US Indices drifted lower at the opening of the New York session to trade at Tuesday’s lows. However, Dow and S&P500 were able to end the session in green. The positive sentiment generated by the expectations of better earnings were able to offset the worries of the rising corporate costs. Boeing posted better than expected profits boosting the share by 4.2%. However, trade war tensions might show up again as the US is investigating Huawei for “Violating Sanctions in Iran”.
The Dollar index rose to its highest levels since January 12 as the US bond yields are chasing multi-year highs. The 10-year U.S. Treasury yield closed above 3% for the second consecutive day. In terms of data, Durable Goods Orders are due today in addition to the weekly Jobless Claims.
The Euro fell to a 2-month low against the US dollar as investors await the European Central Bank meeting. The EURUSD traded at a major support zone that was being formed since early January. The ECB is expected to keep the monetary policy unchanged, especially after the economic figures of the first quarter turned disappointing. The press conference will be monitored closely as investors will be waiting more clarifications about the forward guidance.
Gold Prices slumped to a five-week low on Wednesday as the US dollar strengthened on higher treasury yields. Gold is pressured by the waning fears of a trade war and geopolitical conflicts, as gold is often seen as a store of value during times of political and financial uncertainty.
Oil prices rose on Wednesday despite the rise in US Crude Oil Inventories. Oil was supported by the expectations that president Trump will re-impose sanctions against Iran. The French president Emmanuel Macron said that he expects Trump to pull out from the nuclear deal. Trump will take his decision on May 12. Moreover, the political and economic turmoil that is taking place in Venezuela is weighing on its oil supply.
The most important economic events:
|11:45||EU||Deposit Facility Rate||-0.40%||-0.40%|
|11:45||EU||ECB Marginal Lending Facility||0.25%||0.25%|
|11:45||EU||ECB Interest Rate Decision (Apr)||0.00%||0.00%|
|12:30||EU||ECB Press Conference|
|12:30||US||Initial Jobless Claims||230||232|
|12:30||US||Core Durable Goods Orders (MoM) (Mar)||0.5%||1.0%|
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.