- Stocks are more than halfway through the week and major indices are higher
- Russia says opening two sea corridors from Ukraine ports
- FOMC meeting minutes for May 2022: inflation risks are skewed to the upside
- US treasury sells $48 billion of 5 year notes at a high yield of 2.736%
- Feds Brainard: Fed is talking strong actions to bring inflation down
- Kansas City Fed Pres. Esther George to retire in January 2023
- Exxon says refining shortages are due to closures during the pandemic
- European major indices close higher on the day
- Atlanta Fed GDPNow falls to 1.8% from 2.4% last
- US weekly oil inventories -1.019M vs. expectations of -0.737M
- Axios: White House senior advisors are on a secret visit to Saudi Arabia
- Toll Brothers says cancellation rates remain low in May
- US April durable goods 0.4% vs. 0.6% expected
- The USD is the strongest and the AUD is the weakest as NA traders enter for the day
- Dollar Extends Drop, Kiwi Stable into RBNZ, Yen Outperforms
- ForexLive European FX news wrap: Dollar regains some ground as risk slips
- ECB's Knot: Inflation expectations are at the upper limit of being well-anchored
- US MBA mortgage applications w.e. 20 May -1.2% vs -11.0% prior
- ECB's Knot: We will have a large balance sheet for some time to come
The FOMC meeting minutes from the May 4th 50 basis point rate tightening was released. The Fed said:
- Fed should expeditiously move monetary policy toward a more neutral stance
- A restrictive policy may become appropriate
- Officials emphasize that they were highly attentive to inflation risks which were skewed to the upside
- Price pressures remain elevated and it was too early to be confident that inflation at peak
The details from the minutes added:
- The US economy was very strong with the labor market extremely tight and inflation very high
- Members all Ukraine conflict and China Covid lockdowns posing heightened risks
- Most officials backed 50 basis point rate hikes at the next couple of meetings
Although the minutes were pretty much as expected, the stock market did breathed a sigh of relief and that helped to lower the dollar on some risk off flows. Holding some technical levels also helped in the currency markets:
- EURUSD: The EURUSD found support buyers against its rising 100 hour moving average on 2 separate tests today. The 100 hour moving average is currently at 1.0645. That is now above the 50% midpoint of the move down from the April 21 high at 1.0642 and also above a swing area between 1.06336 and 1.0641. The current price is trading at 1.0678 into the close with the upside targets between 1.0696 1.07061 and the 61.8% retracement of the same April 21 move down at 1.07113.
- GBPUSD: The GBPUSD moved below its 100 hour moving average in the London morning session, but recovered above that moving average level later in the US morning session. Traders leaned against that moving average on 2 separate occasions in the US session before rising toward the end of the day. The 100 hour moving average comes in at 1.25236. The current price is at 1.2581. Getting above the high price from Monday at 1.2600 and the high price from Tuesday 1.2598 would open the door for further upside momentum in the new trading day.
- USDJPY: The USDJPY moved up to test its 100 hour moving average currently at 127.50 and found sellers against that moving average. Recall from yesterday the same moving average also stalled the rally (albeit at a higher level). The 100 hour moving average will continue to remain as resistance into the new trading day (at 127.50). The current price is trading at 127.29. On the downside moving below the 127.00 level would give sellers more confidence toward a run toward the 50% midpoint of the move up from the April 5 low at 126.324.
- NZDUSD: The NZDUSD retraced most of the gains after the RBNZ rate decision in the New York session, but found support buyers just ahead of its rising 100 hour moving average currently at 0.6438. The price found buyers against that level and push the price up to a New York session high of 0.6484 before rotating modestly to the downside into the close at 0.64737. On the topside getting above last Friday's highs near 0.6490, would next target the high price from the post rate decision up to 0.65135.
- USDCAD. The USDCAD is closing right around its 100 hour moving average at 1.28135 after trading above and below it over the last 3 hours of the trading day.
The strongest of the major currencies was the GBP followed by the NZD. The weakest was the EUR and JPY. Th him e US dollar was marginally higher/mixed.
In other markets today:
- spot gold fell $-14 or -0.75% at $1852.30
- spot silver fell $0.15 or -0.68% at $21.93
- WTI crude oil rose $0.94 to $110.71
- Bitcoin moved up toward the $30,000 level but backed off to $29,739 currently
In the US debt market yields were little changed.
Finally in the US stock market major indices moved higher and hopes for a weekly gain on still on track. Although after close earnings from Nvidia and Snowflake may put the kibosh on that idea. Nevertheless for the day:
- Dow industrial average rose 191.66 points or 0.6% to 32120.29. It closed at 31261.91 on Friday
- S&P index rose 37.25 points or 0.95% to 3978.74. It closed at 3901.35 on Friday
- NASDAQ index rose 170.30 points or 1.51% to 11434.75. It closed at 11354.62 on Friday
