EURUSD
- EUR/USD Recovery: EUR/USD shows a modest recovery above 1.0800 in early European trading on Thursday.
- US Dollar Strength: The US Dollar extended its weekly recovery on Wednesday, maintaining pressure on risk-sensitive assets.
- Federal Reserve Easing Expectations: Investors anticipate the Federal Reserve to start its easing cycle in September, while the ECB might cut rates as early as June.
- Fed Officials' Remarks: Federal Reserve officials Susan Collins and Loretta Mester expressed their expectation of a continued decline in inflation.
- ECB President's Confidence: ECB President Christine Lagarde expressed strong confidence in controlling Eurozone inflation, citing improvements in the energy crisis and supply chain issues.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD is in recovery mode above 1.0800 amid a stronger US Dollar and heightened market expectations for differing central bank policies. While investors anticipate a Federal Reserve easing cycle in September, the ECB might cut rates as early as June. Fed officials maintain an optimistic outlook on inflation decline, and ECB President Lagarde is confident in managing Eurozone inflation due to resolving supply chain bottlenecks and the energy crisis.
GBPUSD
- GBP/USD Recovery: GBP/USD is holding on to recovery gains above 1.2700 in European trading on Thursday.
- UK Inflation Data: The UK's Office for National Statistics reported that the Consumer Price Index (CPI) declined to 2.3% year-on-year in April from 3.2% in March.
- BoE Rate Cut Probability: The probability of a Bank of England (BoE) rate cut in June fell to 12% from 50% following the inflation data release, according to Reuters' BOEWATCH tool.
- Barclay's Announcement: Barclays removed its expectation of a BoE policy pivot in June.
- FOMC Minutes Insight: The FOMC Minutes from the May 1 meeting highlighted a debate on the current monetary policy's restrictiveness, supporting the continuation of the Fed’s tight stance.
| 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 is maintaining recovery gains above 1.2700 amidst a backdrop of declining UK inflation and reduced expectations for a Bank of England rate cut in June. The lower CPI has significantly shifted market sentiment, with Barclay's no longer expecting a policy pivot. Meanwhile, the FOMC Minutes underscored ongoing discussions about maintaining restrictive monetary policies, reinforcing the Fed’s current stance.
GOLD
- Gold Price Movement: Gold is trading near a five-day high below $2,370 in the European session on Thursday but remains on a three-day downtrend due to hawkish Fed Minutes.
- Fed May Policy Meeting Minutes: The Fed Minutes, released on Wednesday, indicated that various participants are open to further tightening if inflation risks materialize.
- Fed Policymaker Speeches: Recent speeches from several Fed policymakers have highlighted concerns about persistent inflation, suggesting a delay in rate cuts.
- Upcoming US PMI Data: Gold traders are anticipating the flash readings of the S&P Global US Manufacturing and Services PMIs, which could affirm the Fed’s hawkish shift and trigger a renewed advance in the US Dollar.
- Impact on Gold: The hawkish stance from the Fed and anticipation of strong PMI data have contributed to gold's recent downward trend, despite the current consolidation near recent highs.
Closing statement: Gold prices are consolidating below $2,370 in the European session on Thursday, following a three-day downtrend influenced by hawkish Fed Minutes and speeches from Fed policymakers highlighting persistent inflation concerns. Traders are now focused on upcoming US PMI data, which could further affirm the Fed’s hawkish outlook and impact the gold market.
CRUDE OIL
- WTI Crude Oil Decline: West Texas Intermediate (WTI) US Crude Oil declined for a third consecutive day on Wednesday, trading around $77.00 per barrel.
- EIA Report on US Crude Stocks: The Energy Information Administration (EIA) reported that US Crude Oil Stocks increased by 1.825 million barrels for the week ending May 17, significantly above the median market forecast of a 3.1-million-barrel decline.
- Russian Overproduction: Concerns about crude oil overproduction intensified as Russia announced accidental overproduction due to technical difficulties. Russia plans to present a plan to offset this additional production to OPEC+.
- OPEC+ Plans: Russia's overproduction issue will be addressed with OPEC+, the extended group of states aligned with the core OPEC members.
- Fed Meeting Minutes: The Federal Reserve’s latest Meeting Minutes indicated that the Federal Open Market Committee (FOMC) remains committed to waiting for firmer signs that US inflation will continue to ease towards the Fed’s 2% annual target.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI Crude Oil prices continued to decline, trading around $77.00 per barrel, as increased US Crude Oil Stocks and accidental overproduction by Russia raised concerns about oversupply. The EIA's report of a significant rise in US Crude Oil inventories and Russia's technical difficulties contributed to the market's bearish sentiment. Additionally, the Federal Reserve’s commitment to monitoring inflation closely, as indicated in the latest FOMC Meeting Minutes, also impacted market expectations.
DAX
- US Housing Sector Data: On Wednesday, US existing home sales drew investor interest, showing a decline of 1.9% in April following a 3.7% slide in March.
- FOMC Meeting Minutes: The Federal Reserve released the FOMC Meeting Minutes, revealing that Fed members remain willing to hike rates to achieve the 2% inflation target.
- NVIDIA Earnings: Earnings results from NVIDIA impressed the market. Despite a 0.49% decline during regular trading hours, NVDA surged 6.71% in after-hours trading, closing at $1,012.86.
- Upcoming German and Eurozone PMIs: Preliminary private sector PMI numbers for Germany and the Eurozone are due on Thursday. Better-than-expected numbers could challenge investor bets on post-June ECB rate hikes.
- ECB Monitoring: Investors should also watch for any ECB reaction to the PMI numbers, as this could influence market expectations regarding future rate hikes.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: On Wednesday, US housing data and the FOMC Meeting Minutes influenced market sentiment, with Fed members signalling a willingness to hike rates to control inflation. Meanwhile, NVIDIA's strong earnings provided a boost in after-hours trading. Looking ahead, preliminary PMI numbers for Germany and the Eurozone will be crucial, as investors seek cues from the ECB on future rate moves.