EURUSD
- EUR/USD Stability: The EUR/USD remains stable around 1.0850 during the Asian trading session.
- Technical Outlook: Technically, the pair remains above all its moving averages, with the 20 Simple Moving Average (SMA) approaching the flat 200 SMA from below.
- German PPI: Encouraging news from Europe as Germany's April Producer Price Index (PPI) contracted by 3.3% YoY, slightly more than the expected 3.2% slide.
- EU Current Account and Trade Balance: The EU's March Current Account posted a wider-than-anticipated seasonally adjusted surplus of €35.8 billion, and the Trade Balance rose to €17.3 billion.
- US Fed Speakers: The US macroeconomic calendar was quiet, with Federal Reserve speakers reiterating known messages. Focus shifts to Wednesday's Federal Open Market Committee (FOMC) Minutes.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The EUR/USD remains stable around 1.0850, supported by positive European data, including a wider EU Current Account surplus and a better-than-expected German PPI. Technical indicators suggest a bullish outlook as the pair stays above key moving averages. Investors will be looking towards Wednesday's FOMC Minutes for further direction.
GBPUSD
- GBP/USD Breakout: GBP/USD has broken out of its range play, challenging the 1.2760 level following the release of top-tier UK inflation data.
- Quiet Market: The absence of high-impact macroeconomic data releases kept financial markets quiet on Monday.
- Fed Comments: Remarks from Federal Reserve officials helped the US Dollar find support after the previous week's decline, limiting GBP/USD's upward movement.
- BoE Governor's Remarks: Bank of England (BoE) Governor Andrew Bailey indicated that the next move on rates would be a cut, expecting a fall in April's inflation data.
- UK CPI Data: The UK annual CPI rose 2.3% in April, surpassing market expectations of 2.1% growth. This data dampened expectations of a BoE rate cut in June and bolstered the Pound Sterling.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD broke out of its range to challenge 1.2760, driven by stronger-than-expected UK inflation data. While a quiet macroeconomic backdrop kept markets steady, supportive comments from Fed officials helped the US Dollar stabilize, constraining further gains for GBP/USD. BoE Governor Bailey's remarks and the higher-than-expected UK CPI data reinforced the Pound, pushing back against immediate rate cut expectations.
GOLD
- Gold Price Consolidation: Gold is trading within a tight range above $2,400 early Wednesday, consolidating after previous losses.
- Fed's Bostic on Inflation: On Tuesday, Atlanta Fed President Raphael Bostic stated he expects inflation to decline slowly and does not foresee a rate cut before the fourth quarter.
- Waller's Inflation Stance: Fed Governor Christopher Waller mentioned he needs to see several more months of positive inflation data before supporting any policy easing.
- Mester and Collins on Rates: Cleveland Fed President Mester emphasized maintaining restrictive rates due to the strong job market, while Boston President Susan Collins advocated for a patient approach from the Fed.
- Awaiting Fed Minutes: Gold traders are anticipating the Minutes from the US Federal Reserve's May policy meeting for new insights and trading impetus.
Closing statement: Gold prices are holding steady above $2,400, consolidating recent losses. Remarks from Fed officials, including Bostic, Waller, Mester, and Collins, highlighted a cautious approach to rate cuts, emphasizing the need for more positive inflation data and the strength of the job market. As traders await the Minutes from the Fed's May policy meeting, gold remains in a tight range, reflecting market uncertainty about the Fed's next moves.
CRUDE OIL
- Declining Oil Prices: Oil prices began to accelerate their decline on Tuesday, testing market sentiment and support for further price increases.
- FGE Chairman's Remarks: Fereidun Fesharaki, Chairman of FGE, stated at an event in Dubai that OPEC's spare capacity will not be needed in 2024 and warned of impending chaos in the LNG market.
- Geopolitical Tensions: In response to the helicopter crash that killed the Iranian President, several countries have issued warnings and remain on high alert for possible retaliations.
- Russian Oil Output: President Vladimir Putin reported that Russia’s oil output fell by 1.8% at the beginning of 2024 compared to the same period last year.
- US Oil Inventories Increase: The American Petroleum Institute (API) data indicated that US oil inventories rose by 2.48 million barrels for the week ending May 17.
| 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: Oil prices are experiencing accelerated declines, challenging market optimism for further gains. Key industry insights from FGE's Fesharaki and geopolitical tensions following the Iranian President's death are adding to market uncertainty. Russia’s reported drop in oil output and a rise in US oil inventories further contribute to the complex landscape. These factors collectively impact market sentiment and could influence the performance of DAX-listed companies with exposure to the energy sector.
DAX
- German Producer Prices: German producer prices declined by 3.3% year-on-year in April, following a 2.9% drop in March, indicating waning demand.
- Eurozone Labor Costs: Labor costs in the Eurozone increased by 4.9% year-on-year in Q1 2024, up from 3.4% in Q4 2023, which could influence ECB's rate decisions.
- ECB President's Remarks: ECB President Christine Lagarde expressed confidence that inflation is under control, suggesting a more dovish stance on future rate cuts despite rising labor costs.
- Upcoming ECB Focus: The ECB will be a focal point on Wednesday, with President Lagarde scheduled to speak, potentially impacting market sentiment.
- Lack of Immediate Data: There are no significant statistics for Germany or the Eurozone before the preliminary private sector PMIs on Thursday.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: German producer prices continue to signal weak demand, while rising Eurozone labour costs may prompt caution regarding rate cuts. ECB President Lagarde's optimistic view on inflation supports a dovish rate path. Markets will closely watch her speech on Wednesday, with no major economic data expected until Thursday's preliminary PMIs.