English (India)
10
May

German ZEW Index, Peloton, Coinbase and Occidental Petroleum Earnings

calendar 10/05/2022 - 07:36 UTC

While the dollar traded on average mostly stable against other majors there were once again movements in emerging markets. The USD/TRY pair failed to stabilised below the 15.0-threshold that was held for the past two months and was on Tuesday morning up by around 1.5% compared to last week. More importantly the currency pair left the rather restricted range it occupied since early March. Some other EM pairs like the USD/CNH and USD/INR also reached a new local high on Monday with he latter trading at the daily high just 0.13% below the previous all-time high that was reached during April 2020.

The sell-off in the crypto markets further intensified at a time when equities are also under pressure with Bitcoin falling for the first time since July of last year below $30k. Ethereum at levels below $2.2k meanwhile remains above the low seen during January of this year. Bitcoin is seen this time declining overall fairly in line with the trends in other cryptos as the BTC dominance remains just below 40%. Among the major cryptos Terra suffered some of the most significant losses as the coin lost on Monday more than half its value.

For Tuesday once again relatively few major fundamental data releases should be expected besides the Italian industrial output statistic and the German ZEW survey. Later during the Asian-Pacific trading session Australian consumer confidence data and the Chinese consumer price index (CPI) and producer price index (PPI) statistics can be expected.

EUR/USD

The recent market moves did not seem to help the dollar to continue appreciating against other majors after the recent rally. In fact the EUR/USD pair traded at times closer towards the 1.06-mark given the relative strength of the common European currency over the past trading days. Pairs like the EUR/CAD, EUR/CHF, EUR/AUD and EUR/NZD were all pointing sharply higher both on Friday and Monday.

In terms of fundamentals the French trade balance published on Monday morning indicated an increase in trade deficit in march, as it rose by more than 20% compared to the previous month to €12.37 bn.

On Tuesday industrial production statistics will be published in Italy, followed by the publication of the German ZEW survey on business expectations and current conditions.

EUR/USD

Gold

Amidst a wide-reaching sell-off in the markets gold was also under pressure, with prices falling towards lower $1,850-levels, while for now remaining above the low from last week. At this time the dollar traded relatively steady against other majors, while U.S. government bonds recovered with yields falling towards 3% (10-year U.S. T-Note benchmark) from the recent high of 3.15%. These factors in theory could have supported gold as an asset seen by some as a ‘safe haven’ at times of market turmoil, though this was clearly not the case during the most recent trading session as the price declined by around 1.3% from the closing level on Friday.

Silver prices were also under pressure, while platinum and especially palladium traded by Tuesday morning clearly in the green for this week.

Gold

WTI Oil

Oil and other energy commodity prices plummeted over the course of the first trading day of this week with a barrel of WTI crude oil at times traded just above $100 by Tuesday night. Overall WTI crude oil prices were down by more than seven per cent on Monday and Henry Hub natural gas futures dropped by more than 11%.

Multiple factors could have been impacting the markets including the prolonged lockdowns in regions of China, which are affecting already fragile supply chains. Tesla Shanghai for example significantly reduced its output to less than 200 cars manufactured per day according to a source cited by Reuters. The reason for this production slowdown was the inability to purchase essential components for its production.

Another development was the easing position of the EU to ban ships from carrying Russian crude oil over objection of Greece. Though it seems that the proposed ban on providing insurance for Russian vessels will actually be passed.

As usual the American Petroleum Institute (API) publishes on Tuesday its weekly statistical bulletin which among other data contains statistics on changes in crude oil, gasoline and distillate stockpiles. Then Wednesday the Energy Information Administration (EIA) follows up with its own set of statistics.

WTI Oil

US 500

The start of the week was once again bearish for stock markets with the US 500 index at times trading below the psychologically important 4,000-level. At the end of the day though index valuations managed to recover above this threshold.

Palantir (-21.52%) stocks tumbled towards a new all-time low after realising quarterly results which showed that the company remained unprofitable, incurring a loss of $0.02 (adjusted) per share and making a guidance for the current quarter expecting revenue to reach $470 million, which was below investors’ expectations.

After an already weak performance during the regular trading session, Novavax (-7.18%) declined in addition to those losses by more than a fifth of its value in the extended session and would open at a new low since August 2020 if such an after hours rate is confirmed during the regular trading session today. The company not only missed on earnings but with revenue at $704 million significantly lagged behind rather bullish investors’ expectations as it announced its first profitable quarter given its rollout of COVID-19 vaccine Nuvaxovid.

For Tuesday quarterly results from companies including Peloton, Playtika, Norwegian Cruise Line, Roblox, Electronic Arts, Coinbase, Wynn Resorts and Occidental Petroleum should be expected.

US 500

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.