EURUSD
- EUR/USD rose 0.07% to 1.0777, bouncing back from a seven-week low after stronger-than-expected German producer prices for April.
- German producer prices for April came in stronger than anticipated, adding to expectations of more interest rate hikes by the European Central Bank (ECB).
- ECB's Isabel Schnabel is scheduled to speak later in the day, likely emphasizing the need for raising borrowing costs until core inflation declines sustainably.
- The U.S. dollar slightly weakened in early European trade but remained near a two-month high due to strong labour data and optimism regarding the avoidance of a U.S. debt default.
- Fed fund futures prices indicate a 33% chance of a 25-basis points rate increase by the Federal Reserve next month, compared to a 10% chance estimated a week ago.
| SMA (20) | Slightly Falling |  | |||
| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling | |
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Closing statement: EUR/USD experienced a minor recovery from its recent lows as stronger German producer prices fuelled expectations of potential interest rate hikes. Market participants will closely monitor ECB's Isabel Schnabel's speech and the evolving strength of the U.S. dollar, influenced by labour data and developments regarding the U.S. debt situation, for further guidance on the currency pair's direction.
GBPUSD
- GBP/USD traded flat around 1.2400, showing a slight recovery after facing pressure from a stronger U.S. dollar in the previous session.
- Bank of England policymaker Jonathan Haskel is scheduled to speak later in the session, and his comments confirming the possibility of additional rate hikes, considering the tight labour market and high inflation, could provide support for sterling.
- The DXY, which tracks the U.S. dollar against six major currencies, declined 0.2% to 103.267, slightly below the two-month high reached on Thursday at 103.630.
- The dollar index is poised to register gains of just under 1% for the week, fueled by positive news of constructive talks to resolve the current debt ceiling issue in Washington. This has boosted optimism that a deal can be reached, mitigating the risk of a damaging debt default.
| SMA (20) | Neutral | |||
| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Slightly Falling | |
Closing statement:GBP/USD remained steady around 1.2400, with the focus shifting to Bank of England policymaker Jonathan Haskel's upcoming speech. Traders will be attentive to his remarks regarding the potential for future rate increases, given the tight labor market and persistently high inflation. Meanwhile, the U.S. dollar experienced a modest retreat against a basket of currencies, driven by the hope of a resolution to the debt ceiling impasse, which has buoyed market sentiment.
GOLD
- Gold prices showed a slight rebound on Friday after experiencing significant declines below important levels earlier in the week. The improved sentiment surrounding a potential U.S. debt deal led traders to move away from safe-haven assets.
- Attention is now shifting to further signals on monetary policy from the Federal Reserve as traders seek clarity. The focus will be on Federal Reserve Chair Jerome Powell's speech scheduled for later Friday.
- Concerns about the U.S. banking sector have diminished, and recent inflation data has remained stubbornly high. Additionally, Thursday's jobless claims data indicated a relatively tight labour market, with a larger-than-expected drop in new claims for unemployment benefits.
- Several Fed officials have expressed worries this week that inflation in the U.S. is not cooling quickly enough to support a pause in the rate hike cycle scheduled for June. Chair Jerome Powell's upcoming speech is anticipated to provide additional insights.
- Market attention is currently cantered on a panel discussion featuring Fed Chair Jerome Powell at a conference in Washington, D.C. Traders are eager to gather more clues regarding the central bank's monetary policy. Overall, the consensus among Fed speakers this week has been that inflation remains elevated.
Closing statement: Gold prices recovered slightly as market sentiment improved following the positive developments surrounding a potential U.S. debt deal. Traders are now closely monitoring Federal Reserve Chair Jerome Powell's speech for further indications of the central bank's stance on monetary policy. Concerns over the U.S. banking sector have subsided, and inflation remains a key area of focus for market participants.
CRUDE OIL
- Crude oil prices experienced an increase in Asian trade on Friday, with expectations of settling higher for the week. Optimism surrounding the resolution of the U.S. debt ceiling issue outweighed concerns about oversupply and worsening economic conditions.
- The market was uplifted by the Biden administration's announcement of plans to replenish the Strategic Petroleum Reserve and indications of rising fuel demand in the United States ahead of the summer season.
- Despite these positive factors, the overall outlook for oil markets remained bleak, mainly due to weak economic data from China. Reports of lower-than-expected industrial production and retail sales indicated a slowdown in the country's post-COVID recovery.
- The strength of the U.S. dollar limited the extent of gains in crude oil markets, as it increased the cost of commodities for international buyers.
- Ongoing monitoring of the U.S. debt ceiling situation, economic conditions, and dollar strength will be crucial in shaping the future trajectory of crude oil prices.
| SMA (20) | Falling | |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: Crude oil prices witnessed a rise in Asian trade, driven by optimism surrounding the U.S. debt ceiling resolution and indications of increased fuel demand in the United States. However, concerns persist due to weak economic data from China and the impact of a stronger U.S. dollar. Continued monitoring of these factors will be important in understanding the direction of crude oil markets.
DAX
- European stock markets showed gains on Friday, driven by the overall optimism surrounding the resolution of the U.S. debt ceiling issue.
- The DAX index in Germany rose by 0.25%, while the FTSE 100 in the U.K. increased by 0.15%, and the CAC 40 in France saw a rise of 0.57%.
- The DAX index is approaching its all-time highs, which were reached in November 2021, and is considered technically positive for the medium to long term.
- Germany's Producer Price Index (PPI) for April surprised expectations, with a monthly increase of 0.3% instead of the anticipated 0.5% decline. The annual figure rose by 4.1% compared to the forecasted 4.0%.
- European Central Bank Vice President Luis de Guindos expressed concerns about the accelerating inflation in service industries, highlighting his attention to this particular sector.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement:European stock markets experienced positive momentum on Friday, buoyed by the global optimism surrounding the resolution of the U.S. debt ceiling issue. The DAX index in Germany, in particular, is nearing its all-time highs, while Germany's PPI data and the remarks from ECB Vice President Luis de Guindos added further insights into the economic landscape.