Corporate profit margins have been squeezed, with soaring inflation

US stock market: Shares slid worldwide yesterday as supply chain woes and surging costs hurt corporate earnings and manufacturing output slowed, while Treasury yields dipped as the weakness in equities revived a safe-haven bid for U.S. government debt. The stock market's today relief rally ended as investors worried about slowing economies. 

Corporate profit margins have been squeezed, with soaring inflation forcing consumers to cut discretionary spending. U.S. and eurozone business activity slowed in May. S&P Global attributed the decline in its U.S Composite PMI Output to elevated inflationary pressures. The economy likely will slump as the Federal Reserve hikes interest rates to stamp out inflation. It's really all about a hard landing and the Fed really being boxed in the corner with only demand-side tools to help. 

On Wall Street, the Nasdaq Composite dropped 2.35% and the S&P 500 lost 0.81% as investors turned to defensive positions. But shares pares losses late and the Dow Jones Industrial Average managed to close up 0.15%.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average added 0.15%. The best performers of the session on the Dow Jones Industrial Average were McDonald’s Corporation, which rose 2.74% or 6.52 points to trade at 244.52 at the close. Meanwhile, Verizon Communications Inc. added 2.03% or 1.01 points to end at 50.68 and International Business Machines was up 2.01% or 2.63 points to 133.80 in late trade. The worst performers of the session were Walt Disney Company, which fell 4.01% or 4.24 points to trade at 101.59 at the close. Boeing Co declined 3.76% or 4.67 points to end at 119.40 and Visa Inc. Class A was down 2.38% or 4.93 points to 202.63.

NASDAQ 100

The NASDAQ index declined 2.35%. The top performers on the NASDAQ Composite were Better Therapeutics Inc. which rose 69.77% to 2.19, Americas Car-Mart Inc. which was up 30.76% to settle at 99.98 and Quantum Computing Inc. which gained 25.48% to close at 1.97. The worst performers were Genocea Biosciences Inc. which was down 72.69% to 0.06 in late trade, Walkme Ltd which lost 34.43% to settle at 8.00 and TC BioPharm Holdings PLC which was down 34.15% to 0.78 at the close.

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Oil price - Crude Oil market, Brent Oil market

Oil prices steadied yesterday after choppy trade as tight supply worries offset concerns over a possible recession and China's COVID-19 curbs. Prices turned negative after U.S Energy Secretary Jennifer Granholm said President Joe Biden had not ruled out using export restrictions to ease soaring domestic fuel prices.

Initially, the assumption is that is going to reduce the prices of products in the United States. U.S West Texas Intermediate (WTI) crude fell 52 cents to settle at $109.77 a barrel. Oil has surged this year with Brent hitting $139 in March, the highest since 2008, after Russia's invasion of Ukraine exacerbated supply concerns. Prices were supported earlier in the session as the European Union moved closer to agreeing to a ban on Russian oil imports. U.S crude stocks rose by 567,000 barrels last week, according to market sources citing American Petroleum Institute figures released after the market settled.

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices dipped slightly today, receding from a two-week high hit in the previous session, as the dollar reclaimed some ground but uncertainty over the trajectory of inflation supported the safe-haven bullion's outlook. Spot gold eased 0.2% to $1,862.65 per ounce, after rising to its highest since May 9 of $1,869.49 yesterday. U.S gold futures dipped 0.2% to $1,861.50. 

Gold prices are set to snap a five-session winning streak. The dollar index firmed after hitting its lowest level in a month in the previous session, making greenback-priced bullion more expensive for buyers holding other currencies. Investors are struggling with how to assess the landing path of inflation now that peak inflation is behind us. 

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The question for the market is how long it will take to normalize, and that uncertainly is helping gold. As the Federal Reserve amps up its fight against 40-year-high inflation with what is expected to be a string of big interest-rate increases, a U.S central banker injected a note of caution, warning headlong rate hikes could create significant economic dislocation. 

While gold is often seen as a hedge against inflation, higher short-term U.S interest rates raise the opportunity cost of holding non-yielding bullion. Gold investors notice the softer change in the Fed language, and dips to $1,850.00 are met with solid support. Benchmark 10-year U.S. Treasury yields firmed after a drop in the previous session to a one-month low, pressuring demand for zero-yield bullion. 

Spot gold may stabilize around a support at $1,856 per ounce and retest a resistance at $1,867. Spot silver dipped 0.2% to $22.04 per ounce, and platinum eased 0.1% to $952.97, while palladium rose 0.4% to $2,014.07.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Corn futures dropped 1.8 percent to a six-week low yesterday, pressured by a government report that farmers have made good progress in their much-delayed planting tasks during the past week. This is likely to ease previous concerns that the delays in planting could lead to yield shortfalls or even a last-minute switch to soybeans. Soybean futures ended firmly after trading on both sides of unchanged, with the market underpinned by concerns that planting remained slow in northern production areas.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

China remains in talks to buy Russian oil for their strategic reserves

US stock market:  Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground. The S&P 500 and the NASDAQ logged their seventh straight week of losses, their longest losing streak since the end of the dot-com bubble in 2001. The Dow suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression. 

Worries about surging inflation and rising interest rates have pummeled the U.S. stock market this year, with danger signals from Walmart Inc. and other retailers this week adding to fears about the economy. The S&P 500 spent most of the session in negative territory and at one point was down just over 20% from its Jan. 3 record high close before ending down 18% from that level and flat for the day. Closing down 20% from that record level would confirm the S&P 500 has been in a bear market since reaching that January high, according to a common definition. The tech-heavy NASDAQ was last down about 27% from its record close in November 2021.

Economic Calendar

Dow Jones Industrial Average

The Dow Jones Industrial Average added 0.03%. The biggest gainers of the session on the Dow Jones Industrial Average were Cisco Systems Inc., which rose 2.92% or 1.22 points to trade at 42.94 at the close. Salesforce.com Inc. added 2.60% or 4.05 points to end at 159.65 and McDonald’s Corporation was up 2.14% or 4.91 points to 233.91 in late trade. The biggest losers included Boeing Co, which lost 5.07% or 6.44 points to trade at 120.70 in late trade. Caterpillar Inc. declined 4.32% or 8.94 points to end at 197.82 and 3M Company shed 2.13% or 3.13 points to 143.83.

NASDAQ 100

The NASDAQ index fell 0.30%. The top performers on the S&P 500 were VF Corporation which rose 6.07% to 47.32, American Tower Corp which was up 4.73% to settle at 244.28 and Eli Lilly and Company which gained 4.39% to close at 298.85. The worst performers were Ross Stores Inc. which was down 22.47% to 71.87 in late trade, Deere & Company which lost 14.07% to settle at 313.31 and Advance Auto Parts Inc. which was down 7.23% to 181.89 at the close.

Oil price - Crude Oil market, Brent Oil market

Crude oil futures were lower as media reports of China considering buying Russian oil for its strategic reserves eased concerns of a sharp cutback in Russian crude exports. China remains in talks to buy Russian oil for their strategic reserves, according to media reports, even as the US announced plans of potentially imposing secondary sanctions on Russia. Russian Deputy Prime Minister Alexander Novak had said on May 19 that the country would redirect European crude exports to other markets if the EU imposes an embargo. 

Still, a reduction in Chinese exports has been a key driver in tightening refined product supply across the globe. This reduction in Chinese exports is more likely structural, with China wanting to drive consolidation within the domestic refining industry and cut emissions, which suggests that the tightness in refined markets is unlikely to disappear anytime soon. Nonetheless, supply-side concerns arose as the US announced that considerations of imposing secondary sanctions on countries that purchase Russian oil were "certainly not off the table".

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices rose 2% on the week to give longs in the game their first weekly win in five. While they may have secured a break from their gloom which began in mid-April, bulls in bullion still appeared to be on a knife's edge given the dollar’s potential to reprise 20- year highs, analysts cautioned.  At Friday’s level of 103.23, the index wasn’t too far from the week-ago peak of 105.06, which marked a high since 2000. Another bugbear for gold longs: bond yields. 

The yield on the benchmark 10-year U.S. Treasury note has moved down to 2.79% from May peaks of 3.2% on expectations that forthcoming U.S. rates by the Federal Reserve in June and July will be capped at a half percentage point each round, instead of the initially speculated three-quarter point. Yet, with rate expectations often moving on a dime, yields could jump too. 

The second half of the week has been kind to gold as the trepidation in financial markets has shifted slightly from the pace of monetary tightening to recession risks. So rather than higher yields and a stronger dollar weighing on the yellow metal, we've seen investors pouring into safe havens which have lowered yields slightly and lifted gold. Front-month gold futures for June settled at $1,842.10 per ounce, up just 90 cents, or less than 0.1%, on the day. Week to date though, June gold was up almost $34 or 1.9%. It was a tumultuous week for futures of the yellow metal which plunged on Monday to $1,785, its lowest level since the Jan. 28 bottom of $1,779.70. At the end of the day, rate hikes should lower demand but so should a recession. If the latter continues to be viewed as a likely outcome of the former, gold could see its fortunes improve further.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Wheat fell for a third straight session on Friday, retreating further from a two-month high hit earlier this week as technical selling pressured the market. Corn also eased, as accelerated U.S planting and news that Argentina may expand an export volume cap weighed. Soybeans gained on strong export demand, amid tight supplies.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Investors priced in the chance of an aggressive near-term tightening path by the ECB

• The dollar slipped across the board yesterday, falling to a 2-week low
• The dollar logged sharp declines against the Japanese yen and the Swiss franc
• Britain's pound rose 1.2% against the dollar yesterday but remained close to the 2-year low

Forex market 

The dollar slipped across the board yesterday, falling to a 2-week low, extending its pullback from a two-decade high, as most major currencies battered by the greenback's advance this year drew buyers. With volatility on the rise in global financial markets, the dollar logged sharp declines against the Japanese yen and the Swiss franc, which tend to attract investors in times of market stress or risk. But the dollar also fared poorly against riskier currencies, including the Australian and the New Zealand dollar, as deep year-to-date losses for these currencies attracted some buyers. 

Investors have perhaps just had enough of the USD and are looking to diversify risk – especially as broader USD support from rising U.S yields appears to have maxed out. The U.S Dollar Currency Index, which tracks the greenback against six major currencies, was down 1.0% at 102.79, its lowest since May 5. That puts the index on pace for one of only six instances over the past five years when it logged a 1-day loss of 1% or more. 

Economic Calendar

The index hit a nearly two-decade high last week as a hawkish Federal Reserve and growing worries about the state of the global economy helped lift the U.S. currency. The index is up 7.5% for the year. Yesterday, the dollar slipped to a 3-week low against the yen and a 2-week low against the Swiss franc. 

Analysts, however, warned against reading too much into the dollar's retreat. The Swiss franc was supported against the dollar and the euro after Swiss National Bank president Thomas Jordan signaled on Wednesday the SNB was ready to act if inflation pressures continue. The euro rose to a more than 1-week high against the dollar, as investors priced in the chance of an aggressive near-term tightening path by the European Central Bank. 

Britain's pound rose 1.2% against the dollar yesterday but remained close to the 2-year low touched last week as soaring inflation combined with a murky growth outlook capped gains. The Canadian Dollar was trading 0.8% higher at 1.2790 to the greenback, or 78.19 U.S cents, after touching its strongest level since May 5 at 1.2784. On Wednesday, the currency fell 0.6% as Wall Street tumbled. 

More Shanghai residents were given the freedom to shop for groceries for the first time in nearly two months as authorities set out more plans for exiting the city-wide COVID-19 lockdown more fully. Investors have worried that lockdowns in China would slow global economic growth.

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Euro-EUR

The single currency rose to a more than 1-week high against the dollar in yesterday’s trading session, as investors priced in the chance of an aggressive near-term tightening path by the European Central Bank. The U.S dollar was broadly lower yesterday despite risk-off conditions in the cross-asset space. Overall, the EUR/USD traded with a low of 1.0469 and a high of 1.0563 before closing the day around 1.0497 in the New York session.

Japanese Yen-JPY

The Japanese Yen gained as the dollar slipped across the board yesterday, falling to a 2-week low, extending its pullback from a two-decade high, as most major currencies battered by the greenback's advance this year drew buyers. With volatility on the rise in global financial markets, the dollar logged sharp declines against the Japanese yen. Overall, the USD/JPY traded with a low of 128.32 and a high of 131.23 before closing the day around 130.82 in the U.S session.

British Pound-GBP

The British Pound climbed to a two-week high against a weaker dollar yesterday, winning a respite for now from the soaring inflation and murky growth outlook that has weighed on sentiment towards the British currency. Having fallen sharply on Wednesday, the pound bounced back, a move analysts attributed to a broadly-weak dollar. Overall, the GBP/USD traded with a low of 1.2409 and a high of 1.2568 before closing the day at 1.2455 in the New York session.

Canadian Dollar-CAD

The Canadian Dollar strengthened to its highest level in two weeks against its U.S counterpart yesterday as China eased restrictions to contain the spread of the coronavirus and the greenback broadly fell. Canada is a major producer of commodities, including oil, so the loonie is sensitive to the outlook for the global economy. Overall, USD/CAD traded with a low of 1.2788 and a high of 1.2877 before closing the day at 1.2805 in the New York session.

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Australian Dollar-AUD

The Australian Dollar lost ground yesterday as signs of an easing in Shanghai's lockdown helped steady sentiment after a rout on Wall Street. The Chinese financial hub will allow more businesses in zero-COVID areas to resume normal operations from the start of June, stirring hopes for a much-needed rebound in consumer demand. Overall, AUD/USD traded with a low of 0.6826 and a high of 0.6951 before closing the day at 0.6853 in the New York session.

Euro-Yen EUR/JPY

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 35 and lies below the neutral zone. In general, the pair has gained 1.25%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 33 reading and lies below the neutral zone. On the whole, the pair has gained 1.16%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 36 reading and lies below the neutral region. In general, the pair has gained 1.45%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 58 and lies above the neutral region. Overall, the pair has gained 0.12%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 50 and lies below the neutral region. In general, the pair has lost 0.42%.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

The global economy is in focus after weak economic data from China highlighted worries

• China's retail and factory activity fell sharply in April following extensive COVID-19 lockdowns
• ECB policymaker said the Euro's weakness could lurk the efforts to steer inflation towards its target
• Canadian factory sales fell 2.5% in March from March, Statistics Canada said

Forex market

U.S dollar index was lower yesterday after hitting a 20-year peak last week, with the global economy in focus after weak economic data from China highlighted worries about the prospects for a global slowdown. Creating a risk-off mood yesterday, China's retail and factory activity fell sharply in April as extensive COVID- 19 lockdowns confined workers and consumers to their homes. 

But Shanghai did set out plans for the return to a more normal life from June 1. Following the release of China's data trading was focused on macro-economic data yesterday. It's important to highlight that the risks are towards a stronger dollar and primarily, that's because if you look at the macroeconomic climate, the fundamentals don't look good. From a risk-off perspective that should still support the dollar against most currencies. But the greenback was consolidating after its recent strength and more range-bound trading sessions were possible. It makes sense for some period of consolidation before the next leg is higher. 

Economic Calendar

Trading in the dollar may be muted partly because a lot of bad news has already been priced in but also because investors are waiting for events such as the U.S. retail sales data release and a public appearance by Fed Chair Jerome Powell both scheduled for today. The euro was pulled from its earlier lows after European Central Bank policymaker Francois Villeroy de Galhau said the common currency's weakness could threaten the ECB's efforts to steer inflation towards its target. 

The Australian dollar, which is highly exposed to the Chinese economy, reversed course as the day wore on and was last up against the dollar after falling as much as 0.9%. The dollar index was last down 0.37% at 104.16, after briefly crossing the 105 level on Friday - its highest level since December 2002, after six successive weeks of gains.

Euro-EUR

The single currency has tumbled almost 9% since February and fell to its lowest levels since 2017 last week, a move that accelerated upward pressure on inflation in the euro area, which is already running at a record high 7.5%. The euro's weakness on currency markets could threaten the ECB's efforts to steer inflation towards its target. Overall, the EUR/USD traded with a low of 1.0469 and a high of 1.0563 before closing the day around 1.0497 in the New York session.

Japanese Yen-JPY

The Japanese Yen traded lower with the global economy in focus after weak economic data from China highlighted worries about the prospects for a global slowdown. Creating a risk-off mood yesterday, China's retail and factory activity fell sharply in April as extensive COVID-19 lockdowns confined workers and consumers to their homes. Overall, the USD/JPY traded with a low of 128.32 and a high of 131.23 before closing the day around 130.82 in the U.S session.

British Pound-GBP

The British Pound steadied yesterday after Bank of England Governor Andrew Bailey said the current inflation surge was the central bank's biggest challenge since it gained independence in 1997. In a choppy day, sterling had fallen both against the U.S. dollar and the euro as weak Chinese economic data added to pressure on risky currencies. Overall, the GBP/USD traded with a low of 1.2409 and a high of 1.2568 before closing the day at 1.2455 in the New York session.

Canadian Dollar-CAD 

The Canadian Dollar weakened against the greenback yesterday, and the yield on benchmark government debt slipped. Canadian factory sales fell 2.5% in March from March, Statistics Canada said. Analysts polled by Reuters had expected factory sales growth of 1.7%. Canadian wholesale trade grew by 0.3% in March. Overall, USD/CAD traded with a low of 1.2788 and a high of 1.2877 before closing the day at 1.2805 in the New York session.

Australian Dollar-AUD

The Australian Dollar suffered a fresh setback yesterday when stunningly weak economic data out of China stoked fears of a global recession, undermining risk assets and commodities. Chinese retail sales sank 11.1% in April from a year earlier, far beyond forecasts of a 6.1% drop and testimony to how tough coronavirus lockdowns have been there. Overall, AUD/USD traded with a low of 0.6826 and a high of 0.6951 before closing the day at 0.6853 in the New York session.

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Euro-Yen EUR/JPY

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 35 and lies below the neutral zone. In general, the pair has gained 1.25%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 33 reading and lies below the neutral zone. On the whole, the pair has gained 1.16%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 36 reading and lies below the neutral region. In general, the pair has gained 1.45%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 58 and lies above the neutral region. Overall, the pair has gained 0.12%.

Sterling-Swiss This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 50 and lies below the neutral region. In general, the pair has lost 0.42%.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Global shares rose on Friday as Wall Street rallied to end a volatile week of trading

US stock market: Global shares rose on Friday as Wall Street rallied to end a volatile week of trading, while oil jumped 4% on the back of record-high U.S gas prices. Global markets and U.S. stocks were down sharply most of the last week as investors grew anxious about the possibility of a recession. 

The S&P 500 index is off nearly 20% from its all-time high in January and was close to a bear market on Thursday. But investors' fears over whether U.S Federal Reserve Chair Jerome Powell can accomplish a "soft landing" - bringing inflation down while keeping the U.S economy growing - appeared to ease at least temporarily on Friday. Despite Friday's gains, the S&P 500 and the NASDAQ posted their sixth consecutive weekly loss, and the Dow notched its seventh consecutive weekly dip. 

Economic Calendar

Stocks were ready to rebound as some investors remain hopeful the Fed will deliver a soft landing, while others are ready to buy the dip. Oil prices jumped 4% as U.S gasoline prices jumped to a record high and China looked ready to ease pandemic restrictions.

Dow Jones Industrial Average

The Dow Jones Industrial Average added 1.47%. The best performers of the session on the Dow Jones Industrial Average were Nike Inc., which rose 4.74% or 5.11 points to trade at 113.01 at the close. Meanwhile, Salesforce.com Inc. added 4.05% or 6.49 points to end at 166.91 and American Express Company was up 3.58% or 5.48 points to 158.75 in late trade. The worst performers of the session were Johnson & Johnson, which fell 0.57% or 1.02 points to trade at 176.85 at the close. Amgen Inc. declined 0.54% or 1.32 points to end at 243.40 and Merck & Company Inc. was down 0.46% or 0.42 points to 90.41.

NASDAQ 100

The NASDAQ index gained 3.82%. The top performers on the NASDAQ Composite were ShiftPixy Inc. which rose 154.87% to 0.51, Polarityte Inc. which was up 44.51% to settle at 0.21 and Veru Inc. which gained 43.96% to close at 13.00. The worst performers were LiqTech International Inc. which was down 45.36% to 0.50 in late trade, Brilliant Earth Group Inc. which lost 33.63% to settle at 4.48 and Tenon Medical Inc. which was down 26.41% to 6.52 at the close.

Oil price - Crude Oil market, Brent Oil market

Oil prices rose about 4% on Friday as U.S gasoline prices jumped to a record high, China looked ready to ease pandemic restrictions and investors worried supplies will tighten if the European Union bans Russian oil. U.S West Texas Intermediate (WTI) crude rose $4.36, or 4.1%, to settle at $110.49. That was the highest close for WTI since March 25 and its third straight weekly rise. 

U.S gasoline futures soared to an all-time high after stockpiles fell last week for a sixth straight week. That boosted the gasoline crack spread - a measure of refining profit margins - to its highest since it hit a record in April 2020 when WTI finished in negative territory. Oil prices have been volatile, supported by worries a possible EU ban on Russian oil could tighten supplies but pressured by fears that a resurgent COVID-19 pandemic could cut global demand. In China, authorities pledged to support the economy and city officials said Shanghai would start to ease coronavirus traffic restrictions and open shops this month.

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices edged down in choppy trading today as strong dollar-hurt demand for the greenback-priced metal set it on course for a more than three-month trough hit in the previous session. However, a fall in benchmark U.S. 10-year Treasury yields limited losses in zero-yield gold, helping keep prices above the key psychological support level of around $1,800 per ounce. 

Spot gold was down 0.1% at $1,808.61 per ounce. U.S gold futures dipped 0.2% to $1,804.80. With $1,800 being such a big round number, it's natural for it to provide some level of support as some (traders) try to be brave and buy a dip, whilst others close out profitable shorts. Marking a fourth straight weekly decline, gold prices on Friday fell more than 1% to $1,798.86 per ounce, before closing at $1,811.15. But it's not looking great for gold bugs right now. Even if we do see a bounce from $1,800, the momentum clearly favors a further downside. 

Concerns around global growth helped the dollar start the week just off a 20-year high against its peers, making rival safe-haven gold less attractive for buyers holding other currencies. Inflation will need to move lower for "several months" before Federal Reserve officials can safely conclude it has peaked, Cleveland Fed President Loretta Mester said on Friday, adding she would be ready to consider faster rate hikes by September Fed meeting if the data does not show improvement.

 Although seen as an inflation hedge, gold is sensitive to rising U.S. short-term interest rates and bond yields, which raise the opportunity cost of holding bullion. Spot silver eased 0.2% to $21.03 per ounce, platinum gained 0.1% to $939.70, and palladium rose 0.6% to $1,955.59.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Wheat futures set contract highs on Thursday as the U.S. Department of Agriculture (USDA) slashed its production forecast for the variety that is grown in the U.S. Plains and used to make bread. USDA, in a monthly crop report, projected hard red winter wheat output at 590 million bushels, down from its April estimate of 749 million and below analysts’ expectations for 685 million. Hot weather has stressed the crop, with drought affecting about 69 percent of U.S. winter wheat areas as of May 3.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

High Inflation and the Fed’s rate hike path have fueled worries of a policy error

• The dollar showed little reaction on Friday to data showing U.S import prices
• The University of Michigan showed its reading of consumer sentiment for early May deteriorated
• Britain's pound edged up against the dollar on Friday, offering some respite from a week of selling

Forex market

The dollar slipped on Friday as a rally in equities contributed to a risk-on mood, but was still set for a sixth straight week of gains as investors remained concerned about slowing global growth and Federal Reserve policy tilting the United States into a recession. 

High inflation and the Fed's rate hike path have fueled worries of a policy error that could cause a recession or a stagflation scenario of slowing growth and high prices. Readings this week showed some signs that inflation was beginning to ebb, although at a slow pace. 

Economic Calendar

The dollar showed little reaction on Friday to data showing U.S. import prices were unexpectedly flat in April as a decline in petroleum costs offset gains in food and other products, a further sign that inflation has probably peaked. Other data from the University of Michigan showed its preliminary reading of consumer sentiment for early May deteriorated to its lowest level since August 2011 as concerns about inflation persisted. 

Even with the recent inflation readings, Cleveland Fed President Loretta Mester said it would need to move lower for "several months" before the Fed can safely conclude it has peaked, and she would be ready to consider faster rates hike by the September Fed meeting if the data do not show improvement. But the greenback weakened as equities rallied after a steep decline that recently put the S&P 500 on the cusp of confirming a bear market as investors looked for signs stocks had bottomed. 

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Investors have flocked to the safe haven on concerns about the Fed's ability to dampen inflation without causing a recession, along with worries about slowing growth arising from the Ukraine crisis and the economic effects of China's zero-COVID-19 policy amid rising infections. The single currency was on track for its fifth weekly drop in six and has been hurt by both fears resulting from Russia's invasion of Ukraine stymieing the economy and the dollar rally. 

The safe-haven yen has also begun to strengthen against the greenback and was on track for its first weekly gain versus the dollar after nine straight weeks of declines.

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Euro-EUR

The single currency was on track for its fifth weekly drop in six and has been hurt by both fears resulting from Russia's invasion of Ukraine stymieing the economy and the dollar rally. While the European Central Bank is widely anticipated to begin hiking rates in July, the central bank is expected to adopt a less aggressive pace than the Fed. Overall, the EUR/USD traded with a low of 1.0469 and a high of 1.0563 before closing the day around 1.0497 in the New York session.

Japanese Yen-JPY

The Japanese Yen has begun to strengthen against the greenback, and was on track for its first weekly gain versus the dollar after nine straight weeks of declines after the yen's slump to two-decade lows against the dollar has emerged as a source of concern for Japanese policymakers as it inflates already rising costs of fuel and raw material imports. Overall, the USD/JPY traded with a low of 128.32 and a high of 131.23 before closing the day around 130.82 in the U.S session.

British Pound-GBP

The British Pound edged up against the dollar on Friday, offering some respite from a week of selling that pushed the currency to two-year lows. Senior British politicians want to overhaul the agreement on trade between Northern Ireland and the United Kingdom that they signed up to in order to get Brexit done. Overall, the GBP/USD traded with a low of 1.2409 and a high of 1.2568 before closing the day at 1.2455 in the New York session.

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Canadian Dollar-CAD

The Canadian Dollar strengthened against its U.S counterpart on Friday as oil prices rose and Wall Street clawed back some recent losses, but the currency was on course to extend a string of weekly declines. The price of oil, one of Canada's major exports, rose as the prospect of a European Union ban on Russian oil offset worries about faltering global demand. Overall, USD/CAD traded with a low of 1.2788 and a high of 1.2877 before closing the day at 1.2805 in the New York session.

Australian Dollar-AUD

The Australian Dollar notched another week of heavy losses on Friday, as growth forecasts for China were downgraded and the yuan extended its decline. It was notable that the Aussie also slid against the yen, indicating the flight to safety was spreading wider. Adding to the pain was China's decision to limit unnecessary travel outside the country by its citizens. Overall, AUD/USD traded with a low of 0.6826 and a high of 0.6951 before closing the day at 0.6853 in the New York session.

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Euro-Yen EUR/JPY

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 35 and lies below the neutral zone. In general, the pair has gained 1.25%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 33 reading and lies below the neutral zone. On the whole, the pair has gained 1.16%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 36 reading and lies below the neutral region. In general, the pair has gained 1.45%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 58 and lies above the neutral region. Overall, the pair has gained 0.12%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 50 and lies below the neutral region. In general, the pair has lost 0.42%.

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