Top daily news
Investors hope that the American regulator discussed in the FOMC Minutes the possibility of tightening monetary policy amid a surge in inflation in the US in April to 4.2% YOY. The problem with the US dollar is that consumer prices will continue to rise without the Fed intervention. The inflation rates in the US for May will be released on June 10. Its current forecast is almost 5%. A possible increase in the Fed rate or tightening of monetary policy will negatively affect the quotes of precious metals and stock indices, but at the same time will strengthen the US dollar.
Forex news
| Currency Pair | Change |
|---|---|
| EUR USD | -0.04% |
| GBP USD | -0.05% |
| USD JPY | +0.2% |
| AUD USD | -0.4% |
Today, the US dollar index is growing slightly after yesterday’s strong fall. Now it is trading below the psychological level of 90 pips. Investors decreased their activity in anticipation of today’s publication of the materials of Fed’s (FOMC Minutes) April meeting at 19-00 CET. They hope that the US regulator discussed the possibility of tightening monetary policy amid a surge in inflation in the US in April to 4.2% yoy. The problem with the US dollar is that consumer prices will continue to rise without the Fed intervention. The inflation in the US for May will be released on June 10. Its current forecast is almost 5%. The GDP of Japan for the Q1 was published yesterday, which turned out to be worse than forecasted. It fell 5.1% yoy. This contributes to the weakening of the yen.
Stock Market news
| Indices | Change |
|---|---|
| Dow Jones Index | -0.78% |
| S&P 500 | -0.85% |
| Nasdaq 100 | -0.56% |
| US Dollar Index | +0.17% |
On Tuesday, the US stocks indices dropped for the third time in a row. April’s unexpectedly weak data on the US housing market contributed to this. The volume of new construction of residential buildings in the US (Housing Starts) fell (-9.5%) against the forecast (-0.7%). Tesla shares fell 2.4% after the announcement on the opening of a large short position in the amount of $534 million. This was done by the famous player Michael Burry. He likely believes that Tesla will face high competition. Almost all traditional automakers such as Ford, Volkswagen, BMW and others are going to mass-produce electric vehicles. Against the backdrop of good reporting by the Walmart retail chain (+ 2.4%), shares of other companies in the consumer and entertainment sector went up: MGM Resorts (+ 1.9%), Carnival (+ 1.7%) and Wynn Resorts (+1.2 %). Retailers Target, Lowe’s and TJX will continue to publish their reports today in the US. In addition to them, the manufacturer of computer network equipment Cisco will also report.
Commodity Market news
| Commodities | Change |
|---|---|
| WTI Crude | -1.48% |
| Brent Crude Oil | -1.38% |
| COPPER | -1.98% |
World oil prices fell yesterday due to the reports of progress in US-Iranian talks over easing or even lifting sanctions. They were imposed by Western countries on Iran for violations in the work of the Iranian nuclear industry. The lifting of sanctions will lead to an increase in Iranian oil exports. An additional negative factor for oil quotes was the increase in the number of patients with COVID-19 and the tightening of quarantines in India, Thailand and Taiwan. In addition, the independent American Petroleum Institute reported an increase in the US oil reserves for the week by 620 000 barrels. Today, as usual, there will be official data on the weekly stocks of American oil from the U.S. Energy Information Administration (EIA).
Gold Market News
| Metals | Change |
|---|---|
| Gold | -0.28% |
| Silver/US Dollar | -1.78% |
Gold is getting a little cheaper today in anticipation of the FOMC Minutes publication. A possible increase in the Fed rate or a tightening of monetary policy will negatively affect the quotes of precious metals and stock indices, but at the same time will strengthen the US dollar. We also note the decline in copper prices. The increase in rates will slow down the growth of the world economy and reduce the demand for non-ferrous metals. In addition, over the past few days, copper prices have been rising due to investors’ fears that tighter regulation of the copper industry in Chile may cause a reduction in production. However, the Chilean authorities have assured that this will not happen.