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Global Markets:

• Asian Stock Markets : Nikkei up 0.94%, Shanghai Composite down 0.25%, Hang Seng up 0.14%, ASX up 0.99%
• Commodities : Gold at $1814.22 (-0.26%), Silver at $21.66 (-0.40%), Brent Oil at $113.47 (+1.38%), WTI Oil at $111.52 (+1.72%)
• Rates : US 10-year yield at 2.979, UK 10-year yield at 1.852, Germany 10-year yield at 1.054

News & Data:

• (GBP) CPI y/y 9.00% vs 9.10% expected
• (AUD) Wage Price Index q/q 0.70% vs 0.80% expected
• (USD) Retail Sales m/m 0.90% vs 1.00% expected
• (USD) Core Retail Sales m/m 0.60% vs 0.40% expected
• ECB’s Lagarde gives national central bank chiefs louder voice on policy
• Japan economy minister Yamagiwa: Economy to pick up but uncertainty due to Ukraine

Markets Update:

Asian stock markets are mostly higher on Wednesday, following the broadly positive cues overnight from Wall Street, as traders indulged in buying after US Fed Chair Jerome Powell’s positive comments about the strength of the economy and news of lifting of lockdown restrictions in China.

Persistent inflation and aggressive rate hikes had stoked concerns about a potential recession. Powell said he is confident that the central bank can raise rates and deal with inflation without sending the economy into recession. He added that the economy is strong and is well positioned to withstand less accommodative monetary policy.

The Japanese stock market is sharply higher on Wednesday, extending the gains in the previous three sessions, with the Nikkei 225 moving above the 26,800 level, following the broadly positive cues overnight from Wall Street, as traders reacted to better-than-expected GDP data. The Australian stock market is significantly higher on Wednesday, extending the gains in the previous three sessions, with the benchmark S&P/ASX 200 just below the 7,200 level, driven by gains in materials and technology stocks. Mainland Chinese stocks closed lower, with the Shanghai Composite down 0.25% to 3,085.98 while the Shenzhen Component dipped 0.197% to around 11,208.08. The Hang Seng index in Hong Kong sat fractionally lower, as of its final hour of trading.

Crude oil prices pared early gains and settled lower Tuesday, reacting to reports that the Biden administration is set to ease some of the sanctions imposed on Venezuela. The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 103.546 after a recent decline from levels above 104.

Upcoming Events:

• 12:30 PM GMT – (USD) Philly Fed Manufacturing Index
• 12:30 PM GMT – (USD) Unemployment Claims
• 02:00 PM GMT – (USD) Existing Home Sales

What happened across the Asia session?

The Australian quarter-on-quarter Wage Price Index came in at 0.7% (expected 0.8%, previous 0.7%). It is a leading indicator of consumer inflation as businesses pass on the higher cost of labour to the consumer.

What does it mean for Europe and US Sessions?

The CPI data from the UK (expected 9.1%, previous 7.0%) and Canada (expected 0.5%, previous 1.4%). would set expectations for the pace of rate increases amid toppish inflation levels in the US.

The Dollar Index (DXY) Update

Key news events today

No major news events. 

What can we expect from DXY today?

Fed chair Powell stated that there is broad support for the FOMC to have 50bps hikes on the table at the next two meetings. The central bank will not hesitate to raise rates until inflation comes down.

Central Bank Notes:

• Confirmed that the committee expects further 50bps hikes to be appropriate; 75bps hikes off the table
• Balance sheet reduction push up to $60b (treasuries) and $35b (MBS) over a three-month timeframe
• Next meeting on 15 June 2022

Next 24 Hours Bias

Strong Bullish

Gold (XAU) Update

Key news events today

No major news events. 

What can we expect from Gold today?

The assertion by the US central bank chief on the interest rate hike path to quell inflation is likely to weigh on the non-interest-bearing precious metal.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

ECB’s Knot stated that a 25bps hike in rates is realistic while a 50bps bump is also likely but dependent on incoming data that would suggest that inflation is widespread. 

Central Bank Notes:

• Plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. 
• Highlighted risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. 
• Next meeting on 9 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

With the slow but gradual turn expected from the ECB, the SNB is likely to follow suit since the latter tends to lag the former in terms of monetary policy directives.

Central Bank Notes:

• Kept all policies unchanged as expected, 
• More concerned with the Real Effective Exchange Rate than the nominal. 
• Remains very dovish and in no way expected to change anytime soon. 
• Next meeting on 16 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bullish

The Pound (GBP)

Key news events today

CPI y/y, 0600 GMT

What can we expect from GBP today?

BoE’s Cunliffe hinted at a drop in risky assets as quantitative tightening progresses. A lower-than-expected UK CPI (expected 9.1%, previous 7.0%) would tame hawkish expectations somewhat.

Central Bank Notes:

• A third of the six members who voted for a hike viewed that the latest increase marked the end of the current hiking cycle
• Peak inflation revised to more than 10%, which added to the stagflation fears; possible GDP contraction in 2023. 
• Quantitative tightening plans to be updated at the August meeting
• Next meeting on 16 June 2022

Next 24 Hours Bias

Mixed

The Canadian Dollar (CAD)

Key news events today

CPI m/m, 1230 GMT

What can we expect from CAD today?

The country could add up to 500k in oil exports in 2022 and another 400k bpd in 2023.

The US crude oil inventories report is expected to see a build of 2.1m (previous 8.5m) while the month-on-month Canadian CPI is expected at 0.5% (previous 1.4%). 

Central Bank Notes:

• Announced a start to passive quantitative tightening from the end of April by ending its reinvestment of maturing bonds. 
• Increased their neutral rate estimate to 2.5% from 2.25%. 
• Next meeting on 1 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

The improving Covid-19 situation in China on the demand front is likely to be balanced by a proposed global cap on Russian oil prices on the supply front. 

Next 24 Hours Bias

Mixed

DXY:

On the H4, with MACD moving in a bearish momentum, we have a bearish bias that price will drop to our 1st support at 102.501 where the horizontal swing low support and 161.8% Fibonacci extension is from our 1st resistance at 103.615 in line with the horizontal pullback resistance. Alternatively, price may break 1st resistance structure and head for 2nd resistance at 104.884 where the horizontal swing high resistance is.

Areas of consideration:

• H4 time frame, 1st resistance at 103.615
• H4 time frame, 1st support at 102.501

XAU/USD (GOLD):

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1832.689 where the horizontal swing high resistance and 38.2% Fibonacci retracement is to our 1st support at 1798.411 in line with the horizontal swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance at 1858.022 where the horizontal swing high resistance is.

Areas of consideration: 

• H4 time frame, 1st Resistance at 1832.689
• H4 time frame, 1st Support at 1798.411

GBP/USD:

On the H4, with price moving above the ichimoku and the recent breakthrough in our descending trendline, we have a bullish bias that price will rise from our 1st support at 1.23982 where the 23.60% Fibonacci retracement and horizontal overlap support is to our 1st resistance at 1.26283 in line with the horizontal swing high resistance. Alternatively, price may break 1st support structure and head for 2nd support at 1.22751 where the horizontal pullback support and 61.8% Fibonacci retracement is.

Areas of consideration:

• H4 1st resistance at 1.26283
• H4 1st support at 1.23982

USD/CHF:

On the H4, with price moving above our ichimoku cloud, we have a bullish bias that price will riseto our 1st resistance at 1.00497 where the 61.8% Fibonacci projection and swing high resistance is from our 1st support at 0.98848 in line with the horizontal overlap support and 50% fibonacci retracement. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal pullback resistance is.

Areas of consideration

• 1st support level at 0.98848
• 1st resistance level at 1.0049

EUR/USD :

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1.05753 where the horizontal pullback resistance and 78.6% Fibonacci retracement is to our 1st support at 1.05070 in line with the overlap support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal swing high resistance is

Areas of consideration :

• H4 1st resistance at 1.05753
• H4 1st support at 1.05070 

USD/JPY:

On the H4, with the MACD moving in a bullish momentum, we have a bullish bias that price will rise from our 1st support at 128.996 where the 38.2% Fibonacci retracement and horizontal overlap support is to our 1st resistance at 129.603 in line with the horizontal swing high resistance. Alternatively, price may break 1st support structure and head for 2nd support at 128.070 where the horizontal swing low support is.

Areas of consideration:

• H4 time frame, 1st resistance at 129.603
• H4 time frame, 1st support at 128.996

AUD/USD:

On the H4, with price expected to reverse off the ichimoku cloud resistance, we have a bearish bias that price will drop from our 1st resistance at 0.70191 where the pullback resistance and 50% Fibonacci retracement is to our 1st support at 0.68870 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 61.8% Fibonacci retracement is.

Areas of consideration 

• H4 1st resistance at 0.70191
• H4 1st support at 0.68870

NZD/USD:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 0.63779 where the50% Fibonacci retracement and horizontal pullback resistance is to our 1st support at 0.62276 in line with the horizontal swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance at 0.64352 in line with 61.8% Fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st support at 0.62276
• H4 time frame, 1st resistance at 0.63779

USD/CAD:

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1.29160 where the horizontal pullback resistance is to our 1st support at 1.27195 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal swing high resistance is.

Areas of consideration:

• H4 time frame, 1st resistance at 1.29160
• H4 time frame, 1st support at 1.27195

OIL: 

On the H4, with price expected to reverse off the stochastics indicator resistance, we have a bearish bias that price will drop from our 1st resistance at 111.36 where the 23.6% Fibonacci retracement is to our 1st support at 106.51 in line with the 50% Fibonacci retracement. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 127.2% Fibonacci extension.

Areas of consideration:

• H4 time frame, 1st resistance of 111.36 
• H4 time frame, 1st support of 106.51

Dow Jones Industrial Average:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 32553 where the 50% Fibonacci retracement is to our 1st support at 31294 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 78.6% Fibonacci retracement.

Areas of consideration : 

• H4 time frame, 1st resistance at 32553
• H4 time frame, 1st support at   31294

The accuracy, completeness and timeliness of the information contained on this site cannot be guaranteed. IC Markets does not warranty, guarantee or make any representations, or assume any liability regarding financial results based on the use of the information in the site.

News, views, opinions, recommendations and other information obtained from sources outside of www.icmarkets.com.au, used in this site are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. IC Markets assumes no responsibility for the content of any linked site.

The fact that such links may exist does not indicate approval or endorsement of any material contained on any linked site. IC Markets is not liable for any harm caused by the transmission, through accessing the services or information on this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user’s software, hardware, data or property.

What happened in the US session?

The month-on-month US Retail Sales came in at 0.9% in April, lower than the 1.0% expected. The March result nearly tripled to 1.4% from 0.5% upon revision.

What does it mean for the Asia Session?

The antipodeans are expected to gain against the greenback following the more hawkish-than-expected turn by the RBA. Further gains are likely to be limited by the anticipated weakness in gold and the hawkish Fed.

The Dollar Index (DXY)

Key news events today

No major news events. 

What can we expect from DXY today?

Fed chair Powell stated that there is broad support for the FOMC to have 50bps hikes on the table at the next two meetings. The central bank will not hesitate to raise rates until inflation comes down.

Central Bank Notes:

• Confirmed that the committee expects further 50bps hikes to be appropriate; 75bps hikes off the table
• Balance sheet reduction push up to $60b (treasuries) and $35b (MBS) over a three-month timeframe
• Next meeting on 15 June 2022

Next 24 Hours Bias

Strong Bullish

Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

The assertion by the US central bank chief on the interest rate hike path to quell inflation is likely to weigh on the non-interest-bearing precious metal.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

Wage Price Index q/q, 0030 GMT

What can we expect from AUD today?

Australian central bank policymakers considered 40bps for the size of the rate increase, but most preferred 25bps. Additionally, according to the latest RBA meeting minutes, the members agreed that further hikes would most likely be required to ensure inflation returns to the target.

Central Bank Notes:

• Stated that further increases in the cash rate will be required to bring inflation back in line with the target
• Announced passive quantitative tightening by stopping the reinvestment of maturing bonds.  
• Next meeting on 7 June 2022

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Amid a lack of first-tier data releases and currency-specific news flow, the Kiwi is still expected to follow the directional cues from the Aussie following the release of the RBA’s Monetary Policy Meeting Minutes.

Central Bank Notes:

• Stressed that inflation is a concern and will ensure that higher price pressures don’t become embedded in longer-term inflation expectations
• Stated that more hikes are needed but didn’t increase their neutral rate expectations 
• Next meeting on 25 May 2022

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The latest Japanese GDP figures saw negative growth but are still better than expected. The country’s Economic Minster expects the economy to pick up, though uncertainty remains due to the war in eastern Europe and supply-chain issues.

Central Bank Notes:

• Kept all policy settings unchanged at their April meeting
• Reiterated that rates will stay low for the foreseeable future and won’t hesitate to add stimulus if the economy needs it
• Next meeting on 16 June 2022

Next 24 Hours Bias

Weak Bearish

DXY:

On the H4, with price moving above the ichimoku cloud, we have a bullish bias that price will rise to our 1st resistance at 104.989 where the swing high resistance is from our 1st support at 104.078 in line with the horizontal pullback support and 38.2% Fibonacci retracement. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal swing low support is.

Areas of consideration:

• H4 time frame, 1st resistance at 104.989
• H4 time frame, 1st support at 104.078

XAU/USD (GOLD):

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1834 where the horizontal pullback resistance and 61.8% Fibonacci retracement is to our 1st support at 1798 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance is.

Areas of consideration: 

• H4 time frame, 1st Resistance at 1834
• H4 time frame, 1st Support at 1798

GBP/USD:

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1.23967 where the 50% Fibonacci retracement and swing high resistance is to our 1st support at 1.21711 in line with the horizontal overlap support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance is.

Areas of consideration:

• H4 1st resistance at 1.23967
• H4 1st support at 1.21711

USD/CHF:

On the H4, with price expected to reverse off the stochastics indicator, we have a bearish bias that price will drop from our 1st resistance at 1.00497 where the 61.8% Fibonacci projection and swing high resistance is to our 1st support at 0.98848 in line with the horizontal overlap support and 50% fibonacci retracement. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal pullback resistance is.

Areas of consideration

• 1st support level at 0.98848
• 1st resistance level at 1.00497

EUR/USD :

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1.04862 where the horizontal pullback resistance and 50% Fibonacci retracement is to our 1st support at 1.03547 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal swing high resistance is.

Areas of consideration :

• H4 1st resistance at 1.04862
• H4 1st support at 1.03547

USD/JPY:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 129.493 where the 50% Fibonacci projection and swing high resistance is to our 1st support at 127.500 in line with the horizontal swing low support and 61.8% fibonacci projection. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal swing high resistance is.

Areas of consideration:

• H4 time frame, 1st resistance at 129.493
• H4 time frame, 1st support at 127.500

AUD/USD:

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 0.70378 where the pullback resistance and 50% Fibonacci retracement is to our 1st support at 0.68870 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 61.8% Fibonacci retracement is.

Areas of consideration 

• H4 1st resistance at 0.70378
• H4 1st support at 0.68870

NZD/USD:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 0.63428 where the 23.6% Fibonacci retracement, 38.20% Fibonacci retracement and horizontal swing high resistance is to our 1st support at 0.62274 in line with the horizontal swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance at 0.64052 in line with 50% Fibonacci retracement and horizontal pullback resistance.

Areas of consideration:

• H4 time frame, 1st support at 0.62274
• H4 time frame, 1st resistance at 0.63428

USD/CAD:

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1.29076 where the horizontal pullback resistance and 50% Fibonacci retracement is to our 1st support at 1.27216 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance is.

Areas of consideration:

• H4 time frame, 1st resistance at 1.29076
• H4 time frame, 1st support at 1.27216

OIL: 

On the H4, with price expected to reverse off the stochastics indicator resistance, we have a bearish bias that price will drop from our 1st resistance at 114.39 where the 127.2% Fibonacci extension is to our 1st support at 111.11 in line with the 23.6% Fibonacci retracement. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 38.2% Fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st resistance of 114.39
• H4 time frame, 1st support of 111.11

Dow Jones Industrial Average:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 114.39 where the 127.2% Fibonacci extension is to our 1st support at 111.11 in line with the 23.6% Fibonacci retracement. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 38.2% Fibonacci retracement.

Areas of consideration : 

• H4 time frame, 1st resistance at 32553
• H4 time frame, 1st support at  31753

The accuracy, completeness and timeliness of the information contained on this site cannot be guaranteed. IC Markets does not warranty, guarantee or make any representations, or assume any liability regarding financial results based on the use of the information in the site.

News, views, opinions, recommendations and other information obtained from sources outside of www.icmarkets.com.au, used in this site are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. IC Markets assumes no responsibility for the content of any linked site.

The fact that such links may exist does not indicate approval or endorsement of any material contained on any linked site. IC Markets is not liable for any harm caused by the transmission, through accessing the services or information on this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user’s software, hardware, data or property.

Global Markets:

• Asian Stock Markets : Nikkei up 0.36%, Shanghai Composite up 0.53%, Hang Seng up 2.52%, ASX up 0.28%
• Commodities : Gold at $1825.06 (+0.61%), Silver at $21.61 (+0.28%), Brent Oil at $113.72 (-0.46%), WTI Oil at $111.31 (-0.46%)
• Rates : US 10-year yield at 2.918, UK 10-year yield at 1.735, Germany 10-year yield at 0.940

News & Data:

• (USD) TIC Long-Term Purchases 23.1B vs 105.0B expected
• (GBP) CB Leading Index m/m -0.20% vs 0.10% previous
• (USD) Empire State Manufacturing Index -11.6 vs 15.3 expected
• (CAD) Wholesale Sales m/m 0.30% vs 0.00% expected
• (CAD) Manufacturing Sales m/m 2.50% vs 2.10% expected
• (CAD) Housing Starts 267K vs 250K expected
• (EUR) Trade Balance -17.6B vs 2.3B expected

Markets Update:

Asian stock markets are trading mostly higher on Tuesday, following the mixed cues from Wall Street overnight, fueled largely by strength in materials and energy stocks amid higher commodity prices. Markets are also upbeat on news that Shanghai plans to gradually reopen after spending more than six weeks in lockdown after recent data showed a sharp contraction in Chinese economic activity.

The Japanese stock market is modestly higher in choppy trading on Tuesday, extending the gains in the previous two sessions, with the Nikkei 225 staying below the 26,700 level, following the mixed cues from Wall Street overnight, with strength in materials and energy stocks, even as concerns remain about slowing growth, soaring inflation and prospects of tighter policy moves by global central banks. The Australian stock market is slightly higher in choppy trading on Tuesday, fueled largely by strength in materials and energy stocks amid higher commodity prices. 

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.18 — off levels above 104.5 seen recently. Oil prices were lower in the afternoon of Asia trading hours, with international benchmark Brent crude futures down 0.36% to $113.83 per barrel. U.S. crude futures shed 0.46% to $113.68 per barrel.

Upcoming Events:

• 12:30 PM GMT – (USD) Philly Fed Manufacturing Index
• 12:30 PM GMT – (USD) Unemployment Claims
• 02:00 PM GMT – (USD) Existing Home Sales

What happened in the US session?

Bank of England Governor Bailey stated that 80% of the inflation in the country is due to energy and tradable goods, raising concerns that pay growth would lead to a sustained upward spiral in prices and dismissing the possibility of quantitative tightening under challenging conditions.

What does it mean for the Asia Session?

The highlight of the session is on the RBA minutes. A tone towards policy normalisation would further boost an Aussie recovery against the greenback.

The Dollar Index (DXY)

Key news events today

Core Retail Sales m/m

Retail Sales m/m, 1230 GMT

Fed Chair Powell Speaks, 1800 GMT

What can we expect from DXY today?

ECB’s Williams stated that the inflation is too high, essentially reaffirming the central banks’ path toward an aggressive rate hike path.

Central Bank Notes:

• Confirmed that the committee expects further 50bps hikes to be appropriate; 75bps hikes off the table
• Balance sheet reduction push up to $60b (treasuries) and $35b (MBS) over a three-month timeframe
• Next meeting on 15 June 2022

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

A lower-than-expected UK year-on-year CPI (expected 9.1%, previous 7.0%), to be released on 18 May, would set toppish inflation expectations and additional demand for the precious metal amid the prolonged war in eastern Europe.

Next 24 Hours Bias

Mixed-to-Weak Bearish

The Australian Dollar (AUD)

Key news events today

Monetary Policy Meeting Minutes, 0130 GMT

What can we expect from AUD today?

The minutes are likely to echo a ‘less dovish, more hawkish’ stance of the central bank’s recent higher-than-expected hike of 25bps.

Central Bank Notes:

• Stated that further increases in the cash rate will be required to bring inflation back in line with the target
• Announced passive quantitative tightening by stopping the reinvestment of maturing bonds.  
• Next meeting on 7 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi is likely to follow the directional cues from the Aussie following the release of the RBA’s Monetary Policy Meeting Minutes.

Central Bank Notes:

• Stressed that inflation is a concern and will ensure that higher price pressures don’t become embedded in longer-term inflation expectations
• Stated that more hikes are needed but didn’t increase their neutral rate expectations 
• Next meeting on 25 May 2022

Next 24 Hours Bias

Mixed-to-Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The outcome of the upcoming Japanese preliminary GDP figures is likely to be overshadowed by the BoJ’s ultra-accommodative monetary policy stance.

Central Bank Notes:

• Kept all policy settings unchanged at their April meeting
• Reiterated that rates will stay low for the foreseeable future and won’t hesitate to add stimulus if the economy needs it
• Next meeting on 16 June 2022

Next 24 Hours Bias

Weak Bearish

Global Markets:

• Asian Stock Markets : Nikkei up 0.45%, Shanghai Composite down 0.34%, Hang Seng up 0.12%, ASX up 0.25%
• Commodities : Gold at $1791.18 (-0.94%), Silver at $20.91 (-0.44%), Brent Oil at $109.87 (-1.51%), WTI Oil at $107.25 (-1.27%)
• Rates : US 10-year yield at 2.926, UK 10-year yield at 1.774, Germany 10-year yield at 0.981

News & Data:

• (CNY) Retail Sales y/y -11.10% vs -6.20% expected
• (JPY) PPI y/y 10.00% vs 9.40% expected
• (NZD) BusinessNZ Services Index 51.4 vs 51.5 previous
• (USD) Prelim UoM Inflation Expectations 5.40% vs 5.40% previous
• (USD) Prelim UoM Consumer Sentiment 59.1 vs 64.1 expected
• (USD) Import Prices m/m 0.00% vs 0.60% expected
• (EUR) Industrial Production m/m -1.80% vs -2.10% expected

Markets Update:

Asian stock markets are mixed on Monday in thin holiday trading, following the broadly positive cues from Wall Street on Friday, as traders picked up stocks at a bargain after last week’s sell off amid cautious trading. Traders continue to be concerned about persistent inflation, looming interest rate hikes, Ukraine war and the COVID-19 lockdowns in China.

The Hang Seng index saw volatile swings on Monday, wavering between gains and losses. It was up 0.1% in afternoon trade. Mainland Chinese stocks were lower, with the Shanghai Composite down 0.3% and the Shenzhen Component fell 0.5%. Elsewhere in Asia, Japan’s Nikkei 225 gained 0.5%, while the Topix was last below the flatline. The Kospi in South Korea fell 0.1%, and the Kosdaq was 0.5% higher.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 104.603. Crude oil prices rose sharply Friday, lifting the most active crude futures contracts on fears of supply shortage.

Upcoming Events:

Monday, May 16, 2022

• 02:00 AM GMT – (CNY) Retail Sales y/y
• 9:00 AM GMT – (EUR) EU Economic Forecasts
• 12:30 PM GMT – (USD) Empire State Manufacturing Index
• 02:15 PM GMT – (GBP) Monetary Policy Report Hearings

Tuesday, May 17, 2022

• 01:30 AM GMT – (AUD) Monetary Policy Meeting Minutes
• 12:00 PM GMT – (USD) FOMC Member Bullard Speaks
• 12:30 PM GMT – (USD) Core Retail Sales m/m
• 12:30 PM GMT – (USD) Retail Sales m/m
• 06:00 PM GMT – (USD) Fed Chair Powell Speaks
• 06:30 PM GMT – (USD) FOMC Member Mester Speaks

Wednesday, May 18, 2022

• 01:30 AM GMT – (AUD) Wage Price Index q/q
• 06:00 AM GMT – (GBP) CPI y/y
• 12:30 PM GMT – (CAD) CPI m/m
• 12:30 PM GMT – (CAD) Common CPI y/y
• 12:30 PM GMT – (CAD) Median CPI y/y
• 12:30 PM GMT – (CAD) Trimmed CPI y/y

Thursday, May 19, 2022

• 01:30 AM GMT – (AUD) Employment Change
• 01:30 AM GMT – (AUD) Unemployment Rate
• 02:00 AM GMT – (NZD) Annual Budget Release
• 12:30 PM GMT – (USD) Philly Fed Manufacturing Index
• 12:30 PM GMT – (USD) Unemployment Claims
• 02:00 PM GMT – (USD) Existing Home Sales

Friday, May 20, 2022

• 06:00 AM GMT – (GBP) Retail Sales m/m
• 07:30 AM GMT – (GBP) MPC Member Pill Speaks

What happened across the Asia session?

China’s year-on-year Retail Sales tanked -11.1% (expected -6.2%, previous 3.5%) amid the Covid-19 situation response in the country.

What does it mean for Europe and US Sessions?

The oil demand shock from the world’s largest consumer and importer of oil is reaffirmed by the latest dismal retail sales figure.

The Dollar Index (DXY) Update

Key news events today

No major news events.

What can we expect from DXY today?

The larger-than-expected drop in Consumer Sentiment, a leading indicator of consumer spending which accounts for a majority of overall economic activity, is likely to be adversely reflected in Tuesday’s Retail Sales (expected 1.1%, previous 0.5%).

Central Bank Notes:

• Confirmed that the committee expects further 50bps hikes to be appropriate; 75bps hikes off the table
• Balance sheet reduction push up to $60b (treasuries) and $35b (MBS) over a three-month timeframe
• Next meeting on 15 June 2022

Next 24 Hours Bias

Weak Bullish

Gold (XAU) Update

Key news events today

No major news events. 

What can we expect from Gold today?

Rising global interest rates are likely to overshadow the toppish inflation rates and war in eastern Europe, continuing to add bearish pressure on the precious metal.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

ECB’s de Cos stated that the central bank would likely decide to end its stimulus program in July and raise rates sooner after, albeit gradually

Central Bank Notes:

• Plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. 
• Highlighted risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. 
• Next meeting on 9 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The developing and prolonged war in eastern Europe is likely to start to take its toll on the European continent, even overshadowing the safe-haven demand for the Swiss franc.

Central Bank Notes:

• Kept all policies unchanged as expected, 
• More concerned with the Real Effective Exchange Rate than the nominal. 
• Remains very dovish and in no way expected to change anytime soon. 
• Next meeting on 16 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bearish

The Pound (GBP)

Key news events today

Monetary Policy Report Hearings

What can we expect from GBP today?

UK PM Johnson has reportedly given the green light for a bill on the North Ireland protocol while his colleagues have turned on the Bank of England, accusing the central bank of ‘failing’ in its duties to alleviate sustained inflation in the country.

Central Bank Notes:

• A third of the six members who voted for a hike viewed that the latest increase marked the end of the current hiking cycle
• Peak inflation revised to more than 10%, which added to the stagflation fears; possible GDP contraction in 2023. 
• Quantitative tightening plans to be updated at the August meeting
• Next meeting on 16 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Ahead of Wednesday’s month-on-month Canadian CPI (previous 1.4%), the directional influence on the loonie is dependent on the price of crude amid the backdrop of BoC’s scoff of hikes in excess of 50 bps per turn.

Central Bank Notes:

• Announced a start to passive quantitative tightening from the end of April by ending its reinvestment of maturing bonds. 
• Increased their neutral rate estimate to 2.5% from 2.25%. 
• Next meeting on 1 June 2022

Next 24 Hours Bias

Mixed-to-Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

The North Oil Company, an Iraqi state-run entity, stated that some of its oil wells are taken by Kurdish armed forces. The second-largest producer in the OPEC exported $11.07 billion of oil in March, the highest level in 50 years.

Next 24 Hours Bias

Mixed-to-Weak Bullish