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While the U.S. dollar strongly appreciated against other major currencies like the Japanese yen (JPY) and the pound sterling (GBP) on Wednesday, the results among emerging countries’ currencies were a bit mixed with the USD/ZAR pair trading even lower, while the USD/INR and USD/TRY traded still mostly within the range seen even during the previous week.
After a mixed performance for crypto markets on Tuesday, major cryptos like Bitcoin and Ethereum tumbled on Wednesday erasing practically all the gains from Monday when both were trading with a significantly bullish sentiment. While Cardano remains on the weekly basis still clearly in the green, Solana dropped significantly with double-digit percentage losses on Wednesday bringing the altcoin’s value to a new low since mid-May.
Major stock market indices in Europe and the U.S. like the Europe 50 and US 30 traded lower for the second day in a row, while the Japan 225 (JPY) once again moved to the upside.
On Thursday some key job market statistics from the U.S. should be expected as usual at the beginning of the month. First the Challenger job-cut report and the ADP Employment Reports will be released as well as data on the unit labour costs and nonfarm productivity. Then the weekly jobless claims statistic will be released, followed by factory orders data for April.
The EUR/USD rate fell on Wednesday towards a new one week low, given the resurgence of the dollar strength. Among the major currencies, the common European currency managed to appreciate only against the weakened Japanese yen (JPY).
Eurozone economic indicators were showing mixed results on Wednesday with German retail sales significantly lagging behind expectations given a drop by 5.4% in May, while the German and eurozone manufacturing PMI was moderately better than anticipated at 54.8 and 54.6 respectively, meaning that purchase managers in Germany had a slightly better outlook compared to the last survey when the reading was at 54.6. The unemployment rate remained unchanged at 6.8% in the eurozone.
On Thursday eurozone producer price index (PPI) data for April will be published.
Significant volatility could be observed in the CAD market around the time the Bank of Canada (BoC) announced its interest rate decision. The rate hike by 50 basis points has been widely anticipated and thus did not surprise the markets in the least. The statement of the central bank that it would be “prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target” however was taken as a hawkish note and Bloomberg reports that markets are not only pricing in another 50 bp hike in July but also possibly another one in September or possibly a rate hike of more than 50 bp at once.
The consumer price index (CPI) for Canada indicated a rate of price inflation amounting to 6.8% on an annualised basis for April, while was in line with global trends.
Oil prices fell fairly significantly for the second day in a row with the price move in WTI crude oil from Tuesday until the end of day on Wednesday amounting to almost -4.5%. Prices were also mostly unmoved around the time the American Petroleum Institute (API) published its Weekly Statistical Bulletin with data indicating a moderate draw in crude oil inventories of almost 1.2 million barrels. At the same time distillate inventories also declined by more than 0.8 million barrels, while a small build in gasoline was recorded. The Energy Information Administration (EIA) publishes its weekly data on changes in stockpile levels this week on Thursday.
While there were earlier reports in the WSJ that OPEC might consider coordinating its oil production activities without Russia, adding hope that other OPEC members could in turn increase production, newer reports cast doubt that this would actually take place. Ahead of the ministerial OPEC meeting on Thursday, the Saudi Foreign minister met his Russian counterpart in Riyadh with both praising the cooperation between their countries according to a report by Reuters.
Major stock market indices like the US Tech 100 and the US 500 fell for the second day in a row, putting them for now on track to end the week in the red. Only fewer sectors ended the day with in upside like energy stocks (US Energy ETF +1.73%) such as ConocoPhillips (+2.82%) and Exxon Mobil (+1.97%).
Salesforce (+9.03%) was by a wide margin the best-performing component of the S&P 500 index on Wednesday following the company’s quarterly results. Both earnings and revenue at $0.98 adjusted per share and $7.41 billion respectively were moderately better than anticipate though the guidance was a bit lighter than anticipated for the second quarter, while profitability for the whole fiscal year 2023 was raising its earnings outlook to a $4.74 to $4.76 per share (adjusted).
On Thursday Okta, Asana, CrowdStrike and Lululemon Athletica are publishing their respective earnings.
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