America roundup: Dollar rises as US stocks fall, ECB decision looms, Wall Street tumbles, gold gains momentum, oil nears highest level since 13 weeks on strong US demand, optimism from China – June 9, 2022

Market overview

• US Wholesale Trade Sales in April (monthly) 0.7%, previous 1.7%

• US Wholesale Inventories (monthly) 22.2%, previous 1%

• US Gasoline Inventories -0.812M, Forecast 1.075M, Previous -0.711M

• US Cushings Crude Oil Inventories – 1.593 million, previous 0.256 million

• US Crude Oil Inventories -1.917M forecast, -5.068M previous

Forward-looking economic data

• 03:00 China Trade Balance (USD) 58.00 billion forecast, previous 51.12 billion

• 03:00 Imports from China in May (Annual) 2.0% previous

• 03:00 China May Exports (YoY)8.0% forecast, 3.9% previous

• 08:00 China New Loan 1,275.0B forecast, 645.4B previous

Future Outlook – Events, Other Releases (GMT)

• No significant event

Currency summaries

EUR/USD: The euro stabilized against the dollar on Wednesday as investors focused on Thursday’s European Central Bank meeting and Friday’s US CPI data. Investors increased their bets on ECB rate hikes and as European markets opened, money markets were pricing in 75 basis points of rate hikes in September. With the bank widely expected to start hikes in July and move in 25 basis point increments, the pricing implies traders now expect its hikes to include a rare 50 basis point move in a single meeting by September. Immediate resistance can be seen at 1.2761 (38.2% fib), a break up can trigger a rise towards 1.2844 (50% fib). On the downside, immediate support is seen at 1.2649 (23.6% fib), a break below could take the pair down to 1.2557 (23rd May low).

GBP/USD: The pound fell on Wednesday, remaining close to a near three-week low reached this week against the US dollar, amid investor jitters over a vote of confidence in British Prime Minister Boris Johnson which made him politically vulnerable. Heightened political uncertainty has added further pressure on the pound, which has fallen more than 7% this year, weighed down by Britain’s bleak growth outlook. The British currency fell 0.5% against a rising US dollar at $1.2528 at 0840 GMT after hitting its lowest level since May 19 at $1.2433 on Tuesday. Immediate resistance can be seen at 1.2556 (9DMA), a break up can trigger a rise towards 1.2630 (38.2% fib). On the downside, immediate support is seen at 1.2521 (23.6% Fib A), a break below could take the pair towards 1.2446 (7th June low).

USD/CAD: The Canadian dollar weakened against its US counterpart on Wednesday, returning to its highest level in nearly seven weeks, as risk appetite wavered ahead of key macroeconomic events in the coming days. The price of oil, one of Canada’s top exports, rose nearly 3% to $122.96 a barrel, supported by rising U.S. gasoline demand despite record pump prices . , after hitting its highest since April 21 at 1.2518. Immediate resistance can be seen at 1.2569 (5DMA), a break up can trigger a rise towards 1.2618 (38.2% fib). On the downside, immediate support is seen at 1.2518 (23.6% fib), a break below could take the pair towards 1.2472 (BB lower).

USD/JPY: The dollar strengthened on Wednesday as US equities fell and added to the attractiveness of the greenback. The greenback hit a new two-decade high against the yen, which weakened to 134.47 to the dollar, its lowest level since Feb. 27, 2002, and the euro hit its highest against the safe-haven yen since January 5, 2015. The Bank of Japan remains one of the few global central banks to maintain an accommodative stance while others have adopted interest rate tightening policies to combat the inflation. A strong resistance can be seen at 134.22 (daily high), a break up can trigger a rise towards 135.00 (psychological level). On the downside, immediate support is seen at 133.16 (38.2% fib), a break below could take the pair towards 132.11. (50% fiber).

Summary of actions

European stocks fell on Wednesday on worries about slowing economic growth and Credit Suisse’s gloomy forecasts weighing on banks, as investors braced for Thursday’s European Central Bank and Reserve meeting. federal government next week.

Britain’s benchmark FTSE 100 closed down 0.08%, Germany’s Dax ended down 0.76%, France’s CAC ended the day down 0.80%.

US stocks fell on Wednesday as Treasury yields rose above the psychologically important 3% level and oil prices surged, stoking concerns about inflation and the outlook for interest rates.

The Dow Jones closed 0.81%, the S&P 500 closed 1.08%, the Nasdaq stabilized 0.73%.

Summary of treasury bills

Treasury yields rose on Wednesday after the US Treasury Department saw lukewarm demand for a 10-year note sale, and as investors awaited much-anticipated inflation data on Friday.

Benchmark 10-year yields gained 6 basis points to 3.029%. Two-year yields rose 4 basis points to 2.774%.

Summary of raw materials

Gold edged higher in choppy trading on Wednesday as concerns over economic growth bolstered the metal’s appeal as a safe haven ahead of US inflation data that could guide the timing of a rate hike in the US. Federal Reserve.

Spot gold rose 0.1% to $1,853.82 an ounce at 2:29 p.m. EDT (6:29 p.m. GMT). US gold futures rose 0.2% to $1,856.50.

Oil prices held near 13-week highs on Thursday, supported by robust demand in the United States, the world’s largest consumer, while demand is expected to rebound in China as COVID-19 restrictions in major cities are eased. .

Brent crude futures for August rose 12 cents to $123.70 a barrel at 00:33 GMT, while US West Texas Intermediate crude for July was at $122.17 a barrel, up 6 cents.

Garland K. Long