EURUSD
- EUR/USD saw a 0.1% increase, reaching 1.0865, driven by positive German industrial order data for May. The data revealed a significant month-on-month rise of 6.4%, surpassing expectations of a 1.2% increase.
- The European Central Bank (ECB) is widely anticipated to raise interest rates again later this month. Joachim Nagel, a member of the ECB's Governing Council, expressed that further rate hikes are likely, although decisions will still depend on incoming data.
- Economic concerns in Europe have heightened as recent data indicated a contraction in eurozone business activity last month.
- The U.S. dollar experienced a slight decline during early European trading hours on Thursday, retracing some of its gains from the previous session, following the release of minutes from the Federal Reserve's recent meeting, which indicated the potential for another rate hike later in the month.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling |  | ||
| MACD (12, 26, 9) | Slightly Falling | |
Closing statement: EUR/USD witnessed a modest increase as German industrial order data surpassed expectations. The European Central Bank is expected to proceed with interest rate hikes, with indications of further increases in the future. Economic worries have arisen in Europe due to the contraction in eurozone business activity. The U.S. dollar retraced some of its gains after the Federal Reserve's meeting minutes suggested the likelihood of another rate hike later this month.
GBPUSD
- The pound remained relatively stable against the dollar on Wednesday as discussions continued regarding the necessary extent of Bank of England (BoE) actions to control inflation. Some experts suggested the need for just two more rate hikes, while others expressed concerns over the possibility of multiple hikes.
- JPMorgan highlighted the risk that the BoE might increase rates to 7% from the current 5%, citing concerns about the central bank's ability to bring inflation back to its 2% target.
- GBP/USD recorded a 0.16% increase, reaching 1.2723 in morning trading.
- The DXY, which tracks the dollar against a basket of six other major currencies, experienced a 0.1% decline, settling at 102.945, following a 0.5% rise overnight.
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Slightly Falling | |
Closing statement: GBP/USD remained relatively unchanged as discussions persisted about the Bank of England's approach to tackling inflation, with differing opinions on the required number of rate hikes. JPMorgan cautioned about the potential for rates to rise to 7% amid concerns over the BoE's ability to bring inflation back to its target. GBP/USD saw a slight increase in morning trading, while the DXY, which measures the dollar against a basket of currencies, retreated slightly from its overnight gains.
GOLD
- Gold prices stabilized on Thursday after experiencing a decline in the previous session following the release of the Federal Reserve's June meeting minutes. The minutes indicated broad support among policymakers for additional rate hikes, which had a negative impact on the outlook for metal markets.
- The Fed minutes revealed that nearly all members of the central bank backed further rate increases in the coming months, citing concerns about persistent inflation and an overheating labor market.
- The release of the Fed minutes led to an increase in expectations for a rate hike in July, with the market now pricing in a 90.5% probability of a 25-basis point increase during the late-July meeting.
- Higher interest rates are unfavorable for non-yielding assets like gold because they elevate the opportunity cost of holding such assets.
Closing statement: Gold prices stabilized after a decline driven by the Federal Reserve's meeting minutes, which indicated strong support for additional rate hikes. Market expectations for a rate increase in July heightened, adversely affecting the outlook for gold. Rising interest rates create a challenging environment for non-yielding assets like gold due to increased opportunity costs associated with holding such assets.
CRUDE OIL
- Crude oil prices declined in Asian trade on Thursday due to concerns about a sluggish demand recovery in China, the world's largest crude importer. These concerns overshadowed the positive impact of supply cuts by top exporters Saudi Arabia and Russia.
- Lingering demand worries persisted regarding China's economic recovery following the easing of pandemic restrictions, compounded by global macroeconomic challenges and central bank interest rate hikes.
- Market sources indicated a decrease of approximately 4.4 million barrels in U.S. crude stocks for the week ending June 30. However, gasoline and distillate inventories witnessed an increase, according to the American Petroleum Institute figures.
- The Energy Information Administration is scheduled to release data on U.S. inventories later in the day, which is expected to provide further insights for traders.
| SMA (20) | Slightly Falling | |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices experienced a decline as concerns regarding a slow demand recovery in China overshadowed the impact of supply cuts by major exporters. Lingering worries persisted due to China's economic recovery post-pandemic, alongside global macroeconomic challenges, and central bank interest rate hikes. U.S. crude stocks saw a decline, while gasoline and distillate inventories increased. Traders will eagerly await the release of Energy Information Administration data for more clarity on the oil market.
DAX
- European stock markets experienced significant declines on Thursday, driven by the release of the Federal Reserve's hawkish meeting minutes and weak economic signals, which negatively impacted risk sentiment.
- German factory orders provided some positive news, rising by 6.4% in May compared to the previous month. This exceeded expectations and marked an improvement from the 0.4% decline in the prior month. However, this could potentially contribute to the European Central Bank's decision to continue its tightening cycle beyond the July meeting.
- Despite the positive data in May and April, a three-month comparison revealed a 6.1% decrease in new orders from March to May compared to the previous three months, indicating a slowdown in demand.
- Thomas Gitzel, chief economist at VP Bank Group, emphasized the importance of new orders for the export-driven German economy and stated that the situation remains critical.
| SMA (20) | Slightly Falling | | |
| RSI (14) | Falling | |
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| MACD (12, 26, 9) | Slightly Falling | |
Closing statement: European stock markets faced significant declines following the release of the Federal Reserve's hawkish meeting minutes and weak economic signals. Although German factory orders in May showed improvement, a three-month comparison pointed to a slowdown in demand. The critical nature of new orders for Germany's export-heavy economy underscores the ongoing challenges faced by the region.