03 May 2022 – Daily FX Update

Overview

Fed starts a two-day meeting

Eurozone Unemployment improves

Gold is at the lowest since February

FOREX

U.S. Dollar Index

The dollar was down on Tuesday morning in Asia, with the Fed widely expected to further tighten its monetary policy as it begins its two-day meeting. The U.S. Dollar Index was down 0.29% to 103.23, while it held just below a 20-year high against a basket of currencies on Monday.

The Fed will hand down its policy decision on Wednesday and is expected to hike rates by 50 basis points, the biggest hike since 2000. The central bank is also expected to announce plans to trim its $9 trillion balance sheet. However, some investors are even holding out for the possibility of a 75-basis point hike, or a faster pace of balance sheet reduction than currently expected.

Euro

The European Union is preparing the latest sanctions on Russian oil sales in response to Russia’s invasion of Ukraine on Feb. 24. Germany, Russia’s biggest energy customer, has changed its stance that could deprive Russia of a large revenue stream within days.

The Eurozone Unemployment Rate dropped to 6.8% against 6.7% expected and 6.9% reported in February, the latest data published by the Eurostat showed on Tuesday. The Producer Price Index (PPI) in the bloc rose to 5.3% MoM in March vs. 5% expected and 1.1% previous. On an annualized basis, the PPI surged 36.8% in March, beating expectations of a 36.3% increase and 31.5% last.

Meanwhile, EURUSD is losing the recovery momentum on the mixed Eurozone data releases. The spot pair was trading at 1.0499, down 0.05% so far.

Chinese Yuan

In Asia Pacific, ongoing concerns about China’s latest COVID-19 outbreak and its impact on the country’s economic impact helped cap the dollar’s losses. The city of Shanghai reported 58 new cases outside areas under strict lockdown on Monday, while the capital city of Beijing resumed its mass testing program. The USDCNY pair was steady at 6.6083 with Chinese markets also closed for a holiday.

Japanese Yen

The Japanese Yen gained ground against the greenback as the USDJPY pair inched down 0.05% to 130.07, with Japanese markets closed for a holiday.

Meanwhile, the Japanese yen continued to remain near 20-year lows reached against the dollar on Thursday, after the Bank of Japan strengthened its commitment to keep interest rates low and pledged to buy unlimited amounts of bonds daily to defend its yield target.

Indices

U.S. Indices

U.S. stock futures rose early Tuesday morning after the major averages staged a big reversal to start the month. Dow Jones Industrial Average futures rose 80 points, or 0.24%. S&P 500 and Nasdaq 100 futures were also up by 0.28% and 0.34%, respectively.

On Monday, the major averages posted a wild up-and-down session amid the Nasdaq Composite rising 1.63% in a late-day comeback, despite falling as much as 1.07% earlier. The S&P 500 rose 0.57% after hitting a new 2022 low earlier in the session.

The benchmark 10-year Treasury yield also climbed to a new milestone on Monday. The bond yield hit 3.01% during the session, its highest point since December 2018.

European Indices

European stock markets opened higher Tuesday, starting the new month on a positive note as investors await more corporate earnings and the prospect of key central banks tightening monetary policy. A lot of attention will be on central banks this week as a number hold policy-setting meetings that could determine market sentiment for weeks to come.

The DAX futures contract traded 0.6% higher, CAC 40 futures climbed 0.6%, and the FTSE 100 futures contract rose 0.6%. The Bank of England will also hand down its policy decision on Thursday and is expected to raise interest rates to their highest level in 13 years. Meanwhile, German unemployment data for April are due later in the session along with the March Eurozone PPI release.

Metals

Gold prices dropped on Tuesday to their lowest since February this year, as the dollar and an imminent interest rate hike by the U.S. Federal Reserve dampened bullion’s appeal as an inflation hedge.

Spot gold was down 0.3% at $1,858.10 per ounce. Bullion fell more than 2% on Monday to its lowest since Feb. 16, as the dollar and yields strengthened on increased prospects for faster rate hikes by the U.S. central bank. U.S. gold futures were also down 0.3% at $1,857.20.

The U.S. central bank’s Federal Open Market Committee will begin its meeting on interest rates later in the day and is expected to hike borrowing costs by half-a-percentage point when it announces its decision on Wednesday.

Spot silver dipped 0.5% to $22.52 per ounce, platinum eased 0.1% to $934.94, and palladium advanced 0.8% to $2,234.12.

Crude Oil

Oil prices slipped on Tuesday in a second day of thin trading in Asia, pulled in opposite directions by China’s COVID-19 lockdowns, which could weigh on fuel demand, and prospects for a supply hit from a possible European oil embargo on Russia.

Brent crude futures fell 0.2% to $107.35 a barrel, tapping out early gains in the day in trading thinned by holidays in China, Japan and parts of Southeast Asia. U.S. West Texas Intermediate (WTI) crude futures similarly dropped 0.2% to $104.94 a barrel, after hitting an intraday high of $105.80. Both benchmark contracts rose more than 0.4% on Monday.

Market participants expect the European Commission to finalise the sixth package of European sanctions against Russia, which might include a ban on buying Russian oil.

Traders will be closely watching U.S. inventory data. The American Petroleum Institute industry group will report stockpiles for the week ended April 29 on Tuesday, followed by government data from the Energy Information Administration on Wednesday.

shmarkets

Share
Published by
shmarkets

Recent Posts

11月期货展期通知

尊敬的客户: 您好,我司期货产品十一月份的展期将至,因新旧期货合约之间存在价格差异,为规避潜在的交易风险,建议客户妥善控制仓位。 期货合约的展期时间如下: 产品代号 产品名称 展期日 FRA40ft France 40 Index Future法国CAC40指数(期货) 2024-11-14 CL-OIL Crude Oil…

3 days ago

11月闭市通知

尊敬的客户: 您好,受即将到来11月份假期影响,STARTRADER的交易时间将有所调整。 请参考下表了解涉及调整的产品情况: 日期 2024年11月4日 2024年11月11日 2024年11月15日 2024年11月20日 假期 万圣节 卡塔赫纳独立日 共和国日 黑人意识日 BVSPX巴西股指(圣保罗指数) 正常…

2 weeks ago

即将到来的美国夏令时调整交易时间

尊敬的客户: 请注意,由于2024年11月3日实施的美国夏令时变化,以下产品的交易时间将会调整。 产品代号 交易时间 (GMT+2) Cocoa美国可可豆现货 星期一~星期四: 11:45-20:30星期五: 11:45-20:27 Coffee阿拉比卡咖啡豆现货 星期一~星期四: 11:15-20:30星期五: 11:15-20:27 Sugar11号精糖现货 星期一~星期四:…

2 weeks ago

11月闭市通知

尊敬的客户: 您好,受即将到来11月份假期影响,STARTRADER的交易时间将有所调整。 请参考下表了解涉及调整的产品情况: 日期 2024年11月1日 假期 万圣节 USDCLP美元兑智利披索 闭市 USDINR美元兑印度卢比 闭市 *所有日期均为GMT+3(MT4/MT5服务器时间) 请注意:在市场流动性下降情况下,点差可能会较正常平均水平显著扩大,我们建议客户在交易时要妥善管理仓位、确保账户资金充足,并且进行谨慎交易。 如果您有任何疑问或需要任何帮助,请随时发送电子邮件至 info@startrader.com 或透过线上聊天 https://www.startrader.com/ 联系我们。 感谢您的支持!STARTRADER团队

2 weeks ago

(更新版)10月期货展期通知

尊敬的客户: 您好,我司期货产品十月份的展期将至,因新旧期货合约之间存在价格差异,为规避潜在的交易风险,建议客户妥善控制仓位。 期货合约的展期时间如下: 产品代号 产品名称 展期日 VIX Volatility恐慌指数期货 2024-10-11 FRA40ft France 40 Index Future法国CAC40指数(期货) 2024-10-16…

3 weeks ago

新美国存托凭证产品上架

尊敬的用户: 我们很高兴地宣布,STARTRADER 将于2024年10月28日推出十六款新产品,旨在为我们的客户提供更加多样化的投资组合。这些新产品将仅在我们的 MT5 服务器上提供。 请参阅下表了解新产品的详细信息: 产品代码 说明 类型 合约规模 最小手数 最大手数 3日库存费 交易时间(GMT+3) VFS…

3 weeks ago