USD holds at highs (USDIndex 104.16), Stocks closed higher in Europe (DAX +1.01%, FTSE100 +1.50%) & Asian shares opened over 1% higher and closed positively (Nikkei +2.09%) US Futures +1.15%. Yields rallied (US 10yr 3.2976%). Oil ticks 2% higher, lifting CAD pairs, after Fridays sell-off and Gold & BTC slide sideways. Yellen talks of a “price cap” and “tax” for Russian oil exports and a tax “holiday” for gasoline in US to ease inflation. (Ruble @ 15 mth high). Japan PM Kishida & FM Suzuki: Rapid yen weakening is a source of concern. RBA’s Lowe rates need to go higher in low unemployment high inflation Australia.
Week Ahead – Will be dominated by Central Bank Speak topped by FED Chair Powell’s 2-day testimony to Congress. CPI & PMI data also due this week.
- USDIndex tested 104.00 on Monday and holds at 104.15 today.
- Equities – USA500 closed yesterday (Friday 3674), US500FUTS at 3725 now.
- Yields 10-year yield higher , trades at 3.29% now.
- Oil & Gold had mixed sessions – USOil recovered over 2% to trade at $110.20. Gold could not hold $1840 and trades at $1835 now.
- Bitcoin pivots off $20K, to test $21K now.
- FX markets – EURUSD holds at 1.0525, USDJPY holds over 135.00 zone shy of 24-yr high 135.50 and Cable trades up 20 pips to 1.2260.
Overnight – Goldman Sachs – US recession in the next year, @30% (was 15%)
Today – Canadian Retail Sales, US Existing Home Sales, New Zealand Trade Balance, Speeches from ECB’s Rehn, Fed’s Barkin & Mester.
Biggest FX Mover @ (06:30 GMT) CADJPY (+0.30%). Continues to move higher from 101.65 test on Thursday to 104.50, as Oil recovers from sell-off. Next key resistance 104.75 & 105.00. MAs aligning higher, MACD histogram positive & turning higher, RSI 71 ,OB but still rising, H1 ATR 0.139, Daily ATR 1.343.
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Stuart Cowell
Head Market Analyst
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