JPY bounces before BOJ

“There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

 

 

HEADLINES

 

 

• Dollar jumps on China growth fears, yen rebounds before BOJ meeting
• Gold firms as concerns over growth, inflation persist
• Oil prices rebound from sharp drop on China demand concerns
• European shares close down, Wall Street falls on earnings anxiety
• How Elon Musk’s takeover of Twitter could impact its 7,000-plus employees
• AUD/USD to climb towards the 0.77 area over the coming six months – Rabobank
• EURUSD Short Term: Downside favored

 

 

FOREX

 

 

Dollar jumps on China growth fears, yen rebounds before BOJ meeting

 

The dollar hit a two-year high on Tuesday as concerns about slowing growth in China and expectations that the Federal Reserve will aggressively hike rates boosted demand for the greenback.

The Japanese yen also rebounded as investors speculated that the Japanese central bank or government may act to stabilize the currency, which last week hit a 20-year low against the dollar.

That may be slower than previously expected. China last month targeted economic growth of around 5.5% this year.

 

 

COMMODITIES

 

 

Gold firms as concerns over growth, inflation persist

 

Gold rose on Tuesday, recovering slightly from a retreat to an over one-month trough in the last session, as investors sought cover from fears of stalling global growth and soaring inflation.

U.S. gold futures gained 0.3% to $1,902.30.

Some buying was re-emerging in safe haven products like gold, after news of China’s lockdown impacting demand in the energy and metals markets, said David Meger, director of metals trading at High Ridge Futures, also attributing the uptick to bargain hunting following the “overdone” dip.

 

Oil prices rebound from sharp drop on China demand concerns

 

Oil prices opened slightly higher on Tuesday, after falling sharply the prior session on worries that continued Covid-19 lockdowns in China would eat into demand and as the U.S. dollar rose to a two-year high.

Both contracts had settled down around 4% on Monday, with Brent down as much as $7 a barrel in the session and WTI dipping roughly $6 a barrel.

In China lockdowns to counter Covid in Shanghai have dragged into their fourth week. Meanwhile orders for mass testing, including in Beijing’s largest shopping district, have prompted fears of other Shanghai-style lockdowns.

 

 

STOCKS

 

 

European shares close down, Wall Street falls on earnings anxiety

 

U.S. shares fell on Tuesday and European stocks extended losses for a third session as investors warily awaited U.S. tech earnings and worries over global growth lingered.

China's COVID-19 curbs and fears of aggressive U.S. Federal Reserve tightening continued to damp risk appetite and lifted the dollar to new two-year highs.

 

How Elon Musk’s takeover of Twitter could impact its 7,000-plus employees

 

The future is uncertain for Twitter employees after the board accepted a $44 billion offer from Tesla CEO Elon Musk to buy the popular social media platform and take it private on Monday. 

It is expected to take three to six months for the deal to close, the New York Times reports, but Agrawal said that between now and then, operations at Twitter will continue as normal.

 

 

ANALYSIS

 

 

AUD/USD to climb towards the 0.77 area over the coming six months – Rabobank 

 

“We maintain that AUD/USD can shift higher in the coming months. This view is based on the improvement in Australia’s terms of trade which stems from higher energy prices linked with the Russia/Ukraine conflict. It also assumes the development of a hawkish stance from the RBA and the likelihood that the USD will finish the year lower vs. a broad basket on currencies. A sharp slowdown in growth in China this year linked with Covid outbreaks is a risk to this view.”

“Australian economic strength and a more hawkish RBA can lift AUD/USD to the 0.77 area on a six-month view.”

 

 

CHART

 

 

EURUSD Short Term: Downside favored

Technical View: Short position below 1.07. Target 1.061. Conversely, break above 1.07, to open 1.073.

Comments: The pair breaks below support.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

SOURCES:

https://www.cnbc.com/2022/04/26/forex-markers-euro-pound-dollar-china-covid-lockdown-interest-rate.html 
https://www.cnbc.com/2022/04/26/gold-markets-dollar-treasury-yield.html 
https://www.cnbc.com/2022/04/26/oil-markets-china-covid-lockdown-dollar-.html 
https://www.reuters.com/business/global-markets-wrapup-1-2022-04-26/ 
https://www.cnbc.com/2022/04/26/how-elon-musks-takeover-of-twitter-could-impact-its-7000-plus-employees.html?&qsearchterm=elon%20musk 
https://www.fxstreet.com/news/aud-usd-to-climb-towards-the-077-area-over-the-coming-six-months-rabobank-202204261405