Market Update – May 12 – USD Holds on to Gains, Stocks Mixed

By
Analysis Team
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The USDIndex rallied to 101.95 as the cooler PPI (3.2% vs 3.4%) and Weekly Claims (264k vs. 245k) readings yesterday added to talk that the FED is done but the persistent threat of slow down/recession also gave the USD a safe haven bid. Yields ticked lower and US Stocks closed mixed, NIKKEI (+0.98%) has outperformed in Asian markets. Sterling tanked to 1.2500 post BOE rate hike and unconvincing outlook. NZD underperforms in Asian trading after weaker inflation expectations (2.79% vs 3.3%). The US debt ceiling issues progress was stalled as President Biden and congressional leaders postponed their scheduled meeting to next week.
Overnight  –  UK – March GDP missed (-0.3% vs 0.5%), Quarterly GDP was confirmed at 0.1%, and there were big beats for Ind. Prod. (0.7% vs 0.1%) and Manu. Prod. (0.7% vs -0.7%).   France March CPI confirmed at 0.6%.
  • FX – USDIndex rallied from 101.09 lows to 101.95 highs following weak data in China and US, trades at 101.85 now. EUR tested into 1.0900 and trades at 1.0925 now. JPY slipped below 134.00 again, before recovering to 134.75 now. Sterling collapsed to test 1.2500 yesterday, down from 1-year highs, at 1.2670 earlier this week, and is at 1.2515 currently.  
  • Stocks- US markets closed mixed (-0.66% to +0.18%). GOOGL +4.34%, TSLA +2.10% (Musk said he’d found CEO for Twitter & cut prices in US), PACW -22.07%, (more deposit outflows) PTON -8.9% – US500 closed -7.02pts 4130, FUTS are trading at 4150, below key resistance at 4175. 

  • Commodities – USOil – Futures have lost $3 a barrel from yesterday, declining from $73.50 to $70.50 today, after US Energy Secretary said strategic reserve oil purchases could begin on June 1. Gold – declined from $2040 yesterday to under $2008 today on the stronger USD. 
  • Cryptocurrencies – BTC continued to decline, breached the $26.75k lows from Wednesday & trades at $26.20k now.  

Today – US Export/Import Prices, Uni. of Michigan, Inflation & Consumer Sentiment, Treasury Secretary Yellen, Fed’s Bullard & Daly, BoE’s Pill, ECB’s de Guindos.

Biggest FX Mover @ (06:30 GMT) NZDCHF (-0.88%). From yesterday’s biggest gainer to today’s biggest loser. Declined from 0.5675 highs yesterday, back under 0.5600 to 0.5580 now. MAs aligned lower, MACD histogram & signal line negative & falling, RSI 17.01 OS but still falling, H1 ATR 0.00086, Daily ATR 0.00520.

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Stuart Cowell

Head Market Analyst

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