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U.S. Home Sales, Leading Indicators, Japan CPI

calendar 19/05/2022 - 07:47 UTC

The U.S. dollar traded overall stronger against many major and emerging market currencies with some exceptions like the USD/JPY and USD/CHF pairs which both moved lower despite a strengthened greenback. The USD/TRY pair meanwhile edged once again higher, reaching at levels beyond 16.00 a new year-to-date high.

Cryptos came under pressure with Bitcoin falling below $29k, while Ethereum maintained a potential support level just above the $1.9k mark. More significant losses could be observed among some altcoins on Wednesday like Cardano (-12.5%) and Avalanche (-14.0%).

With the equity markets again turning bearish even after a strong start this week, some indices like the US 500 might close once again in the red at the end of this week. The index closed so far over the course of the past six week every time lower. Markets like the US Tech 100 or the Germany 40 continued facing pressure to the downside, falling by around one per cent again by Thursday morning.

On Thursday in the U.S. as usual weekly jobless claims data will be published. Other releases will be the Philadelphia Fed General Business Condition index, the leading indicators existing home sales and e-commerce retail sales data. Later in the Asian-Pacific trading session New Zealand publishes its trade balance statistic for April and Japan its consumer price index (CPI).


The strength of the dollar pressured the EUR/USD pair again below the 1.05-threshold, while the euro itself had a mixed results against other majors with the common European currency even appreciating against the AUD, NZD and CAD on Wednesday.

Eurozone CPI statistics indicated a steady rate of inflation at 7.4% (y/y) against expectations that the rate could increase again.

U.S. data on building permits and housing starts for April showed a moderate slowdown as permits declined from 1.873 million to 1.819 million and housing starts were down from 1.793 million to 1.724 million.



Gold continues to trade fairly steadily a bit above the $1,800-mark despite all the recent movement in the FX and other markets. Silver prices meanwhile were down for the first time in four trading days after earlier the metal outperformed gold and some other precious metals like platinum. Platinum dropped by more than 2.4%, trading at the lowest level in more than two weeks. Palladium also came under pressure but given the strong performance on Monday and Tuesday is still in the green on a weekly basis.



With the oil prices declining significantly over the course of the trading session on Wednesday at the current levels oil might end the week in the red after prices were on the rise for the past three consecutive weeks. WTI crude oil dropped by more than 7%, while Brent was trading only 3.3% lower. Gasoline prices meanwhile declined by 6.2%.

Even the significant drop ion gasoline and crude oil inventories amounting to 4.8 million barrels and 3.4 million barrels respectively was not enough to stabilise prices in the afternoon as they started rapidly declining starting around 1 PM GMT.

While some lockdown measures were said to be loosened in Shanghai, the cities’ population is still facing significant restrictions and with testing in progress in other areas like Beijing and Tianjin, given the authorities insistence on a zero-covid policy there are still fears that some lockdowns might continue or be extended to those parts where new cases among the non-isolated are detected.


US 500

While initially markets were trading almost unchanged on Wednesday, in the late morning hours stock market valuations began with their gradual decline which at the end of the day for the US 500 index amounted to a loss of almost 4.6%.

One of the drivers in this bear market were the disastrous quarterly results from the retailer Target (-24.94%) after a day earlier Wal-Mart also disappointed with its results. Wal-Mart shares are down by 17% this week. While target reported a growth in terms of revenue, the adjusted earnings at $2.19 were well below market expectations. The continued supply chain issues in the market and increased costs on items like fuel were some factors affecting the bottom line.

Following these results other retailers like Dollar Tree and Costco (-12.51%) also were among the worst five performing stocks included in the S&P 500 index.

The underperformance of Cisco Systems in the extended session when the share price fell by more than 12% following the already weak performance during the regular session might have put additional pressure on the overall market sentiment.. While adjusted earnings per share at $0.87 were fairly on target, investors were disappointed by the company failing to meet their revenue expectations at $12.84 billion and indicated that sales would decline in the current quarter. As many others, the company mentioned that they also have to navigate around the currently wide-reaching supply chain issues.

On Wednesday quarterly results from Applied Materials and Palo Alto Networks can be expected.

US 500

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