Last session market review
On Tuesday, the dollar fell and then rose before ending down at 100.01, while international spot gold ended up 1702.10 in volatile trading. A day before federal reserve chairman colin Powell spoke on the economy, market sentiment turned cautious and investors weighed the possibility of negative U.S. interest rates.
On Wednesday, focus on fed chairman colin Powell’s speech, the U.S. PPI and the New Zealand federal reserve rate decision.
Fx: euro/dollar at 1.0846; Sterling/dollar closed at 1.2259; The Australian dollar closed at 0.6473 against the U.S. dollar. The dollar was at 107.10 yen; Us dollar/Canadian dollar at 1.4073; The dollar was at 0.9693 Swiss francs.
Commodities: spot gold closed at $1702.04 an ounce; Comex gold ended at $1,706.80 an ounce. Spot silver settled at $15.43 an ounce; Comex silver futures closed at $15.709 an ounce; Brent crude closed at $29.98 a barrel; NYMEX crude settled at $25.78 a barrel.
In the currency market
Euro: as the dollar turned lower, the euro/dollar turned higher to close at 1.0846, up 0.37%. On the technical level, the pivot point of the currency pair is at 1.0839, the initial resistance to the upward movement of the exchange rate is at 1.0893, the further resistance is at 1.0939, and the key resistance is at 1.0994. The initial support for the fall in the exchange rate is at 1.0793, further support at 1.0738, more key support at 1.0692.
Sterling: the pound fell for a second day, or 0.59%, to close at 1.2259. On the technical level, the pivot point of the currency pair is at 1.2295, the initial resistance to the upward movement of the exchange rate is at 1.2341, the further resistance is at 1.2424, and the key resistance is at 1.2470. The initial support for the fall in the exchange rate is at 1.2212, further support at 1.2166, more critical support at 1.2083.
Yen: the dollar fell for the first time in four days to close at 107.10, down 0.52%. On the technical level, the pivot point of the currency pair is at 107.30, the initial resistance to the upward movement of the exchange rate is at 107.51, the further resistance is at 107.90, and the key resistance is at 108.11. The initial support for the decline of the exchange rate is at 106.91, further support is at 106.71, more critical support is at 106.32.
The stock market
U.S. and European stocks: U.S. stocks fell across the board Tuesday, giving up some of their recent strong gains, as investors assessed the states’ latest efforts to restart their economies. The dow Jones industrial average closed down 457.21 points, or 1.9%, at 23,764.78. The s&p 500 fell 2.1% to 2870.12. The nasdaq composite index fell more than 2% to 9,002.55. Tuesday’s drop ended a six-session winning streak for the nasdaq.
European stocks ended mixed on Tuesday after a recent surge in covid-19 cases in countries that have eased lockdowns and investors worried that a premature economic restart could lead to a second wave of covid-19. The pan-european stoxx 600 index closed up 0.96 points, or 0.28%, at 340.66. Germany’s DAX index closed down 8.19 points, or 0.08 percent, at 10,816.80. Britain’s ftse 100 index closed up 49.74 points, or 0.84 per cent, at 5989.47. France’s cac-40 index closed down 17.72 points, or 0.40 percent, at 4,472.50. Spain’s IBEX35 index closed up 89.80 points, or 1.35 percent, at 6,762.00. Italy’s ftse closed up 176.14 points, or 1.01%, at 17557.50. The stoxx Europe 50 index closed down 0.20 point, or 0.01 percent, at 2883.55.
The bond market
On the bond side, U.S. Treasury yields held steady on Tuesday as investors digested weak inflation data and focused on measures to restart the economy: the benchmark 10-year note yield fell about 1 basis point to 0.711%, while the 30-year yield edged down to 1.417%. The Treasury Department will auction $32 billion in 10-year notes later Tuesday.
The international spot gold price rose as high as $1710.60 to $1,695.40 in early trading on Tuesday, and fell as low as $1,692.20 to close at $1,702.04, up $6.22, or 0.37%.
COMEX June gold futures closed 0.5 percent higher at $1,706.80 an ounce.
Oil prices closed higher on Tuesday (May 12) after a series of announcements that encouraged bullish investors: U.S. WTI crude for June delivery rose $1.64, or 6.8 percent, to $25.78 a barrel. It hit an intraday high of $26.23 a barrel in June as the united Arab emirates and Kuwait pledged to cut output by a combined 180,000 b/d. WTI rose 25 percent last week; Brent crude for July delivery rose 35 cents, or 1.2 percent, to $29.98 a barrel after hitting an intraday high of $30.69 a barrel.