Global shares and S&P 500 futures are down in what seems like profit-taking after major US indexes hit new highs on Thursday. The Chinese Caixin Manufacturing PMI missed estimates with 51.1, below estimates.
On Wall Street, Amazon reported earnings that beat estimates, joining a long list of most robust figures published by large companies. Reports from banks are eyed on Friday.
US Gross Domestic Product came out at 6.4% annualized for the first quarter, within estimates and dragged down by a sharp drawdown in inventories.
US President Joe Biden has been promoting his twin plans worth a total of $4 trillion, yet investors are skeptical about what could pass Congress.
The US dollar is edging higher as 10-year Treasury yields have stabilized around 1.65% off the lows. GBP/USD is below 1.3950 and EUR/USD is hovering above 1.21.
Eurozone data: French GDP beat estimates with a quarterly increase of 0.4% in the first quarter, the first in a big bulk of eurozone growth and inflation figures. Germany is projected to report a squeeze of 1.5% in the first three months of the year, and the entire currency bloc is forecast to print -0.8%.
Preliminary inflation estimates for April are predicted to show a pickup in the headline Consumer Price Index from 1.3% to 1.6%, partly owing to base-effect. Core CPI is expected to drop. France and Portugal are the latest European countries to announce a loosening of restrictions as Europe advances with its vaccination scheme and COVID-19 cases fall.
Canada publishes monthly GDP figures for February, which are estimated to show an ongoing recovery.
24-hour view: “Our view for AUD yesterday was that it ‘could breach 0.7815 but the next major resistance at 0.7850 is likely out of reach’. While AUD rose to 0.7818, the subsequent pullback was relatively sharp as it dropped to 0.7751 during NY hours. The sharp pullback appears to be overdone and AUD is unlikely to weaken further. For today, AUD is more likely to consolidate and trade within a 0.7755/0.7805 range.”
Next 1-3 weeks: “We continue to hold the same view from yesterday (29 Apr, spot at 0.7800). As highlighted, ‘the risk is shifting to the upside but at this stage, AUD may find it difficult to break the solid resistance at 0.7850’. On the downside, a breach of 0.7740 (‘strong support’ level) would indicate that the upside risk has dissipated.”
Open interest in Gold futures markets shrunk for the fourth consecutive session on Thursday, this time by 839 contracts considering flash data from CME Group. On the other hand, volume rose for the third straight session, now by around 36.6K contracts.
Gold faces minor support around $1,745
Gold prices tested multi-day lows on Thursday, although they managed to rebound afterwards. This price action was in tandem with declining open interest, removing legs from the recovery and leaving the door open to further losses in the very near-term. A deeper pullback is expected to meet interim support at the 50-day SMA, today near $1,745 per ounce troy.
CME Group’s preliminary figures for Crude Oil futures markets noted open interest increased for yet another session on Thursday, now by around 12.5K contracts. Volume followed suit and rose by more than 5K contracts, its fifth build in a row.
WTI now looks to YTD highs near $68.00
Prices of the WTI extended the recovery on Thursday and clinched new monthly peaks beyond the $65.00 mark per barrel. The move was amidst rising open interest and volume, hinting at the idea that further gains look likely in the very near-term. Against that, the next target of note now shifts to the 2021 highs just below $68.00 per barrel.
Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. UR Trade Fix Ltd accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Past performance does not constitute a reliable indicator of future results and future forecasts do not constitute a reliable indicator of future performance.
It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests when providing our services