America Roundup: US Dollar Gains From 1-Week Low, Wall Street Ends High, Gold Falls, Oil Slumps 6% To Low In four weeks due to recession concerns – June 18, 2022
• Canada May IPPI (monthly) 1.7%, 0.5% forecast, 0.8% previous
•Canadian IPPI in May (Annual) 15.0%, previous 16.4%
• Purchases of foreign securities in Canada in April 22.23 billion, previous 46.94 billion
• Canada Apr Purchases of foreign securities by Canadians 29.20 billion, -23.98 billion previous
• US industrial production in May (Annual) 5.83%, previous 6.40%
• Manufacturing production in the United States in May (monthly) -0.1%, 0.3% forecast, 0.8% previous
• May US capacity utilization rate 79.0%, 79.2% forecast, 79.0% previous
• Industrial production (monthly) in the United States in May 0.2%, 0.4% forecast, 1.1% previous
• US Leading Index (MoM) -0.4%, -0.4% forecast, -0.3% previous
• The American oil platform Baker Hughes has 584,580
• US Baker Hughes Total Rig Count 740, previous 733
Forward-looking economic data (GMT)
• No data forthcoming
Future Outlook – Events, Other Releases (GMT)
• No significant event
EUR/USD: The euro fell against the dollar on Friday as a series of interest rate hikes by major central banks fueled concerns of a sharp economic slowdown. Markets were heading for their biggest weekly decline since the pandemic collapse of markets in March 2020, hit by growing concerns about a recession after rate hikes in the US and Britain were followed by a surprise decision in Switzerland to stifle a surge in inflation. The ECB is also facing high inflation, but perhaps a trickier task as its economies feel the headwinds even more strongly from the Russian invasion of Ukraine, which has driven up energy prices in the whole world. Immediate resistance can be seen at 1.0570 (11DMA), a break up can trigger a rise towards 1.0637 (50% fib). On the downside, immediate support is seen at 1.0445 (23.6% fib), a break below could take the pair towards 1.0332 (BB lower).
GBP/USD: The pound fell on Friday against a strengthening US dollar, with the British currency giving up gains made a day earlier after the Bank of England raised interest rates. The pound fell 0.5% against the dollar at $1.2290, off a one-week high of $1.2405 hit a day earlier. It was last at $1.23015 and was heading for a slight loss for the week, which would be its third consecutive week in the red. The pound had gained 1.4% against the dollar on Thursday, driven by the 0.25% rise in interest rates by the Bank of England. The rise surprised some investors who expected more aggressive action to quell soaring inflation in Britain. Immediate resistance can be seen at 1.2309 (38.2% fib), a break up can trigger a rise towards 1.2508 (50% fib). On the downside, immediate support is seen at 1.2180 (5DMA), a break below could take the pair towards 1.2068. (23.8% fiber).
USD/CAD: The Canadian dollar weakened to its lowest level in 19 months against its US counterpart on Friday as oil prices fell and the greenback largely rallied. The price of oil, one of Canada’s main exports, fell to its lowest level in four weeks on fears that an economic slowdown could reduce demand for energy. The loonie was trading down 0.5% at 1.3020 against the greenback, after touching its lowest level since November 2020 at 1.3078. For the week, the currency was down 1.8%, its biggest weekly drop since August last year, as investors feared aggressive central bank tightening, including the 0.75 point rate hike percentage rate increase by the US Federal Reserve on Wednesday, will derail economic growth. Immediate resistance can be seen at 1.3073 (23.6% fib), a break up can trigger a rise towards 1.3108 (BB upper). On the downside, immediate support is seen at 1.2937 (38.2% fib), a break below could take the pair towards 1.2844 (50% fib).
USD/JPY: The dollar strengthened against the Japanese yen on Friday after the Bank of Japan resisted a wave of tightening and stuck to its ultra-dovish stance, adding to rising volatility in currency-hit markets. a series of rate hikes this week. Currency markets have been rocked by one of the biggest rounds of monetary policy tightening in decades, including the Federal Reserve’s midweek three-quarters of a percentage point rate hike, the most important since 1995, and the surprise of the Swiss National Bank. decision to raise rates by 50 basis points. Japan’s central bank swam against the tide on Friday, keeping its policy settings unchanged and pledging to defend its 0.25% bond yield cap with unlimited buying. Strong resistance can be seen at 135.21 (23.6% fib), a break up can trigger a rise towards 134.85 (BB upper). On the downside, immediate support is seen at 133.89 (9DMA), a break below could take the pair towards 132.11 (38.2%fib).
Summary of actions
European stocks failed to hold on to early gains and ended on a mixed note on Friday as investors weighed the likely impact of interest rate hikes announced by central banks, including the Federal Reserve and Bank of England, on global economic growth.
Britain’s benchmark FTSE 100 index closed by. 0.41%, the German Dax ended the day up 0.67%, the French CAC ended the day down 0.06%.
U.S. stocks closed with a modest rebound on Friday but still suffered the biggest weekly percentage decline in two years as investors grappled with the growing likelihood of a recession as global central banks attempted to eradicate inflation.
The Dow Jones closed down 0.13%, the S&P 500 ended up 0.22%, the Nasdaq ended the day up 1.43%.
Summary of treasury bills
U.S. Treasury yields held near this week’s lows on Friday after five volatile days that saw them hit more than 10-year highs on expectations of aggressive rate hikes, then tumble on concerns over their impact on growth.
Yields on two-year Treasury bills, which are highly sensitive to interest rate movements, were last at 3.166% and are down from 3.456% on Tuesday, which was the highest since November 2007.
Benchmark 10-year yields were at 3.239%, after hitting 3.498% on Tuesday, the highest since April 2011.
Summary of raw materials
Oil prices fell about 6% to a four-week low on Friday on fears that interest rate hikes by major central banks could slow the global economy and reduce demand for energy.
Brent crude futures fell $6.69, or 5.6%, to $113.12 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 8.03 $, or 6.8%, to settle at $109.56.
Gold was on track to end the week lower, falling 1% on Friday as a stronger dollar and interest rate hikes from major central banks rattled the appeal of the safe-haven metal.
Spot gold was down 1% at $1,837.59 an ounce at 1:42 p.m. EDT (1742 GMT). US gold futures fell 0.5% to $1,840.60. Gold has lost 1.7% so far this week.