Worries over a further acceleration in global inflation depressed investors

• The U.S. dollar strengthened across the board yesterday as Treasury yields climbed
• Fed Governor Christopher Waller said the Fed should be prepared to raise interest rates
• Euro remained weak as data showed eurozone inflation hit a record high in May

Forex market 

U.S dollar strengthened across the board yesterday as Treasury yields climbed and worries over a further acceleration in global inflation depressed investors' risk appetite. The dollar was supported by demand for safe-havens. 

U.S stocks fell yesterday as soaring oil prices and hawkish comments from a U.S Federal Reserve official spooked investors. U.S Treasury yields climbed on Tuesday, a day after Fed Governor Christopher Waller said the Fed should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed. 

The U.S Dollar Currency Index, which tracks the greenback against six other major currencies, was up 0.3% at 101.76, on pace for its best one-day gain in nearly two weeks. The dollar index, up about 6.4% for the year, is down 1.4% for May, on pace for its worst monthly loss in a year. President Joe Biden told Fed Chair Jerome Powell on Tuesday that he will give the central bank the space and independence to address inflation as it sees fit, according to a top aide. 

Economic Calendar

Yesterday's bounce in the U.S dollar suggests better support for the dollar index around its 50-day moving average, which the index has been testing over the past couple of sessions. For now, the euro remained weak as data yesterday showed eurozone inflation hit a record high in May, adding pressure on the European Central Bank as it fends off a recession and looks to curb high prices with gradual interest rate increases in coming months.

Inflation in the 19 countries sharing the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7% as price growth continued to broaden, indicating that it is no longer just energy pulling up the headline figure.

Euro-EUR

The single currency gave back some of its recent gains yesterday but was still set for its best month in a year as markets reposition in anticipation of interest rate increases in Europe and the possibility of a slower pace of U.S rate hikes. German inflation rose to its highest level in nearly half a century in May on the back of soaring energy and food prices. 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 fell to a two-week low versus the U.S Dollar following higher Treasury yields as global inflation worries flared anew. The dollar index, which measures the currency against six major peers, including Japan's, rose 0.19% to 101.94, extending a 0.38% rally yesterday when data showed euro-area consumer inflation soaring to a record. 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 fell against the Dollar but remained on track for its first monthly gain of 2022 even as Britain's murky growth outlook continued to weigh on sentiment. Despite the weakness, the sterling remains well off its mid-May lows when it touched its lowest level since March 2020. Sterling regained ground on the back of a strong labor market and CPI data. 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 nearly six weeks against the greenback, boosted by recent strength in oil prices and domestic data that showed the economy had momentum heading into the second quarter. Canada's economy was not as robust as expected in the first quarter, growing at an annualized rate of 3.1%. 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 had a muted reaction to China’s PMI numbers after domestic building approvals data surprised to the downside. Chinese manufacturing PMI for May printed at 49.6 against 49.0 anticipated and the non-manufacturing came in at 47.8 instead of the 45.5 forecasts. Australian building approvals sunk -by 2.4% month-on-month in April. 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.

Inflation data from Germany and Spain yesterday showed price rises accelerated in May

• The U.S dollar resumed its slide as risk appetite across markets tentatively strengthened
• Trade was light as U.S stock and bond markets were closed for the Memorial Day public holiday
• Data on Friday showed that U.S consumer spending rose more than expected

Forex market 

The U.S dollar resumed its slide yesterday as risk appetite across markets tentatively strengthened, supported by encouraging economic data and bets that the Federal Reserve will tighten policy at a slower pace. The dollar index - which tracks the greenback against six major rivals - is on track for its first monthly drop in five, as the safe-haven currency loses steam after a breakneck start to the year. 

The dollar index is on track for a more than 1.5% drop in May - although it remains up about 6% on the year. Trade was light as U.S stock and bond markets close for the Memorial Day public holiday. Data on Friday showed that U.S consumer spending rose more than expected in April as households boosted purchases of goods and services, and the rise in inflation slowed. Analysts said the encouraging data, coupled with bets on a more cautious tightening path by the Fed, was weakening the dollar. 

World share markets rose on Monday as easing COVID-19 restrictions and new stimulus in China helped sustain last week's rebound. How the US consumer plays out from here and from a global perspective how the Chinese economy performs will be crucial determinants for broader investor risk appetite. A slew of further economic data is due this week which could give clues on the outlook for global growth, including U.S. jobs numbers and Chinese Purchasing Managers' Index figures. 

Economic Calendar

Inflation data from Germany and Spain showed price rises accelerated in May, pushed up by soaring energy prices, ahead of eurozone inflation figures today. The inflation numbers helped keep a lid on the euro's gains. The safe-haven yen fell back 0.5% and the Sterling edged up 0.1%.

Euro-EUR

The single currency traded higher as the U.S dollar resumed its slide yesterday as risk appetite across markets tentatively strengthened, supported by encouraging economic data and bets that the Federal Reserve will tighten policy at a slower pace. Trade was light as U.S stock markets were closed for the Memorial Day public holiday. 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.

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Japanese Yen-JPY

The Japanese Yen steadied as the bank of Japan Governor Haruhiko Kuroda pledged to patiently stick to powerful monetary easing to help the economy recover from the COVID-19-induced doldrums, shrugging off any suggestion about a departure from its stimulus policy. Kuroda told parliament the yen was regaining stability after its recent rapid weakening. 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 higher against a faltering U.S dollar yesterday and was set for its first monthly gain in five as the risk-sensitive currency benefited from improving sentiment. As markets have readjusted their rate hike expectations from the Federal Reserve lower, the dollar index has weakened over 3.5% from its mid-May peak. 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 rose to its highest level in more than five weeks against the greenback in yesterday’s session, as data showed Canada's current account surplus turning positive and ahead of an expected interest rate hike this week by the Bank of Canada. Canada's current account surplus was C$5.0 billion in the first quarter. 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 extended a two-week rally yesterday as investors cut back on long positions in the U.S dollar ahead of a packed schedule of major local and offshore economic data. The rally owes much to a pullback in the U.S dollar and speculation the Federal Reserve will go slower once it has hiked by 100 basis points over the next two months. 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.

Australian business investment fell unexpectedly in the first quarter

• Minutes from the Federal Reserve's May meeting confirmed the potential for a pause in rate hikes
• Sterling was flat against the dollar and rose against the euro yesterday
• The Canadian dollar edged higher yesterday, recovering from its lowest level in nearly a week

Forex market 

The dollar hovered near a one-month low today as minutes from the Federal Reserve's May meeting confirmed the potential for a pause in rate hikes after likely further increases in June and July. The dollar index - which measures the currency against six major peers - edged 0.1% higher to 102.15 as a decline in Asian equities fostered demand for safe havens like the greenback. 

However, the index has mostly been consolidating around 102 after a short-lived bounce to 102.45 immediately following Wednesday's release of the minutes. Analysts said there was nothing to suggest a further ramp-up of the Federal Open Market Committee's already hawkish stance. Wall Street rallied overnight on that outlook, while long-term Treasury yields held steady. Atlanta Fed President Raphael Bostic had already suggested earlier this week that a pause might be the best course of action in September to monitor the effects on the economy following two more 50-basis-point hikes in June and July. 

Economic Calendar

The dollar index reached a nearly two-decade peak above 105 mid-month. Still, signs that aggressive Fed action may already be slowing economic growth have prompted traders to scale back tightening bets, with Treasury yields also dropping from multiyear highs. The 10-year Treasury yield tracked sideways in Tokyo at 2.75%, continuing its consolidation around that level this week. A soft DXY backdrop is forming although it's still too early to call a long-term DXY peak. The dollar added 0.08% to 127.425 yen, while the euro was about flat at $1.0679. 

Sterling slipped 0.17% to $1.25615. The risk-sensitive Aussie sank 0.25% to $0.70695. The New Zealand dollar dropped 0.31% to $0.6458, after shedding most of the gains following Wednesday's hawkish Reserve Bank of New Zealand meeting outcome, which had lifted it to a three-week top of $0.6514. The dollar's safe-haven appeal should keep it bid going forward.

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Euro-EUR

The single currency gained as the dollar hovered near a one-month low today as minutes from the Federal Reserve's May meeting confirmed the potential for a pause in rate hikes after likely further increases in June and July. There was nothing to suggest a further ramp up of the Federal Open Market Committee's already hawkish stance. 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 steadied as the dollar index which measures the currency against six major peers edged 0.1% higher to 102.15 as a decline in Asian equities fostered demand for safe havens like the greenback. However, the index has mostly been consolidating around 102 after a short-lived bounce following a release of the minutes. 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 was flat against the dollar and rose against the euro, having briefly lost ground against both currencies following the publication of a report detailing COVID lockdown-breaching parties at the office of Britain's prime minister. A failure of leadership was to blame for a culture that led to the alcohol-fueled gatherings being held. 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 edged higher against its U.S counterpart yesterday, recovering from its lowest level in nearly a week, as equity markets rallied after the U.S Federal Reserve released minutes of its latest policy meeting. U.S crude oil futures settled 0.5% higher at $110.33 a barrel, buoyed by tight supplies. 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 traded lower as Australian business investment fell unexpectedly in the first quarter as floods and bottlenecks hit building work, though firms sharply lifted plans for spending in the year ahead in a boost to the economic outlook. Data from the Australian Bureau of Statistics out on Thursday showed private capital spending dipped a real 0.9% in the March quarter. 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.

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.

Alchemy Markets Review

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%.

Exante Review

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