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Russian bombs destroyed Ukraine’s Dnipro airport and the infrastructure around it. The news impacted investor risk appetite and sent the US dollar index higher this morning.
Saudi Arabia’s industrial production in grew 22.3% year-on-year in February, representing a sharp acceleration from the 11.1% rise in the previous month. This being the tenth consecutive month of growth in industrial output and the strongest growth since December 1973, sent the Saudi Riyal slightly higher versus its major peers in forex trading this morning.
China’s auto sales declined by 11% year-on-year to 2.25 million units in March, versus 18.7% growth in the prior month. This being the first decline in three months, exerted pressure on the CNY/USD forex pair.
Russia’s CPI (consumer price index) rose to 7.60% in March, accelerating sharply from the 1.2% reported for the previous month. The RUB/USD declined in forex trading this morning.
The US Baker Hughes report indicated that the total active rig count, including those drilling for natural gas, rose by 16 to 689 in the week ending April. This being the highest count since the week of March 27, 2020 sent the WTI crude prices lower.
What’s happening: US stocks ended last week in the red, despite the Dow Jones index climbing 100 points.
What happened: The S&P 500 and Nasdaq 100 closed the week with losses, after three straight weeks of gains.
Investor risk appetite was hurt by the changing tone of Federal Reserve policymakers.
Why it matters: All three major US indices declined for the week, as investors braced for prospects of a tighter monetary policy as part of the Federal Reserve’s attempts to fight inflation even more aggressively.
The S&P 500 and Nasdaq 100 pulled back on Friday, as the yield on the 10-year US Treasury note rose above 2.7%, signalling market expectations of aggressive rate hikes by the Federal Reserve.
Investor sentiment was also hurt by news of a rocket strike on a railway station in Kramatorsk in the eastern part of Ukraine leaving 30 dead and around 100 injured.
The Dow Jones index added 137.55 points, or 0.4%, to close at 34,721.12 on Friday, but ended the week down 0.28%. The S&P 500 shed 0.27% to reach 4,488.28, while the Nasdaq 100 fell 1.34% to settle at 13,711.00. The S&P 500 and Nasdaq 100 recorded weekly losses of 1.27% and 3.86%, respectively.
What to watch: Analysts said stock prices have already priced in the Fed’s moves and investors are likely to wait on the sidelines from here till the next announcement by the central bank.
Markets will look keep an eye on speeches by Cleveland Federal Reserve Governor Michelle Bowman and Atlanta Fed president Raphael Bostic.
Context: The EUR/USD forex pair tanked as low as 1.0837 in intraday trading before rebounding on Sunday, remaining highly volatile ahead of the first-round French presidential vote.
Details: Emmanuel Macron won the first round of the French election and will be up against Marine Le Pen, for the presidency for a second time.
As of 0300 GMT, around 97% of the votes had been counted, with Emmanuel Macron getting 27.35% of them, while Marine Le Pen and Jean-Luc Mélenchon had 23.97% and 21.7%, respectively. This is far short of the majority needed by any presidential candidate to avoid a run-off. Opinion polls suggest a tight race between French President Emmanuel Macron and far-right leader Marine Le Pen during the run-off between the top two candidates on April 24, 2022.
The EUR/USD forex pair may decline by around 1.5% if Le Pen ultimately is elected and may “continue falling,” analysts at Wells Fargo said in a note to clients.
The euro has recently been under pressure by ECB officials not committing to move as aggressively as the US Federal Reserve to hike interest rates, despite soaring inflation.
The EUR/USD forex pair fell around 0.2% to close at 1.0876 on Friday.
What to watch:Investors will keep an eye on the French elections and any updates from ECB policymakers around monetary policy tightening. Markets will also monitor the rising covid-19 cases in Europe.
Other Markets: European indices closed higher on Friday, with the FTSE 100, DAX, CAC 40 and Stoxx 600 up by 1.56%, 1.46%, 1.34% and 1.31%, respectively.
|Technical Levels||News Sentiment|
|AUD/USD – 6907 and 7270||Negative|
|EUR/GBP – 8117 and 8471||Negative|
|Gold – 1829 and 1903||Negative|
|WTI Crude – 85.41 and 100.54||Positive|
|S&P500 – 29856 and 35033||Positive|
Turkey’s unemployment rate and current account, Mexico’s industrial production, South Africa’s manufacturing production, Brazil’s focus market readout, current account and foreign direct investment, UK’s NIESR monthly GDP tracker for March, France’s 3-month, 6-month and 12-month BTF auction, Russia’s balance of trade, current account, foreign exchange reserves and GDP as well as US’s consumer inflation expectations, 3-month and 6-month bill auction.
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