Gold rebounds after falling under 1800

“Make the most of yourself by fanning the tiny, inner sparks of possibility into flames of achievement.” — Golda Meir 

 

 

 

HEADLINES

 

• Sterling steadies as BoE's Bailey says inflation is 'bad situation' 
• Gold ticks up as dip in U.S. yields loosens dollar's grip
• Oil moves higher, making back early losses
• Wall Street falls as growth stocks, glum China data weigh
• USD/CAD to test low/mid-1.27s on a break under 1.2890 – Scotiabank
• USDJPY Near Term: Upside favored

 

 

 

FOREX

 

Sterling steadies as BoE's Bailey says inflation is 'bad situation' 

 

Sterling steadied on Monday after Bank of England Governor Andrew Bailey said the current inflation surge was the central bank's biggest challenge since it gained independence in 1997. 

In a choppy day, sterling had fallen both against the U.S. dollar and the euro as weak Chinese economic data added pressure on risky currencies. But it reversed some of those declines to trade flat after Bailey's speech to the Treasury Committee in the lower house of parliament.

Investors will be watching a slew of UK economic data due this week including job numbers on Tuesday, expected to be under pressure, and inflation on Wednesday, seen jumping to 9.1%.

 

 

 

COMMODITIES

 

 

Gold ticks up as dip in U.S. yields loosens dollar's grip 

Gold rose slightly on Monday as a retreat in U.S. Treasury yields offset headwinds from a relatively firm dollar, which, along with looming interest rate hikes, earlier pushed bullion to a more than three-and-a-half-month low. 

Gold's slight bounce was attributable to a dip in Treasury yields and a small pullback in the dollar, RJO Futures senior market strategist Bob Haberkorn said, adding that the overall trend for the dollar was "still high as the Fed is being aggressive with its rate hikes".

 

 

 

ENERGY

 

Oil moves higher, making back early losses 

 

Oil prices advanced on Monday as investor fears of a global recession spurred by lockdowns in China and weak economic data were offset by signs the European Union was stepping closer to an import ban on Russian crude.

Latest Chinese data showed retail sales in April shrank almost 11% from a year earlier, while factory production fell 2.9% year-on-year.

In line with the unexpected industrial output decline, China processed 11% less crude oil in April, with daily throughput the lowest since March 2020.

 

 

 

STOCKS

 

Wall Street falls as growth stocks, glum China data weigh 

 

Wall Street's main indexes fell on Monday as downbeat China data added to worries about a global economic slowdown against the backdrop of aggressive policy tightening by the U.S. Federal Reserve. 

Seven of the 11 major S&P sectors declined. Technology and consumer discretionary stocks fell 0.8% and 1.7%, respectively.

Wall Street closed sharply higher on Friday, but still the S&P 500 (.SPX) and the Nasdaq (.IXIC) indexes posted their longest weekly losing streaks in over a decade.

 

 

 

ANALYSIS

 

USD/CAD to test low/mid-1.27s on a break under 1.2890 – Scotiabank 

“The USD closed well off the week’s high last week and the pattern on the weekly chart suggests a top may be developing (via a weekly ‘shooting star’ signal).”

“Intraday chart patterns are supportive of a top developing for the USD but spot needs to crack 1.2890 today/tomorrow to develop more downside momentum. That could put funds on track for a test of the low/mid-1.27s.” 

 

 

 

CHART

 

USDJPY Near Term: Upside favored

Technical View: Long position above 127.8. Target 130. Conversely, break below 127.8, to open 127.

Comments: The pair is expected to resume advance after correction.

 

 

Source: Trading Central 

 

 

 

CALENDAR

 

*Times in GMT

 

 

 

Source: FX Street Economic Calendar

 

 

SOURCES 

https://www.reuters.com/markets/europe/worsening-global-risk-sentiment-knocks-sterling-2022-05-16/
https://www.cnbc.com/2022/05/16/gold-up-from-3-month-lows-as-us-bond-yields-weaken.html
https://www.cnbc.com/2022/05/16/oil-prices-drop-on-profit-taking-supply-fears-linger.html
https://www.reuters.com/markets/europe/futures-slip-china-data-sparks-growth-fears-2022-05-16/
https://www.fxstreet.com/news/usd-cad-to-test-low-mid-127s-on-a-break-under-12890-scotiabank-202205161330