America roundup: Dollar slides for second week, Wall Street rallies, gold prices edge up, oil settles ahead of US driving season, decision to EU embargo – May 28, 2022
• April retail inventories in the US, ex-auto 1.7%, previous 2.5%
• US Apr Personal Income (MoM) 0.4%, 0.5% forecast, 0.5% previous
•US Merchandise Trade Balance in April -105.94 billion, previous -127.12 billion
• US Apr Core PCE Price Index (YoY) 4.9%, 4.9% forecast, 5.2% previous
• April US Personal Spending (monthly) 0.9%, 0.7% forecast, 1.1% previous
• US April PCE Price Index (Yearly) 6.3,6.6 previous
• US April PCE Price Index (monthly) 0.2%, previous 0.9%
•Real personal consumption (monthly) in the United States in April 0.7%, previous 0.2%
• US Apr Core PCE Price Index (MoM) 0.3%, 0.3% forecast, 0.3% prior
• United States May Michigan 5-year inflation expectations 3.00%, forecast 3.00%, previous 3.00%
• United States May Michigan Current 63.3, 63.6 forecast, 69.4 previous
• United States May Michigan Inflation Expectations 5.3%, 5.4% forecast, 5.4% previous
• Michigan US Consumer Sentiment 58.4 59.1 forecast, 65.2 previous
• United States May Michigan Consumer Expectations 55.2, 56.3 forecast, 62.5 previous
• Canada’s March budget balance -25.75 billion, previous 5.47 billion
• Canada’s budget balance in March (annual) -95.57 B, previous -69.82 B
• The American oil platform Baker Hughes has 574,576
• US Baker Hughes Total Rig Count 727, previous 728
Future Outlook – Economic Data (GMT)
• No data forthcoming
Future Outlook – Economic Events and Other Releases (GMT)
• No upcoming events
EUR/USD: The euro strengthened on Friday as traders lowered expectations of U.S. Federal Reserve interest rate hikes and improving inflation and consumer spending data dampened recession fears. Although inflation continued to rise in April, it rose less than in recent months, data showed on Friday. The personal consumption expenditure (PCE) price index rose 0.2%, the smallest increase since November 2020, after rising 0.9% in March. For the 12 months ending in April, the PCE price index rose 6.3% after jumping 6.6% in March. The euro was the main beneficiary of the decline in the dollar. The single currency was up 0.12 on the day at $1.0731. Immediate resistance can be seen at 1.0755 (38.2% fib), a break up can trigger a rise towards 1.0813 (BB upper). On the downside, immediate support is seen at 1.0706 (5DMA), a break below could take the pair towards 1.0649 (233.6%fib).
GBP/USD: The pound stabilized against the dollar on Friday, as the pound was helped by a large government spending program to support households and which economists say should support the economy in the short term. The government on Thursday announced a windfall tax of 25% on the profits of oil and gas producers to help fund a 15 billion pound ($18.9 billion) support package for households struggling to cope with soaring energy bills. The pound was up 0.28% at $1.2624 after hitting $1.2666 earlier. It is on track for a 1% gain this week. Immediate resistance can be seen at 1.2657 (38.2% fib), a break up can trigger a rise towards 1.2703 (BB upper). On the downside, immediate support is seen at 1.2579 (5DMA), a break below could take the pair towards 1.2495 (23.6%fib).
USD/CAD: The Canadian dollar hit its highest level in more than three weeks against its US counterpart on Friday, and posted its second straight weekly gain as recent volatility in global financial markets continued to ease. The loonie’s gains preceded the Bank of Canada’s interest rate decision next Wednesday. The central bank is expected to hike half a percentage point for a second straight meeting to tackle soaring inflation. The loonie traded up 0.3% at 1.2730 against the greenback, after hitting its highest level since May 5 at 1.2729. For the week, the currency rose 0.8%. Immediate resistance can be seen at 1.3423 (300DMA), a break up can trigger a rise towards 1.3500 (psychological level). On the downside, immediate support is seen at 1.3283 (daily low), a break below could take the pair towards 1.3220 (23.6%fib).
USD/JPY: The dollar fell slightly against the Japanese yen on Friday as investors took reassurance on Federal Reserve minutes showing that a pause in its rate hikes is expected later this year. The Fed’s May meeting minutes released Wednesday confirmed two more hikes of 50 basis points each in June and July, but policymakers also hinted at the possibility of a pause later in the year. Signs that aggressive Fed action could already slow economic growth are also emerging. Thursday’s data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week as the job market remained tight. Strong resistance can be seen at 127.28(5DMA), a break up can trigger a rise towards 128.53(23.6%fib). On the downside, immediate support is seen at 126.53 (BB lower), a break below could take the pair towards 125.78 (38.2%fib).
Summary of actions
European stocks closed higher on Friday, extending recent gains, amid easing concerns over monetary tightening by the Federal Reserve and some upbeat earnings updates from U.S. retailers.
Britain’s benchmark FTSE 100 closed up 0.27%, Germany’s Dax ended up 1.62%, France’s CAC ended the day up 1.64%.
Wall Street closed sharply higher on Friday as signs of a spike in inflation and consumer resilience sent investors into the long holiday weekend with growing optimism about the Federal Reserve’s ability to tighten its monetary policy without tipping the economy into recession.
The Dow Jones closed up 1.76%, the S&P 500 last rose 2.47%, the Nasdaq rose 3.44%.
Summary of treasury bills
U.S. Treasury yields closed near six-week lows on Friday as concerns over growth and signs of a spike in inflation led investors to speculate that the Federal Reserve might not raise its bonds. rate as expected.
Benchmark 10-year yields have fallen from 3.5-year highs hit earlier this month on fears that the US central bank’s aggressive rate hikes could tip the economy into recession.
Summary of raw materials
Gold prices rose slightly on Friday and were heading for a second consecutive weekly gain supported by a decline in the dollar and US Treasury yields, as fears of aggressive policy tightening by the Federal Reserve eased. faded.
Spot gold gained 0.1% to $1,852.22 an ounce at 2:16 p.m. ET (6:16 p.m. GMT). It rose about 0.4% for the week. US gold futures rose 0.2% to $1,851.3.
Oil prices rose on Friday, ending the week with gains ahead of the U.S. Memorial Day holiday weekend, the start of peak U.S. demand season and as European nations trade on whether to impose an outright ban on Russian crude oil.
Brent crude rose $2.03, or 1.7%, to settle at $119.43. U.S. West Texas Intermediate (WTI) crude rose 98 cents, or 0.9%, to settle at $115.07 a barrel. For the week, Brent rose 6% while WTI gained 1.5%.