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15
May

Eurozone Industrial Production, Empire State Manufacturing Index

calendar 15/05/2023 - 08:12 UTC

The dollar is still seen moving slightly higher against most major currencies on Friday, with the USDX ending the day 0.61% higher, crossing the 102.0 mark. The dollar surged once again against the South African rand, with the USD/ZAR pair gaining by another 0.69% and moving higher into positive territory for a fourth consecutive session. A similar move was observed on the USD/CNH, the USD/MXN and the USD/INR which gained by 0.17%, 0.01% and 0.11% respectively. The USD/TRY marked a new all-time high on Friday, as the country is looking at an inflation rate of close to 50% and a tough race in the elections between candidates Erdogan and Kilicdaroglu.

All three main stock market indices in the U.S. ended lower on Friday, with the US 500 notching its second weekly loss in a row. The US 500, the US 30 and the US tech 100 lost by 0.19%, 0.06% and 0.44% respectively. Worries about the health of the Chinese economy remain a major drag on prices as some of the main Asian stock indices are seen posting a sharp decline on Friday with the China A50 losing 1.49% of its value and the Hong Kong 50 falling by 1.26%.

Negative sentiment in the cryptos market continues, with the main cryptocurrencies weakening to levels last seen in March. On a weekly basis, Bitcoin lost approximately 7.3% whereas Ethereum fell by almost 5.5%. The estimated crypto market capitalization is seen slightly higher, at $1.170 trillion on Sunday 08:30 PM from $1,140 trillion seen earlier this week.

In the spotlight for Monday is the eurozone industrial production report while later in the day, Canada will publish housing starts data, and the U.S. will announce the Empire state manufacturing index and TIC long term purchases.

EUR/USD

The euro ended 0.55% lower against the dollar on Friday with investors switching to safe havens investments after consumer sentiment data increased concerns about the U.S. debt ceiling and the next steps of the Fed’s monetary policy.

The University of Michigan consumer sentiment survey dipped to 57.7 in May, its lowest level in six months. Meanwhile, inflation expectations over the next five years rose to 3.2%, the highest level the survey recorded since 2008.

On Monday, eurozone industrial production report is due along with the U.S. Empire state manufacturing index and TIC long term purchases.

EUR/USD

Gold

Gold prices showed moderate losses for yet another session on Friday, posting a 0.2% decline, giving back all the gains from last week as investors evaluate the situation regarding a possible US debt ceiling crisis when talks are being postponed until next week. Congress now has just a few weeks to raise the national debt limit before the government potentially runs out of money.

The general market consensus is that the possibility of an economic slowdown in the country seems to be keeping the yellow metal supported above $2,000, amid steady safe-haven demand.

Gold

WTI Oil

WTI oil fell by another 1.74% on Friday, reversing all the gains seen earlier this week amid weak data from China that add pressure in the price of the fuel and could possibly attribute to energy traders not putting to much weight on OPEC’s latest monthly report which had a slight upgrade on Chinese oil demand.

According to OPEC+, China is now expected to require 800,000 barrels daily, up from the 760,000-forecast of last month.

Further pressure in the price of WTI could possibly be coming from gains in the U.S. dollar that marked its biggest weekly gain since February against the euro.

WTI Oil

US 500

Wall street posted another session with negative results on Friday, with the US 500 notching its second weekly loss in a row. The US 500, the US 30 and the US tech 100 lost by 0.19%, 0.06% and 0.44% respectively. The drop was led by weaker large cap shares following their recent rally, as data showed U.S. consumer sentiment dropped to a six-month low.

In the week ahead, investors will be closely monitoring, the NY Empire State and Philadelphia Fed manufacturing indexes, retail sales, industrial production, building permits, housing starts and existing home sales.

In the earnings front, Home Depot Inc, Walmart Inc, Cisco Systems Inc, and Applied Materials Inc are due to publish quarterly results.

US 500

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.

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