EURUSD
- Stable EUR/USD Movement: The EUR/USD pair remains stable after recovering from previous session losses, showing resilience amid market fluctuations.
- Focus on US CPI and FOMC Events: The primary market focus was on the US Consumer Price Index (CPI) and the Federal Open Market Committee (FOMC) events. The Federal Reserve maintained interest rates steady and hinted that rate cuts might not commence until December.
- Political Concerns Temporarily Set Aside: Despite fresh political concerns in Europe following the European parliamentary elections, the EUR/USD market has temporarily shifted focus away from these issues.
- ECB's Cautious Stance on Rate Cuts: ECB Vice President de Guindos advised a slow approach to reducing interest rates due to significant uncertainties in the inflation outlook, reflecting a cautious stance by the central bank.
- Upcoming Eurozone Industrial Production Data: Eurozone Industrial Production figures for April are due on Thursday, with market expectations indicating a decline to 0.2% month-on-month.
| SMA (20) | Rising |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Falling |
|
|
Closing statement: The EUR/USD pair remains stable, navigating through the aftermath of political concerns in Europe and focusing on key economic events in the US. The Federal Reserve's decision to keep interest rates steady and the ECB's cautious approach to rate cuts underscore a landscape of economic uncertainty. Upcoming Eurozone Industrial Production data will further influence market sentiment. Traders should closely monitor these developments for potential impacts on the EUR/USD trajectory.
GBPUSD
- GBP/USD Drifts Lower: The GBP/USD pair is trending lower on Thursday, influenced by a stronger US Dollar driven by hawkish sentiment from the Federal Reserve.
- US Inflation Data: US inflation remained flat in May, with the Consumer Price Index (CPI) easing to 3.3% year-on-year from 3.4% in April, below market expectations of 3.4%. This contributed to some downward pressure on the US Dollar initially.
- Fed's Inflation Projections: The Federal Reserve projected a single quarter-percentage-point rate cut for the year, with the end-of-year inflation forecast revised up to 2.6% from the previous 2.4%. This reflects rising inflation estimates and a cautious approach to rate cuts.
- Fed Chair Powell's Remarks: Fed Chair Jerome Powell emphasized that a single quarter-percentage-point rate cut would have a minimal impact on the US economy, highlighting the importance of the overall policy direction rather than individual rate changes.
- Upcoming US Economic Data: Investors are focusing on the release of the US weekly Initial Jobless Claims, the Producer Prices Index (PPI), and a speech by the Fed's John Williams, which are expected later on Thursday and could influence market movements.
| SMA (20) | Rising |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: The GBP/USD pair is experiencing downward pressure amid a hawkish stance from the Federal Reserve and a flat US inflation figure for May. Despite lower-than-expected inflation, the Fed's revised projections and cautious approach to rate cuts are bolstering the US Dollar. Market participants are now awaiting key US economic data releases, including Jobless Claims and PPI, which will provide further direction for the GBP/USD pair. Traders should remain vigilant as these developments unfold.
GOLD
- Gold Price Decline: Gold is trading lower for the first time this week, aiming to retest the $2,300 level early Thursday.
- Impact of US CPI Report: A softer-than-expected US CPI report has raised expectations for Federal Reserve interest rate cuts this year, providing a temporary boost to gold buyers.
- Revised Fed Projections: The updated Summary of Economic Projections, or dot-plot, suggests that policymakers now anticipate only one rate cut in 2024, down from the previous projection of three rate cuts in March and the widely expected two rate cuts.
- Hawkish Fed Comments: Fed Chair Jerome Powell's hawkish comments during the post-policy meeting press conference, where he noted that recent inflation readings have shown easing, have also influenced market sentiment.
- Focus on Upcoming US Data: With the major events of ‘Super Wednesday’ behind, market attention now shifts to upcoming top-tier US economic data, including the Producer Price Index (PPI) report, which could challenge the Fed’s hawkish stance on interest rates.
Closing statement: Gold prices are under pressure, retreating towards the $2,300 mark amid a softer-than-expected US CPI report that has heightened expectations for Federal Reserve rate cuts this year. Despite this, the Fed's revised projections indicate only one rate cut in 2024, accompanied by hawkish remarks from Fed Chair Jerome Powell. As the market digests these developments, attention now turns to key US economic data releases, such as the PPI report, which may further influence the Fed's interest rate outlook and impact gold prices. Traders should remain alert to these forthcoming economic indicators.
CRUDE OIL
- Mild Negative Bias: West Texas Intermediate (WTI) US crude oil prices exhibit a mild negative bias during the Asian session on Thursday but remain close to the two-week high reached the previous day.
- US Crude Inventories Increase: Data from the Energy Information Administration (EIA) showed a 3.7 million barrel increase in US crude inventories for the first week of June.
- Reduced Oil Demand Growth Forecast: The International Energy Agency (IEA) in its monthly report revised down its forecast for oil demand growth in 2024 by 100,000 barrels per day to 960,000 bpd.
- Impact of Fed's Hawkish Stance: Continued US Dollar (USD) buying, driven by the Federal Reserve's unexpected hawkish stance, puts pressure on USD-denominated commodities, including crude oil prices.
- Upcoming US Economic Data: Market participants are now focusing on the upcoming US economic data releases, specifically the Producer Price Index (PPI) and weekly Initial Jobless Claims data, due later in the early North American session.
| SMA (20) | Falling |
|
|
| RSI (14) | Rising |
|
|
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: Crude oil prices are experiencing a mild negative bias but remain close to recent highs. This movement follows the EIA's report of increased US crude inventories and the IEA's downward revision of oil demand growth for 2024. Additionally, the Federal Reserve's hawkish stance has led to further USD buying, pressuring oil prices. Market participants will now look to upcoming US economic data, including the PPI and jobless claims, which could provide further direction for crude oil prices.
DAX
- German Inflation Rates: The finalized annual inflation rate in Germany rose from 2.2% to 2.4% in May, aligning with preliminary figures, but had a limited impact on market risk appetite.
- Mixed Signals from Chinese Inflation: China's inflation figures presented mixed signals before the European market opened. Producer prices declined by 1.4% year-on-year in May, following a 2.5% decline in April, while consumer prices increased by 0.3% in May, the same rate as in April.
- Political Stability in France: French President Emmanuel Macron eased fears of a far-right government by discussing an alliance to maintain political stability and confirmed he would not resign.
- German Wholesale Prices: The Federal Statistical Office (Destatis) reported that German wholesale prices in May 2024 rose slightly by 0.1% compared to April 2024.
- Eurozone Industrial Production: Later in the morning session, industrial production numbers for the Eurozone will be significant. Economists expect a 0.2% increase in industrial production in April, following a 0.6% rise in March.
| SMA (20) | Rising |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Falling |
|
|
Closing statement: The DAX faces a mix of influences with limited impact from German inflation rates and mixed signals from Chinese inflation data. French political stability was reassured by President Macron, which helped ease market concerns. A slight increase in German wholesale prices was noted, and attention now turns to the upcoming Eurozone industrial production numbers, which are expected to show moderate growth. These factors collectively shape the cautious market sentiment as investors await further data.