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Friday, 5 May 2023
Japanese Yen Toys with the Market as Ranges Break then Retreat. Where to for USD/JPY?
Gold Futures Settle Higher On Safe-haven Appeal
Gold prices climbed higher on Thursday as the dollar struggled to find its footing amid speculation the Federal Reserve will soon pause its policy tightening.
The Fed, which raised interest rates by 25 basis points on Wednesday, signaled a potential pause in its tightening cycle depending on incoming data on inflation and other factors.
The dollar index, which climbed to 101.64 from a low of 101.03 it touched in the Asian session, pared gains subsequently and was at 101.25 a little while ago, down 0.1% from the previous close.
Gold futures for June ended higher by $18.70 or about 0.9% at $2,055.70 an ounce.
Silver futures for July ended up $0.546 at $26.227 an ounce, while Copper futures for July settled at $3.8630, gaining $0.0180.
Concerns over a potential recession in the U.S., banking woes and debt ceiling impasse also pushed up the demand for the safe-haven yellow metal.
"The force is strong for gold bulls given all the banking turmoil and rising risks that the US will have a tough recession," says Edward Moya, Chief Market Analyst at OANDA. "The real economy is going to get knocked down a lot given what we are seeing with financials and that will keep demand elevated for safe-havens."
"Gold is going to shine given this macro backdrop and possibly eye a move above the $2100 if the de-risking mood on Wall Street remains over the next few sessions," Moya adds.
The European Central Bank today hiked interest rates by 25 basis points, and ECB President Christine Lagarde's hawkish remarks suggested the central bank is likely to raise interest rates further.
In U.S. economic news, data released by the Labor Department showed initial jobless claims climbed to 242,000 in the week ended April 29th, an increase of 13,000 from the previous week's revised level of 229,000.
Economists had expected jobless claims to rise to 240,000 from the 230,000 originally reported for the previous week.
A separate report released by the Commerce Department said the U.S. trade deficit shrank to $64.2 billion in March from a revised $70.6 billion in February.
The Labor Department also released another report showing U.S. labor productivity tumbled by much more than expected in the first quarter of 2023, while unit labor costs spiked more than expected.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2211576/
Gold Prices Rise as Markets Focus on Fed Rate Cut Bets and Regional Bank Woes
Thursday, 4 May 2023
Australia Trade Data Due On Thursday
Australia will on Thursday release March figures for imports, exports and trade balance, highlighting a modest day for Asia-Pacific economic activity.
In February, imports were down 9.0 percent on month and exports fell 3.0 percent on month for a trade surplus of A$13.870 billion.
New Zealand will provide March numbers for building consents, with forecasts suggesting a decline of 0.3 percent following the 9.0 percent drop in February.
China will see April results for the manufacturing PMI from Caixin, with forecasts calling for a score of 50.3 - up from 50.0 in March.
Hong Kong will see March numbers for retail sales and April results for its private sector PMI from S&P Global. Sales are expected to jump 19.6 percent on year after surging 31.3 percent in February. The PMI score is expected to improve to 53.7 from 53.5 in March.
Finally, the markets in Japan (Greenery Day), Malaysia (Wesak Day) and Thailand (Coronation Day) are closed on Thursday.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2211479/
Gold Clocks New Peaks Post Fed Hike as Oil Collapse Rattles Markets. Higher XAU/USD?
Oil Futures Settle Sharply Lower On Growth Worries
Crude oil prices fell sharply on Wednesday amid concerns about economic growth, outlook for energy demand, and on data showing an increase in gasoline inventories.
The Federal Reserve's decision to raise interest rate by 25 basis points weighed as well on oil prices.
West Texas Intermediate Crude oil futures for June ended down $3.06 or about 4.3% at $68.60 a barrel, the lowest settlement since March 24.
Brent crude futures ended lower by $2.99 or about 4% at $72.33 a barrel, the lowest close since December 2021.
Data released by Energy Information Administration (EIA) showed crude inventories dropped by 1.3 million barrels last week, as against forecasts for a 1.1 million drop.
The data showed gasoline inventories rose by 1.7 million barrels last week, larger than an expected drop of 1.2 million barrels.
Data released by the American Petroleum Institute on Tuesday showed crude oil inventories in the U.S. falling by 3.94 million barrels in the week ended April 28, higher than market expectations of a 1 million decline. Inventories had fallen by 6.1 million barrels in the previous week.
Following the Fed's rate hike move, the European Central Bank is also likely to raise interest rate by 25 basis points.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2211478/
Treasuries Extend Yesterday's Rally As Fed Hints At Potential Pause
After moving sharply higher over the course of the previous session, treasuries saw further upside during trading on Wednesday.
Bond prices pulled back off their best levels going into the close but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.6 basis points to 3.403 percent.
With the decrease on the day, the ten-year yield added to the 13.5 basis point slump seen on Tuesday.
The continued strength among treasuries came as the Federal Reserve announced its widely expected decision to raise interest rates by another quarter but signaled a potential pause in rate hikes.
The Fed decided to raise the target range for the federal funds rate by 25 basis points to 5 to 5.25 percent, making the tenth straight rate hike.
The unanimous decision to continue raising rates came as the Fed noted inflation remains elevated while also observing that job gains have been robust in recent months and the unemployment rate has remained low.
Notably, however, the Fed omitted a sentence included in the March statement that said the central bank "anticipates that some additional policy firming may be appropriate" to return inflation to 2 percent over time.
The Fed also tweaked language regarding the outlook for monetary policy, saying "the extent to which additional policy firming may be appropriate" rather than "the extent of future increases in the target range."
In his post-meeting press conference, Fed Chair Jerome Powell said the central bank would take a "data-dependent approach" to future monetary policy decisions and stressed decision on a pause was not made at the meeting.
The next monetary policy meeting is scheduled for June 13-14, with CME Group's FedWatch Tool currently indicating an 83.6 percent chance the Fed will leave rates unchanged.
"The Fed signaled that there will likely be a pause in June, but it came with a caveat that the FOMC remains highly attentive to inflation and is data dependent," said Ryan Sweet, Chief US Economist at Oxford Economics.
"In other words, if there is any upside surprise to inflation, the central bank won't hesitate to resume hiking interest rates because they're determined to break inflation's back," he added. "As such, there is a risk that the pause is temporary."
Trading on Thursday may continue to be impacted by reaction to the Fed announcement, while reports on weekly jobless claims, the U.S. trade deficit and labor productivity are also likely to attract some attention.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2211477/