EURUSD
- EUR/USD edged higher to 1.0731, staying near a two-month low, despite hints from European Central Bank officials about potential interest rate hikes to address persistently high inflation.
- Bundesbank President Joachim Nagel emphasized the Eurosystem's resolute actions to combat inflation, stating that the ECB Governing Council will continue on a path of monetary tightening.
- The U.S. dollar slightly declined in early European trading, but is on track for its third consecutive weekly gain as expectations for U.S. interest rate hikes increase.
- Market focus is on the release of the personal consumption expenditure index, a key indicator of inflation, which the Federal Reserve will closely monitor leading up to its June policy meeting.
- The interplay between EUR/USD, inflation data, and central bank actions will continue to shape market sentiment and currency dynamics.
| SMA (20) | Falling |  |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling | |
Closing statement:Market participants are closely watching the developments in EUR/USD and inflation indicators, as central bank policies and economic data play significant roles in shaping currency movements.
GBPUSD
- GBP/USD rose 0.2% to 1.2344 following better-than-expected retail sales in the UK for April, showing a 0.5% increase from March and an improvement from the previous month's 1.2% drop.
- With the UK experiencing high inflation, on par with Italy as the highest in the G7, and consumer spending displaying resilience, the Bank of England is likely to raise interest rates again next month.
- The DXY, which tracks the dollar against a basket of six other currencies, declined 0.2% to 104.000, slightly below Thursday's two-month high of 104.31.
- Despite minor losses on Friday, the US dollar is still on track for a weekly gain, marking its third consecutive weekly increase of just under 1%, as traders position themselves for the possibility of prolonged higher US interest rates.
- The interplay between GBP/USD, UK economic indicators, and US monetary policy expectations will continue to influence currency dynamics.
| SMA (20) | Slightly Falling | |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling | |
Closing statement:Market participants are closely monitoring GBP/USD as retail sales data and inflation levels in the UK impact expectations for future Bank of England interest rate decisions, while the US dollar's performance reflects traders' positioning regarding US interest rates and the potential for a sustained upward trajectory.
GOLD
- Gold prices remained near two-month lows on Friday, experiencing significant weekly losses as investor sentiment shifted towards the US dollar due to concerns about raising the US debt ceiling and expectations of higher interest rates.
- The decline in gold prices represents a notable reversal from the record highs reached earlier in May, as reduced fears of an immediate banking crisis diminished its appeal as a safe haven asset.
- With inflation persisting at elevated levels, there is growing anticipation that the Federal Reserve will raise interest rates again in June, leading futures traders to be almost evenly divided between expecting a rate hike or a pause.
- The US dollar has also benefited this week from its safe haven status, driven by the lack of progress in reaching an agreement to raise the US government's $31.4 trillion debt ceiling, with the early-June deadline approaching.
- While there are indications of progress in reaching a deal, as reported by Reuters late on Thursday, any agreement would still need to pass through both the Republican-controlled House of Representatives and the Democratic-controlled Senate.
Closing statement: The trajectory of gold prices continues to be influenced by concerns surrounding the US debt ceiling and expectations of interest rate hikes, while the US dollar remains supported by its safe haven appeal. Market participants are closely monitoring the ongoing negotiations and their potential impact on gold prices and the overall market sentiment.
CRUDE OIL
- Crude oil prices declined in Asian trade on Friday, extending the significant drop witnessed in the prior session, as traders awaited further clarity on OPEC's future production cuts and remained concerned about the U.S. debt ceiling.
- Thursday saw crude markets experience substantial losses, with prices falling by nearly 3% and erasing most of the gains achieved earlier in the week, following statements from Russian Deputy Prime Minister Alexander Novak indicating that no new measures are expected from OPEC and its allies (OPEC+) during their June 4 meeting.
- These comments came shortly after the Saudi Energy Minister warned against shorting oil prices and highlighted the potential consequences for speculators. The conflicting signals prompted bearish sentiment and led to a pullback in oil prices from three-week highs, further exacerbated by concerns over Germany's economic recession based on recent data.
- Despite indications of tightening U.S. supply and improving fuel demand in the largest oil consumer globally, crude prices reversed a significant portion of their gains this week due to fears of slowing economic growth.
- Overall, the crude oil market remains influenced by uncertainty surrounding OPEC's upcoming meeting, concerns over the U.S. debt ceiling, and the impact of economic indicators on global oil demand.
| SMA (20) | Slightly Falling | |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Neutral |
Closing statement: Traders are closely monitoring developments in the OPEC meeting and the resolution of the U.S. debt ceiling issue, as these factors are likely to significantly influence crude oil prices in the near term. Additionally, ongoing economic concerns and indicators will continue to shape market sentiment and the outlook for oil demand.
DAX
- European stock markets displayed mixed performance on Friday, with better-than-expected British retail sales providing some support, while concerns over the U.S. debt ceiling deal continued to linger.
- The DAX index in Germany experienced a further decline of 0.25%, the FTSE 100 in the U.K. remained mostly flat, and the CAC 40 in France recorded a modest rise of 0.14%.
- The release of data on Thursday revealing a surprise 0.3% contraction in German gross domestic product (GDP) for the first quarter of 2023, marking the second consecutive quarterly decline, raised concerns about a recession in the largest economy in Europe.
- European central bankers are maintaining their aggressive monetary tightening measures, signalling no intentions of slowing down their efforts.
- As the quarterly earnings season draws to a close, no significant earnings reports are scheduled for Friday.
| SMA (20) | Neutral | ||
| RSI (14) | Falling | |
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| MACD (12, 26, 9) | Slightly Falling | |
Closing statement:With mixed market performance and ongoing concerns over economic indicators and the U.S. debt ceiling, investors are closely monitoring developments and seeking further clarity on the direction of European stock markets.