), having fallen 1.3% to $1,842.49 earlier in the session. U.S. gold futures settled down around 1% to $1,846.3.

Oil prices rose on Wednesday, buoyed by tight supplies and as U.S. refiners drove processing activity to their highest level since before the coronavirus pandemic started.

Brent crude futures for July settled up 47 cents to $114.03 a barrel, while U.S. West Texas Intermediate (WTI) crude for July delivery ended up 56 cents to $110.33 a barrel.


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