EURUSD
- US Inflation Eased in April: Inflationary pressures in the US have decreased in April, but this progress is not sufficient for the Federal Reserve to consider lowering interest rates in the near future.
- Fed Chair's Stance: Jerome Powell, the Chair of the Federal Reserve, emphasized the need for more data to be confident that inflation is on a steady decline towards the 2% target before making any changes to the interest rates.
- Atlanta Fed President's View: Raphael Bostic, President of the Atlanta Federal Reserve, acknowledged signs of cooling inflation from the recent CPI report. However, he prefers to observe data from May and June to ensure that inflation does not reverse course.
- Upcoming Fed Speakers: Several Federal Reserve officials, including Bostic, Barr, Waller, Jefferson, and Mester, are scheduled to speak on Monday, potentially providing further insights into the Fed's future policy actions.
- ECB Policymaker's Statement: Isabel Schnabel, a policymaker from the European Central Bank, indicated that the ECB might reduce interest rates in June. However, she also warned of potential further cuts in borrowing costs due to the uncertain economic outlook.
| SMA (20) | Rising |
|
|
| RSI (14) | Rising |
|
|
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: The EUR/USD pair is influenced by differing monetary policy expectations on both sides of the Atlantic. In the US, despite easing inflation in April, Federal Reserve officials, including Chair Jerome Powell and Atlanta Fed President Raphael Bostic, stress the need for more data before committing to any rate cuts. Meanwhile, in Europe, ECB policymaker Isabel Schnabel hinted at a possible rate cut in June but cautioned about further reductions amid economic uncertainty. As key Fed officials prepare to speak on Monday, their insights could significantly impact market expectations and the future trajectory of the EUR/USD pair.
GBPUSD
- US Inflation Slows in April: Data from April indicates that US consumer inflation slowed to 0.3%, raising market expectations for potential Federal Reserve rate reductions in 2024.
- Fed's Michelle Bowman on Inflation Progress: Federal Reserve Board of Governors member Michelle Bowman commented that progress on inflation may not be as steady as anticipated, suggesting ongoing concerns about achieving the Fed’s inflation targets.
- Richmond Fed President's View on Inflation: Richmond Fed President Thomas Barkin noted that while inflation is easing, it will require more time to reach the Fed’s 2% target, reinforcing a cautious approach to rate cuts.
- UK Interest Rate Expectations: In the UK, investors anticipate a potential 60 basis points interest rate cut by the Bank of England in 2024, with the first cut expected in August.
- Upcoming UK CPI Data: The UK Consumer Price Index (CPI) data for April, to be published on Wednesday, is forecasted to show an annual rise of 2.7%. This data is expected to significantly influence the Pound Sterling (GBP).
| SMA (20) | Rising |
|
|
| RSI (14) | Rising |
|
|
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: The GBP/USD pair is navigating a complex landscape shaped by inflation trends and central bank expectations on both sides of the Atlantic. In the US, despite the slowdown in consumer inflation in April, Fed officials like Michelle Bowman and Thomas Barkin caution that achieving steady progress towards the 2% target will take more time. Meanwhile, in the UK, anticipation of a 60 basis points interest rate cut by the Bank of England in 2024, alongside the forthcoming April CPI data, is set to play a crucial role in determining the Pound Sterling's trajectory. As these factors unfold, they will be pivotal in shaping the GBP/USD exchange rate.
GOLD
- Record High Gold Prices: Gold prices surged on Monday, reaching a record high near $2,550, driven by strong buying momentum.
- Fed Chair Jerome Powell’s Influence: Fed Chair Jerome Powell’s recent speech, indicating that an interest rate hike is not imminent, has bolstered investor confidence in gold.
- China’s Stabilization Efforts: China’s announcement of historic measures to stabilize its crisis-hit property sector has provided additional support to gold prices, given China’s status as a top gold consumer.
- PBOC Gold Reserves Increase: The People’s Bank of China (PBOC) reported an 18th consecutive month of increasing gold reserves in April, reinforcing a positive outlook for gold.
- Geopolitical Concerns: Safe-haven demand for gold has been further fueled by concerns over the alleged death of Iran’s President Ebrahim Raisi in a helicopter crash, adding to investor anxiety.
Closing statement: Gold prices have gained significant momentum, reaching new record highs near $2,550, fuelled by a combination of global economic and geopolitical factors. Fed Chair Jerome Powell’s recent assurance that interest rate hikes are off the table has boosted investor confidence, while China’s measures to stabilize its property sector and the PBOC’s continued gold reserve accumulation support the bullish outlook. Additionally, geopolitical concerns, such as the alleged death of Iran’s President Raisi, have heightened safe-haven demand. These elements collectively underpin the current upward trend in gold prices.
CRUDE OIL
- WTI Oil Price Gains: West Texas Intermediate (WTI) oil prices are trading around $79.85 per barrel during the Asian session on Monday, continuing to gain ground after China's recent interest rate decision.
- PBOC Interest Rates: The People's Bank of China (PBOC) has kept the one-year and five-year Loan Prime Rates (LPR) steady at 3.45% and 3.95%, respectively, which has influenced the positive movement in crude oil prices.
- Fed’s Hawkish Remarks: Despite the gains, crude oil prices might face challenges following hawkish comments from Federal Reserve (Fed) officials last week, which could temper some of the optimism.
- Recent Price Increase: WTI oil prices saw a rise of approximately 2% last week, driven by optimism for increased demand from the United States, the world's largest oil consumer.
- China's Industrial Output: In China, industrial output increased by 6.7% year-on-year in April, signaling a robust recovery in its manufacturing sector and suggesting potential for stronger future oil demand.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: West Texas Intermediate (WTI) oil prices are seeing continued strength, trading around $79.85 per barrel during the Asian session on Monday. This positive trend follows the People's Bank of China’s decision to maintain steady interest rates, which has supported oil prices. However, hawkish remarks from Federal Reserve officials last week may pose some challenges to this momentum. Last week, WTI prices rose by about 2%, buoyed by optimism for increased demand from the United States. Additionally, a 6.7% year-on-year increase in China’s industrial output for April suggests a robust recovery in its manufacturing sector, pointing to potential for stronger future oil demand. These factors collectively shape the current outlook for crude oil prices.
DAX
- China's Economic Indicators: On Friday, economic indicators from China influenced the session, with an unexpected fall in retail sales contrasting with better-than-expected industrial production figures.
- Eurozone Inflation Data: Inflation data from the Eurozone provided little enthusiasm for investors. The annual inflation rate remained steady at 2.4%, with core inflation at 2.7% in April, unchanged from March.
- ECB Commentary: ECB Executive Board member Isabel Schnabel urged caution post-June, dampening investor hopes for multiple interest rate cuts after June.
- Monitoring ECB Commentary: On Monday, investors should closely watch ECB commentary, as expectations are set for a June rate cut, but there is caution about the post-June interest rate path.
- FOMC Member Speeches: Later on Monday, speeches from FOMC voting members Raphael Bostic, Christopher Waller, Michael Barr, and Philip Jefferson are expected and will be closely monitored by investors.
| SMA (20) | Rising |
|
|
| RSI (14) | Rising |
|
|
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: On Friday, the DAX was influenced by mixed economic indicators from China, with a decline in retail sales countered by robust industrial production figures. Eurozone inflation data remained unchanged, offering little encouragement to investors. ECB Executive Board member Isabel Schnabel's call for caution post-June tempered hopes for multiple interest rate cuts. Investors will be closely monitoring ECB commentary on Monday, as there is anticipation of a rate cut in June but uncertainty about future policy. Additionally, speeches from FOMC members later in the day will be pivotal in shaping market expectations.