Important calendar events
The dollar gained strength last week, with the dollar index rising above 104.2. US Treasury yields soared, with the US 10-year bond yield rising to 3.83%.
The ongoing debate around the US debt ceiling is causing economic uncertainty, affecting dollar prices. The debate over the US debt ceiling is expected to monopolize markets’ attention this coming week. US Treasury Secretary Janet Yellen has warned that the office would not meet all US government obligations by June 1. This would force the country to default on its debt, leading to a major recession. Yellen was able to extend the deadline to June 5th before the US runs out of resources to satisfy its obligations.
US President Joe Biden and Republican House Speaker Kevin McCarthy are negotiating a deal to raise the government's debt limit, preventing the US from defaulting. US President Biden has stated that the talks are productive, and, that he is confident that the two parties will agree on the budget. Talks between the Democrats and the Republicans pushed into the weekend and are expected to continue over the US Memorial Day on Monday. The two parties are reportedly closing in on a deal but have yet to reach a final agreement, as the clock runs down.
The dollar soared last week on upbeat US economic data. GDP data released last week showed that the US economy expanded by 1.3% in the first year of 2023 against predictions of a 1.1% growth. The preliminary GDP Price Index, which is an important inflation gauge, also exceeded expectations, rising by 4.2% in Q1 of 2023 versus the 4.0% anticipated. US Unemployment claims dropped to 229K last week, against more pessimistic estimates of 249K.
Flash Services PMI data rose to 55.1 in May, exceeding expectations of a 52.6 print and rising above April’s 53.6 print. A value above 50 indicates that the services sector is expanding at an increasing pace. The Manufacturing sector, on the other hand, is starting to shrink. US Flash Manufacturing PMI dropped into contractionary territory with a 48.5 print in May from 50.2 in April, versus the 50.0 expected.
US Federal Reserve Chair Jerome Powell has indicated that the US Central Bank may pivot towards a more dovish direction. The Federal Reserve raised interest rates by 25 basis points at its latest monetary policy meeting, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%.
Markets anticipate a pause in rate hikes in June. The US Central Bank has signaled that its hawkish policy is coming to an end, as prolonged tightening is putting the economy at risk and the recent turmoil in the banking sector has increased recession concerns. Many analysts predict that there is a high probability of rate cuts starting in November, depending on economic conditions and inflationary pressures.
The minutes of the latest Fed meeting were released last week, increasing the odds of a pivot in the Fed’s policy direction. According to the FOMC minutes, several Fed members advocated for a pause in rate hikes during the Fed’s last meeting in May.
US Headline inflation dropped to 4.9% year-on-year in April, decelerating from a 5.0% print in March. US Inflation cooled more than expected in April, as markets were anticipating a 5.0% print. Core CPI, however, which excludes food and energy, proved to be persistent, remaining at 5.5% year-on-year.
US Core PCE Price Index, however, rose 0.4% every month in April versus a forecast of 0.3%. Core PCE, which is the Fed’s primary inflation gauge, went up by 4.7% year-on-year in April, having gained by 4.6% in March. Inflationary pressures in the US remain sticky, suggesting that the Fed may have to persist on its policy of monetary tightening to restore price stability.
Advance GDP data for the first quarter of the year showed that the US economy expanded by 1.1% against expectations of 2% and a 2.6% growth in Q4 of 2022. Advance GDP Price Index on the other hand rose by 4.0% in Q1 of 2023, versus 3.7% expected. This index measures inflation and indicates that price pressures remain high.
EUR/USD extended losses last week, dropping to the 1.071 level. If the currency pair goes up, it may encounter resistance near 1.090. If the EUR/USD pair declines, it may find support at 1.070.
The Euro plummeted last week, on signs that Germany, the Eurozone’s leading economy, is entering recession. Final GDP data showed that the German economy contracted by 0.3% in the first quarter of the year, formally entering recessionary territory. The German economy was already in stagnation during the final quarter of 2022 and analysts were predicting a GDP print of zero again this quarter. German GfK Consumer Climate data indicated that the economic climate in Germany is bleak. The index dropped to -24.2 in May against expectations of a -23.6 print with a negative value denoting consumer pessimism in the economy.
Economic activity data released last for the Eurozone were disappointing, putting pressure on the Euro. Flash Eurozone Services PMI Activity dropped to 55.9 in May from 56.2 in April. May’s print, however, exceeded the expected 55.5 value and remained firmly above the threshold of 50 which denotes industry expansion. The Manufacturing sector, however, continues to shrink, at an increasing pace. Flash Eurozone Manufacturing PMI dropped to 44.6 in May from 45.8 in April, registering a 36-month low.
The ECB raised interest rates by 25 bp at its latest monetary policy meeting, bringing its main refinancing rate to 3.75%. The ECB had raised interest rates by 50 bp in previous meetings and is slowing down the pace of rate hikes.
The ECB has left the door open for further rate hikes as inflationary pressures in the EU remain high. The ECB, however, is expected to reassess its policy direction ahead of its next meeting in June. EU policymakers must take a lot of variables into account, including the effect of economic tightening on the now fragile banking sector.
ECB President Christine Lagarde has stated that the ECB is approaching a key juncture and that further action is necessary to bring inflation down to the bank’s 2% goal. Lagarde’s comments point to further rate hikes up ahead, while the US Fed has signaled a pause in rate hikes.
Price pressures in the Eurozone remain high. Headline inflation rose to 7.0% year-on-year in April from 6.9% in March, in line with expectations. Core CPI, which excludes food and energy, dropped slightly to 5.6% on an annual basis in April from 5.7% in March. Eurozone inflation is not showing signs of cooling despite the ECB’s aggressive tightening.
GDP Flash data for the first quarter of the year showed that the Eurozone economy expanded by 0.1%, registering a small improvement against the 0 print for the final quarter of 2022.
The Sterling plummeted last week, and the GBP/USD pair dropped to the 1.235 level. If the GBP/USD rate goes up, it may encounter resistance near 1.254, while support may be found near 1.220.
Headline inflation in the UK dropped below 10% on an annual basis in April for the first time since August 2022. CPI data released last week revealed that inflation in the UK is starting to cool, although not as rapidly as anticipated. Headline inflation rose 8.7% year-on-year in April from 10.1% in March, surpassing expectations of 8.2%. Core CPI, which excludes food and energy, however, rose to 6.8% on an annual basis in April from 6.2% in March.
UK business activity data came in below expectations, weighing the Sterling down. Flash Services PMI data dropped to 55.1 in May from 55.9 in April, against expectations of a 55.5 print, showing that growth slowed more than expected in the Services sector. The services index, however, remained firmly above the 50 threshold that denotes industry expansion. The British Manufacturing sector continued to shrink, however. Flash Manufacturing PMI data dropped to 46.9 in May, from 47.8 in April, versus 47.9 predicted.
BOE governor Andrew Bailey has been particularly hawkish in his statements in the past few days. Bailey has repeatedly emphasized the need to tackle sticky inflation in the UK. Even though inflation in the UK is showing signs of cooling, it is likely not sufficient to encourage the BOE to halt its hawkish monetary policy. On Wednesday, Bailey hailed the announcement of easing inflation, stating that projections show that the government will meet its inflation target this year. Bailey, however, warned that inflation in the UK is persistent and will require further tightening to bring inflation to target.
The BOE raised interest rates by 25 basis points at its latest meeting in May, bringing the bank rate to 4.5%. Market odds are in favor of more BOE rate hikes up ahead and many analysts predict no rate cuts at all within the year. After Bailey’s speech, however, the odds of another rate hike at June’s policy meeting went down. The BOE has been following an aggressively hawkish monetary policy, aiming to bring inflation down.
The British economy contracted by 0.3% in April, after registering stagnation in March. The International Monetary Fund, however, upgraded the UK’s growth prospects last week, stating that a recession was now unlikely. The IMF had previously forecasted that the British economy will contract by 0.6% this year.
The UK’s weak economic outlook limits policymakers’ ability to increase interest rates sufficiently to rein in inflation. The British economy is struggling, and policymakers will have to assess how much tightening it can withstand to bring inflation down.
The Yen continued to decline last week, and USD/JPY rose to multi-month highs, rising to 140.7. If the USD/JPY pair declines, it may find support near 137.4. If the pair climbs, it may find resistance at 142.5.
BOJ Core CPI rose to 3.0% year-on-year in April from 2.9% in March, according to data released last week. April’s print exceeded expectations of a 2.8% growth, indicating that price pressures in Japan continue to rise. Tokyo Core CPI for April was also hotter than expected, at 3.5% annually, against expectations of a 3.2% print. Inflation in Japan remains steadily above the BOJ’s 2% target, putting pressure on businesses and households. Increased price pressures and wages, raise concerns of a wage-price spiral and may force the BOJ to pivot towards a more hawkish policy.
Preliminary GDP data for the first quarter of the year were optimistic, showing that the Japanese economy expanded by 0.4% in Q1 of 2023, after reaching stagnation during the last quarter of 2022. The GDP data exceeded expectations of a 0.2% growth in the first quarter of the year, alleviating recession concerns for Japan. The final GDP Price Index printed showed a 2.0% annual expansion, versus 1.2% the previous quarter. Japan’s economic recovery increases the odds of a hawkish pivot in BOJ’s monetary policy.
The BOJ decided to continue its dovish monetary policy at the bank’s latest meeting in April. This was the first meeting with the newly-appointed BOJ Governor Kazuo Ueda at the helm. Japanese policymakers maintained ultra-low interest rates at the BOJ policy meeting, keeping the central bank’s refinancing rate at -0.10%.
The BOJ modified its forward guidance slightly at its latest meeting by removing a pledge to keep interest rates at current or lower levels. In addition, the BOJ announced a review of the impact of its easing policies with a planned time frame of around one to one-and-a-half years. This signals a policy change down the road, although it is clear that the BOJ does not have any immediate plans to pivot to a more hawkish policy.
Gold prices plummeted last week, sinking to $1,940 per ounce. If gold prices increase, resistance may be encountered near $1,985 per ounce, while if gold prices decline, support may be found near $1,900 per ounce.
Gold prices have been predominantly directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar gained strength last week, with the dollar index rising above 104.2. US Treasury yields soared, with the US 10-year bond yield rising to 3.83%.
The ongoing debate around the US debt ceiling is causing economic uncertainty, affecting gold prices. Fears of a US debt default promoted a risk-aversion sentiment in the past couple of weeks, boosting the safe-haven gold, although the dollar has outperformed gold as a safe-haven asset. US Treasury Secretary Janet Yellen has warned that the office would not meet all US government obligations by June 1. Yellen extended the deadline to June 5th, emphasizing that after this date the country would run out of resources and would be forced to default on its debt. Republican House Speaker McCarthy and US President Biden are negotiating a deal for increasing the debt limit. The two leaders have yet to reach an agreement, but negotiations continue as the clock runs down.
The Federal Reserve signaled a pause in rate hikes last week, causing the dollar to plummet and boosting gold prices. US Federal Reserve Chair Jerome Powell has indicated that the US Central Bank may pivot towards a more dovish direction.
The Federal Reserve raised interest rates by 25 basis points at its monetary policy meeting last week, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%. Many analysts predict that there is a high probability of rate cuts starting in November. Expectations of a shift to a more dovish policy provide support for gold prices.
The minutes of the latest Fed meeting were released last week, increasing the odds of a pivot in the Fed’s policy direction. According to the FOMC minutes, several Fed members advocated for a pause in rate hikes during the Fed’s last meeting in May.
Oil prices were volatile last week, with WTI prices ranging from $70.6 to $74.7 per barrel. If the WTI price declines, it may encounter support near $73.9 per barrel, while resistance may be found near $74.6 per barrel.
Oil prices are supported by limited supply, as OPEC+ producers recently decided to reduce output by 1.1 million barrels per day, to offset the drop in oil prices from the global banking crisis. Last week, conflicting statements from OPEC members caused volatility in oil prices ahead of the OPEC+ meeting on June 4th. Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman warned traders against shorting oil futures, fuelling speculation on further production cuts. However, Russian Deputy Prime Minister Alexander Novak downplayed the prospect of further OPEC+ production cuts at next week’s meeting. Iranian President Ebrahim Raisi attempted to quell rumors of further production cuts, stating that he hopes oil producers can calm down the market and calling for unity amongst OPEC members.
U.S. crude oil inventories declined by 12.5 million barrels, against expectations of an 800K barrels raise, boosting oil prices. According to a report by the Energy Information Administration on Wednesday, the decline was mainly due to a drop in imports.
Oil prices are also boosted by diminishing rate hike expectations. US Federal Reserve Chair Jerome Powell indicated that the US Central Bank may pivot towards a more dovish direction. The Federal Reserve raised interest rates by 25 basis points at its latest monetary policy meeting, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%. The US Central Bank has signaled that its hawkish policy is coming to an end, providing support for oil prices. As major central banks are winding down their hiking cycles, the oil demand outlook rises. The minutes of the latest Fed meeting were released last week, increasing the odds of a pivot in the Fed’s policy direction. According to the FOMC minutes, several Fed members advocated for a pause in rate hikes during the Fed’s last meeting in May.
Oil prices have been under pressure, as mounting economic risks reduce the oil demand outlook. Recession concerns run high and aggressive rate hikes stifle economic activity, putting a lid on oil prices. The potential of a banking sector meltdown has also reduced the oil demand outlook.
The looming US debt crisis is affecting, not only the dollar, but most assets and commodities, including oil. US Treasury Secretary Janet Yellen has warned that the office would not meet all US government obligations by June 1. Yellen was able to extend this deadline to June 5th, buying the government some time to negotiate a deal that would increase the country’s debt ceiling. Republican House Speaker McCarthy and US President Biden are negotiating a deal on the debt limit. The ongoing debate around the US debt ceiling is causing economic uncertainty, pushing oil prices down.
Crypto markets were volatile last week, plummeting mid-week but rallying over the weekend on renewed risk sentiment. Risk sentiment fluctuates, causing volatility in risk assets, such as cryptocurrencies. The ongoing debate around the US debt ceiling is causing economic uncertainty, inducing volatility in cryptocurrency prices. Increasing US debt fears have been driving risk sentiment down, putting pressure on cryptocurrencies. Reports, however, that a resolution to the US debt situation is close at hand renewed risk sentiment over the weekend, boosting cryptocurrency prices.
US Treasury Secretary Janet Yellen has warned that the office would not meet all US government obligations by June 1. Yellen has extended the US debt deadline to June 5th, emphasizing that after this date the country would be forced to default on its debt. House Speaker McCarthy and President Biden are negotiating an increase in the US debt ceiling. The two leaders have yet to reach an agreement, but negotiations continue as the clock runs down.
Bitcoin price rallied towards the end of last week, climbing to the $28,000 level. If the BTC price declines, support can be found near $26,000, while resistance may be encountered near $29,000. Reports that Tether, the largest asset-backed stablecoin, would invest up to 15% of its net profit into Bitcoin every month boosted Bitcoin.
Ethereum price also recovered, climbing to the $1,900 level over the weekend. If Ethereum's price declines, it may encounter support near $1,740, while if it increases, resistance may be encountered at $2,000.
Signs that major central banks are starting to wind down their hiking cycles provide support for risk assets. The Federal Reserve raised interest rates by 25 basis points at its latest monetary policy meeting, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%. The US Central Bank has signaled that its hawkish policy is coming to an end, boosting risk assets.
The minutes of the latest Fed meeting were released last week, increasing the odds of a pivot in the Fed’s policy direction. According to the FOMC minutes, several Fed members advocated for a pause in rate hikes during the Fed’s last meeting in May.
BTC/USD 1h Chart
ETH/USD 1h Chart
The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.
Written by:
Myrsini Giannouli
لوجودنا كمزود سيولة
سبريد يبدأ ممن 0.0 نقطة
أموال العملاء
خدمة دعم العملاء
قم بتعبئة نموذج التسجيل
وانقر على
’إنشاء حساب‘.
بمجرد تسجيل الدخول إلى منطقة العميل الآمنة، يرجى المتابعة من خلال رفع وثائق إثبات الهوية ومحل الإقامة.
بمجرد الموافقة على حسابك، يمكنك إيداع الأموال وبدء التداول على المنصة التي تختارها!
يتم تشغيل موقع الويب الذي تشاهده الآن بواسطة TopFX Global Ltd ، وهي كيان تنظمه هيئة الخدمات المالية (FSA) في سيشيل مع ترخيص تاجر أوراق مالية رقم SD037 لم يتم تأسيسه في الاتحاد الأوروبي أو خاضع لرقابة وطنية مختصة في الاتحاد الأوروبي سلطة.
إذا كنت ترغب في المتابعة ، يرجى تأكيد أنك تفهم وتقبل المخاطر المرتبطة بالتداول مع كيان خارج الاتحاد الأوروبي (كما هو موضح في نموذج إقرار المبادرة وأن قرارك سيكون بمبادرتك الحصرية وأنه لم يتم تقديم أي طلب من قبل TopFX Global Ltd أو أي كيان آخر داخل المجموعة.
لا تظهر هذه الرسالة مرة أخرى
يستخدم موقع TopFX ملفات تعريف الارتباط (الكوكيز) لتحسين تجربة المستخدم.
تندرج ملفات تعريف الارتباط هذه ضمن الفئات التالية: ملفات تعريف الارتباط الأساسية والوظيفية والتسويقية. قد تتضمن ملفات تعريف الارتباط الخاصة بالتسويق أيضًا ملفات تعريف ارتباط الطرف الثالث.
يمكنك تخصيص اختيارك لملفات تعريف الارتباط التي تريد قبولها.
ملفات تعريف الارتباط هذه ضرورية لموقع الويب ليعمل بشكل صحيح ولا يمكن إيقاف تشغيله.
تسمح ملفات تعريف الارتباط الوظيفية لموقع الويب بتذكر تفضيلات المستخدمين والخيارات التي تقوم بها على موقع الويب مثل اسم المستخدم والمنطقة واللغة.
تُستخدم ملفات تعريف الارتباط هذه لتتبع الزوار عبر مواقعنا الإلكترونية وعرض إعلانات أكثر صلة. تتضمن ملفات تعريف الارتباط الخاصة بالتسويق أيضًا ملفات تعريف ارتباط الطرف الثالث من الشركاء. لمزيد من المعلومات المتعلقة بحماية البيانات وجمعها ، يرجى الاطلاع على سياسة الخصوصية والكشف عن ملفات تعريف الارتباط.
