English (India)
1
Jun

BoC Decision, ISM Manufacturing Index, Eurozone PMI

calendar 01/06/2022 - 07:29 UTC

The U.S. dollar started to appreciate on Tuesday after the recent losing streak for the greenback. Not only other major currencies were trading mostly lighter against the greenback but a reversing trend was also seen among dollar-emerging market currency pairs like the USD/MXN, USD/ZAR and USD/CNH. The USD/INR and USD/TRY meanwhile continued trading mostly side-ways as was the case also during the past week when the dollar was relatively weaker.

Major cryptocurrencies Bitcoin and Ethereum traded at their daily peak only moderately higher compared to Monday. By the end of the day, Bitcoin was unable to hold on to its $32k valuation, while Ethereum slid below the $2,000 level again.

Major stock market indices in the U.S. and Europe like the US 500 and Germany 40 traded lower on Tuesday. A slightly different trend could be observed among some Asian markets as the China A50 index traded with a strong upside on Tuesday, while the Japan 225 (Yen) reached a new five-weeks high by Wednesday morning.

The Bank of Canada (BoC) is set to announce its interest rate decision today in the afternoon. Another 50 bp rate hike is widely expected, while Bloomberg reports that another hike of the same amount would likely come also in July. Beyond these policy decision however there appears to be somewhat of an uncertainty how the central bank will act and whether it would hike rates above the “neutral range”.

From the U.S. data on construction spending as well as the ISM Manufacturing Index can be expected. Later during the Asian-Pacific trading session, Australian trade balance data for April will be published.

EUR/USD

With the dollar again strengthening, the EUR/USD rate dropped for the first time this week below the 1.07-threshold, though the rate stabilised above it in the afternoon. The trends among other major currencies were a bit mixed with the euro appreciating against the Japanese yen (JPY) and the New Zealand dollar (NZD), while other pairs like the EUR/CHF and EUR/CAD were trading lower.

Data released on Tuesday confirmed that the rate of consumer price index (CPI) inflation remains on the rise across many eurozone countries with the most recent data showing a 8.1% y/y increase in the eurozone (May) while the French and Italian rates of inflation were somewhat lower at 5.2% and 6.9% respectively.

German retail sales data for April was a significant disappointment with a monthly drop by 5.4% after an almost flat performance in the previous month.

On Wednesday manufacturing PMI numbers will be published for Germany, France and the eurozone and the eurozone and Italian unemployment rate statistic will also be presented.

EUR/USD

Gold

Gold prices traded for once clearly lower on Tuesday after remaining almost unchanged around the $1,850-mark during the three previous trading days. Fundamentally the recovery of the dollar as well as rising yields like the 10-year U.S. T-Note yield, which moved up as high as 2.87% could have been some factors contributing to this move.

However, the Gold (EUR) CFD also declined despite the falling EUR/USD rate and reached a new two months low.

While the gold price declined by a bit less than one per cent on Tuesday, silver prices dropped by 1.7% and palladium was down by almost 1.8%. At the same time platinum prices continued moving to the upside.

Gold

WTI Oil

After oil prices edged initially once again higher, with WTI crude oil briefly traded even at around $120 per barrel, oil prices dropped significantly in the late afternoon hours and ended the trading day for the first time in more than a week lower.

A significant development could be the so far unconfirmed rumours that OPEC could suspending Russia from its production agreement, which in turn could mean that other members would increase their respective production targets. The WSJ reported this potential development citing “OPEC delegates” as its source of information. A ministerial OPEC meeting is scheduled for Thursday.

Due to the Memorial Day Holiday in the U.S. on Monday the schedule for the publication of the weekly crude oil and other energy commodity stockpiles levels moves by one day as the American Petroleum Institute (API) releases its Weekly Statistical Bulletin on Wednesday, while the Energy Information Administration (EIA) publishes its numbers on Thursday.

WTI Oil

US 500

Though the US 500 and other major indices recovered a bit from the session’s low on Tuesday around the time the U.S. stock market opened on Tuesday, the index still closed at the end of the day lower for the first time in more than a week.

Amazon (+4.54%) was one of the best-performing components of the S&P 500 index on Tuesday with the stock price up for the fourth day in a row. Illumina (-7.12%) was meanwhile the worst-performing component of the index. One reason some analysts saw Illumina underperforming was that Ultima Genomics, a competitor in the genetic sequencing business secured a three digit million dollar amount of VC funding and is pushing for lower cost sequencing products.

On Wednesday quarterly results from Chewy, Pure Storage, GameStop and MongoDB can be expected. Then on Thursday Okta, Asana, CrowdStrike and Lululemon Athletica are publishing their respective results.

US 500

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