America roundup: Dollar struggles on Fed bets, gold rangebound, oil climbs above $121 a barrel as China eases restrictions, EU meets on 31 May 2022


Market overview

• Canada Current Account (Q1) 5.0B, forecast 3.2B, -0.8B previous

• US 3-Month 1.060% Previous Auction

• French 6-month BTF auction -0.432%, previous -0.400%

• Auction of French 3-month BTFs -0.561%, -0.603% previous

• French 12-month BTF auction 0.092%, previous 0.051%

Future Outlook – Economic Data (GMT)

• 01:00 New Zealand ANZ May Business Confidence -42.0 previous

• 01:00 New Zealand May NBNZ Own Activity 8.0% previous

• 01:30 Australia Gross operating profit (QT) (Q1) 4.0% forecast, 2.0% previous

• 01:30 Australian Business Inventories (Monthly) (Q1) 1.0% forecast, 1.1% prior

• 01:30 Australia April Private Sector Credit (MoM) 0.4% previous

• 01:30 Australian current account (Q1) 13.4 billion forecast, 12.7 billion previous

• 01:30 Canada May Non-manufacturing PMI 41.9 previous

• 01:30 Chinese Composite PMI for May 42.7 previous

• 01:30 Australia Apr Building Approvals (MoM) 2.0% forecast, -18.5% previous

• 01:30 Australia April Private Home Approvals -3.0% previous

• 05:00 April construction orders in Japan (Yearly) -21.2% previous

Future Outlook – Economic Events and Other Releases (GMT)

• No significant event

Currency summaries

EUR/USD: The euro strengthened on Monday after preliminary inflation data from the bloc came in stronger than expected. In May, consumer prices in the German state of North Rhine-Westphalia were 8.1% higher than a year earlier, above expectations for the consumer price index German. Driven by rising energy prices, German import prices were 31.7% higher in April than a year earlier. year, the largest increase since September 1974. Pan-German consumer price data will be released later on Monday, with eurozone figures due on Tuesday. Immediate resistance can be seen at 1.0785 (38.2% fib), a break up can trigger a rise towards 1.0798 (BB upper). On the downside, immediate support is seen at 1.0729 (5DMA), a break below could take the pair towards 1.0674 (233.6%fib).

GBP/USD: The pound stabilized against the dollar on Monday as the risk-sensitive currency benefited from improved sentiment. As markets readjusted expectations of Federal Reserve rate hikes lower, the dollar index weakened more than 3.5% from its peak in mid-May. This helped push the pound higher after it hit its lowest level since March 2020 earlier this month. Trade was likely to be light until Monday as US stock and bond markets closed for the Memorial Day bank holiday, while the UK calendar looks light this week with markets closed Thursday and Friday for the Memorial Day bank holiday. Spring and the Queen’s Platinum Jubilee. Immediate resistance can be seen at 1.2863 (23.6% fib), a break up can trigger a rise towards 1.2741 (BB ​​upper). On the downside, immediate support is seen at 1.2621 (5DMA), a break below could take the pair towards 1.2582 (38.2%fib).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday, adding to recent gains as the easing of COVID restrictions in China boosted investor sentiment and data showed Canada had the most large current account surplus in almost 14 years. Oil prices rose to their highest level in more than two months as traders waited to see if a European Union meeting would reach an agreement on a ban on Russian oil imports. U.S. crude rose 0.6% to $115.7 a barrel, while the Canadian dollar traded 0.4% at 1.2673 against the greenback, its strongest since April 22. Immediate resistance can be seen at 1.2710 (38.2% fib), an upside break may trigger a rise towards 1.2784 (50% fib). On the downside, immediate support is seen at 1.2624 (23.6% fib), a break below could take the pair towards 1.2573 (BB lower).

USD/JPY: The dollar rose slightly against the Japanese yen on Monday after the Bank of Japan stuck to a strong easing. Bank of Japan Governor Haruhiko Kuroda pledged on Monday to patiently stick to strong monetary easing to help the economy recover from the COVID-19-induced slump, rejecting any suggestion of a waiver. to its recovery policy. Kuroda told parliament that the yen was regaining stability after its recent rapid weakening, which was “undesirable”, adding that the situation was due to the weaker dollar. The Japanese currency weakened to its lowest level in two decades past 131 to the dollar earlier this month, stoking concerns about the rising cost of living. Strong resistance can be seen at 128.43(23.6%fib), a break up can trigger a rise towards 128.69(21DMA). On the downside, immediate support is seen at 127.45 (daily low), a break below could take the pair towards 127.04 (38.2%fib).

Summary of actions

European stocks closed higher on Monday as additional stimulus announced by the Chinese government and the easing of some coronavirus restrictions in the country sparked optimism about growth in the world’s second-largest economy and helped support the feeling.

Britain’s benchmark FTSE 100 closed up 0.19%, Germany’s Dax ended up 0.79%, France’s CAC ended the day up 0.72%.

Wall Street was closed due to the Memorial Day holiday.

Summary of treasury bills

The US bond market remained closed due to Memorial Day.

Summary of raw materials

Gold prices held firm Monday in mostly limited trade, helped by a weaker dollar, as investors lowered expectations for further aggressive monetary policy tightening in the United States.

Spot gold edged up 0.1% to $1,854.49 an ounce at 2:18 p.m. ET (6:18 p.m. GMT). US gold futures rose 0.04% to $1,858.00.

Oil prices soared above $121 a barrel on Monday, hitting a two-month high as China eased COVID-19 restrictions and traders believed the European Union would finally reach a deal to ban imports of Russian oil.

Brent crude futures for July, which expires Tuesday, settled down $2.24, or 1.9%, at $121.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $1.99, or 1.7%, to $117.06 a barrel at 6:03 p.m. GMT.


Comments are closed.