English
26
May

U.S. Jobless Claims, Home Sales, Canadian Retail Sales

calendar 26/05/2022 - 11:41 UTC

The U.S. dollar started to recover on Wednesday from the four weeks low seen in the USDX index earlier this week. The greenback moved also stronger against multiple emerging market currencies like the South African rand (ZAR) and the Indian rupee (INR), though the Mexican peso remained in close to its recent high with the USD/MXN rate still below 20.0.

The USD/TRY rate continued moving to the upside, reaching for the first time this year a level above 16.4 and since the beginning of the month the rate move already up by more than ten per cent. This is the worst performance for the lira that was seen so far this year.

While U.S. stock market indices like the US 500 and the US 30 continued recovering, European markets like the Germany 40 and Europe 50 and some Asian markets have been trading flat over the past few days. Chinese indices did not underperform particularly compared to other markets despite the Chinese premier Li Keqiang delivering a warning that it might be difficult (but manageable) to attain positive growth rates in the current quarter due to the impact of COVID lockdowns.

On Thursday the weekly jobless claims data will be published in the U.S. later on also the pending home sales index will be released, while from Canada data on retail sales can be expected.

EUR/USD

With the dollar making its most meaningful recovery in a week on Wednesday, the EUR/USD pair declined below the 1.07-mark. By Thursday morning the pair was still up by more than one per cent on a weekly basis. Against other majors in particular the pound sterling (GBP) the euro also traded weaker, thus reversing from some of the gains at the start of the week.

On Thursday in Italy the ISAE Consumer Confidence index will be published.

EUR/USD

Gold

Gold prices reversed lower after reaching a new two weeks high and were by Thursday morning trading almost unchanged on a weekly basis. Silver and platinum also came under pressure, while palladium retained most of its gains from the first two trading days of this week.

While the appreciation of the dollar could have played some role in the market move, it should be noted that the Gold (EUR) CFD contract also fell by around 0.3% on Wednesday and was by Thursday morning down by more than one per cent on a weekly basis despite the common European currency underperforming on Wednesday.

The minutes of the last FOMC meeting released in the late afternoon hours indicated that the central banking organisation would move ahead with possibly three 50 bp rate hikes, though there is quite an uncertainty what happens afterwards. Low rates coupled with a high rate of inflation of course mean that real rates remain low and in some cases even negative. For gold investors who are looking for a longer-term alternative to dollar investments all these factors might be of significance.

Gold

WTI Oil

At the end of the day oil prices traded virtually unchanged, having recovered from the intraday dip around the time the Energy Information Administration (EIA) published its weekly data on crude oil, gasoline and distillate stockpiles. EIA numbers indicated that gasoline stockpiles were down only by 0.5 million barrels, while distillates even recorded a build amounting to 1.7 million barrels. These numbers deviate quite significantly from the data the American Petroleum Institute (API) released on Tuesday where they estimated a drop in gasoline inventories amounting to 5.1 million barrels and distillates stockpiles also declining by 0.9 million barrels.

WTI Oil

US 500

While the US Tech 100 index has been trading this week just side-ways, other markets like the US 30 and US 500 managed to slowly but steadily continue improving. On Wednesday the US 500 ended its fourth trading day in a row with a higher valuation and if the trend continues, could for the first time in eight weeks end the week on the upside.

Shares of Nvidia (+5.19%) dropped by more than six per cent during the extended session, thus erasing all the intraday gains as investors seemed somewhat disappointed by the company’s earnings release on Wednesday after markets closed. While the company best-known for its graphics chips delivered solid revenue results at $8.29 bn. exceeding the previous guidance and expectations and improved the earnings-per-share (adjusted) to $1.36 the company disclosed that the revenue of the current quarter will be impacted by around half a billion dollar due to the conflict in Ukraine as well as the impact of the ongoing lockdowns in parts of China.

Snowflake shares tumbled even lower during the extended session, declining at the end by close to fourteen per cent despite the company managing to persistently increase revenue on a quarterly basis, now amounting to $422.4 million, it still reports a loss in terms of bottom line results at $0.53 per share.

On Thursday Alibaba, Costco, Autodesk, Dell and Zscaler are set to publish their respective earnings while on Friday Pinduoduo and Canopy Growth Corporation publish theirs.

US 500

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