Daily Market Analysis from ForexMart

[KostiaForexMart]

Trading Signals for GOLD (XAU/USD) for April 16-18, 2024: sell below $2,390 (21 SMA - 61.8% Fibonacci)

Yesterday during the American session, gold reached a low of 2,325, the level that coincided with the 200 EMA and from that area, it gained a strong bullish momentum, jumping by more than $50 in less than 24 hours.

From the all-time high at 2,431 to the April 15 low (2,324), gold has retraced the 61.8% Fibonacci which coincides around 2,390.

If gold trades below 2,392 in the next few hours, we could look for opportunities to sell with the target at 2,364 (21 SMA). With a consolidation below the 21 SMA, we could expect a further bearish move and gold could fall to the 200 EMA at 2,331.

In case gold continues to rise, the bearish outlook will be invalidated and we could look for opportunities to buy above the psychological level of 2,400. If this scenario occurs and gold consolidates above 2,396, the price is likely to reach 2,410 and could finally reach 2,435 (7/8 Murray).

Technically, the eagle indicator is giving a negative signal and there will likely be a technical correction in the next few hours, so we will look to sell below 2,392 with the target at 2,330.

 

[KostiaForexMart]

Hot forecast for EUR/USD on April 18, 2024

In the absence of economic reports or other news that could affect the market, investors finally paid attention to the dollar's overbought condition. So, there was nothing to prevent the local correction, which, by the way, is still far from over. The market imbalances, although reduced, have not disappeared altogether. And except for the data on unemployment claims in the United States, today's economic calendar is empty. And with the US dollar still overbought, these reports are not particularly important. Moreover, claims are expected to increase by 4,000, and that's incredibly small. So we can basically say that nothing will change. Such minor changes are not capable of influencing investor sentiment. In other words, the pair will likely correct higher on Thursday.

The EUR/USD pair has started a long-awaited corrective movement. The support level at 1.0600 played a role, which the quote recently approached.

The RSI has left the oversold zone on the 4-hour chart, and it has upwardly crossed the 50 moving average. This indicates an increase in the volume of long positions in the euro.

On the same time frame, two out of three of the Alligator's MAs are intertwined, corresponding to a sign of a slowdown in the downtrend cycle.

Outlook
Considering the extent of the euro's weakness, we can assume that there is still room for more movement. For this reason, the pair is expected to rise to the level of 1.0700.

Complex indicator analysis indicates a downward cycle in the short- and long-term timeframes.

More analytics on our website: bit.ly/3VobLUv

 

[KostiaForexMart]

Gold edges lower as Middle East tensions ease

The yellow metal continues to decline, plunging investors into gloom and prompting them to reassess their trading strategies. However, some analysts are confident that the precious metal will rebound in the near future, viewing its decline as a natural step before another rally. The optimism of experts bolsters investors, although some market players remain skeptical about the near-term prospects of gold.

On Monday, April 22, the precious metal sharply fell amid reduced geopolitical risks and decreased demand for safe-haven assets. As a result, gold lost more than 2.7%. According to estimates, gold's decline at the end of the day was the most significant since June 2022.

The metal depreciated amid easing tensions in the Middle East. Such a development reduced the risk premium in the market. At the moment, gold continues to trade downwards after the sharpest decline in two years.

The catalyst for the current downtrend in the precious metal was the de-escalation of the conflict between Israel and Iran. Against this backdrop, many experts are pessimistic about the near-term prospects of gold. They believe that investors will turn to other sources of capital preservation. According to some specialists, prices for the precious metal may break below the $2,300 per ounce level and then plummet to $2,200 per ounce. Analysts recommend preparing for a significant decline in the yellow metal amid extremely overbought conditions, as indicated by the RSI on the daily chart.

Currency strategists at ABN AMRO Bank have maintained their forecast, according to which gold will lose heavy losses, diving to $2,000 per ounce by the end of 2024. The bank's specialists cite excessively high current prices, dollar strengthening, liquidation of assets in gold ETFs, and the absence of a physical gold shortage in the global market as reasons.

The current drop in the yellow metal (by more than 2.7%) is considered by experts to be the most significant in the last two years. Gold futures quotes on the New York Comex exchange plummeted to $2,346.4 per ounce at the end of Monday's trading, reaching the lowest level since April 5, 2024. On Tuesday, April 23, the precious metal declined by 0.85% and then fell by another 1.3%. Currently, gold is trading at the level of $2,316.45 per ounce.

The precious metal was also weighed down by the high likelihood that the Federal Reserve would maintain a tight monetary policy much longer than expected in early 2024. The focus of market attention is on the publication of the key inflation indicator in the United States - the Core Personal Consumption Expenditures Price Index, which the regulator pays special attention to when assessing risks. The release of this report is scheduled for Friday, April 26. According to preliminary forecasts, the indicator decreased to 2.6% year-on-year in March. Recall that its February value was 2.8% year-on-year.

Many investors are counting on some easing of geopolitical tensions. At the same time, market participants are switching to riskier assets such as stocks. According to CFTC data, the volume of major market players' long positions in gold futures and options is at a four-year high. The reason for profit-taking was the fairly rapid decline in the value of the precious metal. In addition, in recent months, gold has appreciated despite a steep rally in the greenback. In the current situation, the risks of a deep correction in the precious metal are increasing.

However, according to some analysts, there are favorable factors contributing to further gans in gold. Tailwinds for the yellow metal will be the US Federal Reserve's rate cuts, global instability, and the growing US government debt. Against this backdrop, even economists at Bank of America, who are skeptical about the prospects of the precious metal, expect its price to rise to $3,000 by 2025. Analysts at Citi Bank are also bullish on gold, expecting it to gain in the next 6–18 months. Many investors adhere to this position, asserting that the likely record of $3,000 per ounce will be surpassed in a couple of years.

Improvement in forecasts for gold prices in 2024 boosts investor optimism. It is worth noting that these forecasts anticipate an increase in the value of the metal in the near future. Confidence in such a scenario allows market players to weather the current market woes and prepare for an upcoming rise in gold.

More analytics on our website: bit.ly/3VobLUv

 

[KostiaForexMart]

Weekly forecast based on simplified wave analysis of EUR/USD, USD/JPY, GBP/JPY, USD/CAD, NZD/USD, and Gold on May 6th

EUR/USD

Analysis:
The weekly chart scale of the major European currency pair shows that the dominant descending wave of recent months is nearing completion. The wave structure appears to be formed. The unfinished segment in the upward direction dates back to April 16.

Forecast:
We expect to see a general sideways movement in the euro's price in the upcoming week. One should expect an increase towards the calculated resistance zone in the coming days. Subsequently, there is a high probability of transitioning into a drift, followed by a further price decline. The greatest volatility is expected towards the end of the week.

Potential reversal zones

Resistance:
1.0870/1.0920
Support:
1.0620/1.0570

Recommendations:
Buying: Small volume purchases within the "intraday" framework can be profitable for the deposit.
Selling: Without confirmed reversal signals near the resistance zone, conditions for such transactions do not exist.

USD/JPY

Analysis:
Over the past year, the dominant upward wave of the main Japanese yen pair has been completed. The descending wave zigzag initiated on April 29 possesses reversal potential. Its structure began forming the middle part (B) at the end of last week. Quotes reached the lower boundary of the potential reversal zone on the H4 timeframe.

Forecast:
At the beginning of the upcoming week, there is a high probability of price movement within the corridor between the nearest counter zones. A transition to sideways drift is expected after possible pressure on the support zone. Towards the end of the week, one can expect a resumption of price growth towards the resistance boundaries.

Potential reversal zones
Resistance:
154.70/155.20
Support:
151.60/151.10

Recommendations:
Selling: Carries increased risk and may lead to losses for your deposit. Refraining from trading until the upcoming upward correction is completed is optimal.
Buying: Becomes possible after the appearance of reversal signals from your trading systems near the resistance zone.

GBP/JPY

Analysis:
The direction of movement of the British pound/Japanese yen pair since the end of September 2022 is determined by an ascending wave. On the weekly timeframe, it completes a larger ascending wave structure. The descending segment since April 29 possesses reversal potential and may mark the beginning of a correction of the main wave.

Forecast:
In the coming days, the flat character of the movement is expected to continue. A short-term increase in quotes to the resistance zone is not excluded. In the following days, an increase in volatility, a reversal, and a resumption of price decline are expected. A brief breach of the upper resistance boundary is possible upon course change.

Potential reversal zones
Resistance:
193.80/194.30
Support:
188.70/188.20

Recommendations:
Buying: It is suggested that the main attention be devoted to finding buy signals near the support zone.
Selling: It may become risky and not recommended in the coming days.

USD/CAD

Analysis:
The direction of movement of the Canadian dollar in the main pair since the end of December last year is determined by an ascending wave. The price has reached the boundaries of the wide potential reversal zone in the weekly timeframe. Since the middle of last month, pair quotes have predominantly moved sideways, forming a correction. The wave structure needs to be completed.

Forecast:
The most probable scenario for price movement in the coming days will be a gradual shifting sideways between the nearest counter zones. After a bounce in price towards the upper boundary of the channel, a decline in quotes towards the support area is expected.

Potential reversal zones
Resistance:
1.3730/1.3780
Support:
1.3580/1.3530

Recommendations:
Buying: High risk and may lead to losses.
Selling: Fractional volumes may be used within individual trading sessions.

NZD/USD

Brief analysis:
The unfinished wave structure of the New Zealand dollar chart is directed southward. It dates back to the end of December last year. The middle part (B) continues to form within the wave structure, resembling a horizontal plane. The resistance boundary runs along the lower boundary of a strong potential reversal zone of the large timeframe.

Weekly forecast:
During the upcoming week, gradual movement towards the resistance zone is expected. After reaching the calculated resistance zone, there is a high probability of a downward correction to the support zone.

Potential reversal zones
Resistance:
0.6100/0.6150
Support:
0.5970/0.5920

Recommendations:
Buying: Has limited potential and may be used for scalping.
Selling: After confirmed reversal signals appear near the support zone, it may become the main direction for trading this pair.

Gold

Analysis:
In the gold chart, the direction of short-term trends over the past year is determined by an ascending wave algorithm. Since mid-April, the wave has been correcting, forming an elongated plane. At the time of analysis, it does not appear complete, moving sideways flat along the calculated support zone.

Forecast:
In the coming days, the pair's price should complete the movement's correction phase. A subsequent reversal and price increase towards the resistance zone can be expected by the end of the upcoming week. Breaking out of the indicated price corridor is possible but unlikely.

Potential reversal zones
Resistance:
2360.0/2375.0
Support:
2290.0/2275.0

Recommendations:
Buying: Becomes possible after suitable signals appear near the support zone.
Selling: Conditions for such transactions will arise after confirmed signals appear near the resistance zone.

 

[KostiaForexMart]

Growth continues: Wall Street in green for third day in a row

American stock indices ended trading higher on Monday, marking their third consecutive positive session. Investors are once again raising hopes that the Federal Reserve may cut interest rates this year.

Global stock indicators also rose amid optimism about a likely rate cut. At the same time, the Japanese yen weakened against the dollar after a sharp rise last week associated with the proposed currency intervention.

Expectations for US central bank rate cuts fell during the year due to more persistent inflation. Some investors began to fear that a rate cut would not materialize at all, sending markets tumbling in April.

However, Friday's data showed that U.S. job growth slowed more than expected in April. That eased pressure on the Federal Reserve, making it less likely that rates would remain high for long. Combined with an unexpectedly positive corporate earnings season, this has given investors fresh momentum in recent sessions.

Last week, the Fed signaled it was willing to consider cutting interest rates but wanted to make sure inflation was falling sustainably before making that decision. Fed officials repeated that statement Monday.

Richmond Fed President Thomas Barkin said the current level of interest rates should slow the economy enough to bring inflation back to the central bank's 2% target. However, a strong labor market provides time to wait.

Traders now expect the Fed to cut rates by 46 basis points by the end of 2024, with the first cut forecast in September or November, according to rate probability app LSEG.

Stocks on both sides of the Atlantic, as well as in Asia, rose. The US labor market report on Friday was softer than expected, leading to renewed bets that the Federal Reserve will ease monetary policy as early as September.

The dollar index, which measures the US currency's exchange rate against six major trading partners, fell for the fourth session in a row. It comes after Friday's data showed the weakest job growth since October, allaying fears that the Fed could raise rates again.

However, the outlook for inflation remains uncertain as the market hopes interest rates will be restrictive enough to slow the economy and reduce the rate of price increases, Conger said.

The Dow Jones Industrial Average rose 176.59 points, or 0.46%, to 38,852.27. The S&P 500 added 52.95 points, or 1.03%, to 5,180.74. The Nasdaq Composite Index rose 192.92 points, or 1.19%, to 16,349.25.

Most sectors of the S&P 500 index ended trading on a positive note. The energy sector was one of the top gainers, thanks in part to U.S. natural gas futures hitting their highest level in 14 weeks.

Chipmaker shares were broadly higher on Monday, including Arm Holdings, which added 5.2% ahead of this week's earnings release.

Micron Technology (MU.O) shares rose 4.7% after Baird upgraded the stock. Advanced Micro Devices (AMD.O) and Super Micro Computer (SMCI.O) also rose 3.4% and 6.1%, respectively, regaining ground lost after last week's disappointing earnings.

Paramount Global (PARA.O) shares rose 3.1% after exclusive talks with Skydance Media ended without a deal, allowing a special committee to consider offers from other bidders.

Tyson Foods (TSN.N) shares fell 5.7% despite beating Wall Street's second-quarter profit expectations as the company warned of pressure on consumers from persistent inflation.

At the same time, shares of Spirit Airlines (SAVE.N) fell 9.7% to a record low after weak guidance for second-quarter earnings.

The S&P 500 posted 29 new 52-week highs and 2 new lows, while the Nasdaq recorded 150 new highs and 54 new lows.

In Europe, the cross-regional STOXX 600 index (.STOXX) rose 0.53%. It comes amid signs the European Central Bank is confident of cutting rates as euro zone inflation continues to slow, three ECB policy makers said.

Philip Lane, Gediminas Simkus and Boris Vujicic said inflation and growth data supported their belief that eurozone inflation, which stood at 2.4% in April, would fall to the central bank's 2% target by the middle of next year. of the year.

The MSCI World Shares Index (.MIWD00000PUS) rose 0.50% to close at 1,066.73, its highest level since June 2022. Markets in the UK and Japan were closed due to holidays.

The dollar index was down 0.07% at 105.10, lifting the euro 0.07% to $1.0766.

Goldman Sachs raised its 2024 earnings per share growth forecast for companies in the STOXX 600 Index (.STOXX) to 6% from 3%. The bank noted that a 10% annual rise in Brent oil prices adds about 2.5 percentage points to annual earnings per share growth, and a 10% decline in the euro/dollar exchange rate adds about the same.

Treasury yields fell as investors weighed in on sluggish job creation last week, bolstering views that the U.S. economy is not overheated and will not be hampered by rate cuts.

The yield on the 10-year U.S. Treasury note fell 1.3 basis points to 4.487% from 4.5% late Friday.

Traders now expect the Fed to cut rates by 43 basis points by year-end, with the first cut likely to come in September, according to rate probability app LSEG. Traders have cut their expectations to one cut in recent weeks due to signs of persistent inflation.

Oil prices rose after Saudi Arabia raised June crude oil prices for most regions. In addition, the unlikely prospect of a quick ceasefire in the Gaza Strip has revived fears of renewed fighting between Hamas and Israeli forces.

U.S. crude rose 37 cents to $78.48 a barrel and Brent crude rose 37 cents to $83.33 a barrel.

MSCI's index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) hit its highest level since February 2023, adding 0.66%, while the blue-chip China index (.CSI300) rose 1.5%.

Hong Kong's Hang Seng Index (.HSI) rose 4.7% last week, posting its longest daily winning streak since 2018. The index closed 0.55% higher on Monday.

Elsewhere, traders remain wary of potential yen volatility following past suspicions that Japanese authorities would intervene to stem the currency's sharp decline.

Tokyo is believed to have spent more than 9 trillion yen ($59 billion) to prop up its currency last week, pushing the yen from a 34-year low of 160.245 to about a one-month high of 151.86 per dollar, according to the Bank of Japan. within a week.

On Monday, the yen gave up some of its ground and was last trading at 153.95 per dollar, representing a decline of 0.63%.

Gold prices rose amid a weakening dollar. US gold futures for June delivery rose 0.9% to $2,331.20 an ounce.

Bitcoin added 0.65% to $63,343.00, while Ethereum was down 1.2% to $3,077.3.

 

[KostiaForexMart]

Trading Signals for GOLD (XAU/USD) for May 8-10, 2024: buy above $2,312 (21 SMA - symmetrical triangle)

Early in the European session, gold is trading around 2,310.68 forming a bearish bullish pennant pattern on the H4 chart.

Gold has been trading within a symmetrical triangle pattern formed since April 12. We believe that if there is a sharp break above 2,312 and consolidation above this area on the daily chart, gold could continue its rise and could reach 6/ 8 Murray at 2,375 and finally, 7/8 Murray around 2,437.

On April 18, gold left a GAP at about 2,392. If an upward movement occurs in the next few days and if gold consolidates above 2,375, the instrument could cover this GAP and even reach the psychological level of 2,400.

On the contrary, if gold falls and consolidates below the 21 SMA located at 2,312 and below 5/8 Murray, we could expect it to reach the 200 EMA located at 2,295. The price could reach the bottom of the symmetrical triangle pattern around of 2,270.

Since the beginning of May, the eagle indicator has been showing a positive signal and we believe that an upward movement in gold could occur in the coming days. For this scenario to be confirmed, we must wait for the double break of the bullish flag and symmetrical triangle pattern.

If this scenario comes true, it will be seen as an opportunity to buy. On the contrary, we could continue selling below 2,310.

 

[KostiaForexMart]

Trading Signals for XAU/USD (GOLD) for May 14-16, 2024: buy above $2,342 (21 SMA - rebound)

Gold is trading around 2,343, around the 21 SMA, and within the uptrend channel forming since early May. Gold, after a strong technical correction below 2,375, found a bottom around 2,330 which gave it an opportunity to recover.

The H4 chart shows that gold could resume its bullish cycle if it consolidates above 2,340 or 2,330 in the coming days.

If gold keeps its uptrend channel intact, a technical bounce around 2,330 would be a key point to buy with targets at 2,375 and 2,392. At this level, gold left a GAP on April 18 and the price is likely to reach this area so the GAP will be covered in the next few days.

If gold breaks and consolidates below 2,330, the outlook could be negative and we could expect a change in trend. Therefore, gold could reach 5/8 Murray located at 2,312 and the 200 EMA located at 2,301.

We believe that in the next few hours, gold could gain momentum and we can look for opportunities to buy, only if it settles above 2,330. Any pullback in the price will be seen as an opportunity to buy with targets at 2,355, 2,375, and 2,392.

On May 10, the eagle indicator reached the oversold zone and we believe that gold could resume its bullish cycle as we see a relief in the bearish pressure so that gold could continue to rise.

 

[KostiaForexMart]

Powell reassures investors: Nasdaq closes at record high, with focus on price index

The Nasdaq hit a new all-time high on Tuesday amid the close, while the S&P 500 and Dow also posted gains as comments from Federal Reserve Chairman Jerome Powell reassured investors ahead of a major consumer inflation report expected on Wednesday.

Producer prices in the US rose more than expected in April, especially due to significant increases in prices for services and goods, which forced investors to reconsider expectations for a reduction in interest rates in September.

However, speaking on Tuesday, Powell characterized the latest PPI data as mixed rather than an indication that the economy is warming, taking into account downward revisions to data from the previous period as well.

Powell's comment that he doesn't expect any near-term interest rate hikes despite recent data on high inflation also added to investor optimism.

"The market is now more confident in high rates over the long term. Much of the discussion has centered on the possibility of rate hikes, and Powell emphasized that this is not currently on the table," said Lindsey Bell, chief strategist at Charlotte, North Carolina-based 248 Ventures. She also noted that the rise in stocks was observed against the backdrop of falling Treasury yields.

"The bond market seems to be adapting and the stock market is responding to the bond market," Bell added.

However, ahead of Wednesday, investors were cautiously awaiting consumer price index data to see whether the surprise growth recorded in the first quarter and April would continue.

Persistent inflation and a stable labor market have prompted a revision of expectations for the Federal Reserve's initial rate cut from March to September.

However, the stock market has posted strong gains this year on the back of strong, better-than-expected quarterly earnings and the prospect of a possible rate cut by the Federal Reserve.

While the tech-heavy Nasdaq index made a strong run to its record set on April 11, the S&P 500 ended the trading day 0.1% below its closing high on March 28. Likewise, the Dow Jones closed at less than 1% of its record high, also reached on March 28.

The Dow Jones Industrial Average rose 126.60 points, or 0.32%, to 39,558.11. The S&P 500 added 25.26 points, or 0.48%, to 5,246.68, while the Nasdaq Composite rose 122.94 points, or 0.75%, to 16,511.18.

Among the 11 key industrial sectors in the S&P index, consumer staples posted the biggest decline, losing 0.2%, while the technology sector led gains, adding 0.9%.

Alphabet (GOOGL.O) shares rose 0.7% after Google showed off innovations in its use of artificial intelligence, including an update to its Gemini chatbot and improvements to its search engine.

Home Depot (HD.N) shares closed down 0.1% after falling more than 2% on the day. The decline followed the retailer's quarterly report, which showed an unexpected decline in same-store sales as consumers switched to smaller home projects and cut spending on big-ticket items.

Alibaba's US-traded shares fell 6% after announcing an 86% drop in fourth-quarter profit.

Shares of athletic footwear maker On Holding jumped 18.3% after the company raised its full-year sales forecast ahead of quarterly expectations thanks to strong demand for its sneakers.

US President Joe Biden has announced steep tariff increases on imports of a range of Chinese goods, including electric vehicles, computer chips and medical products.

Shares of Chinese electric vehicle maker Li Auto, also listed in the U.S., fell more than 2%, while shares of Tesla (TSLA.O) rose more than 3%.

AMC Entertainment (AMC.N) shares soared nearly 32% to $6.85, while Koss Corp (KOSS.O) shares rose 40.7% to $6.15, among other stocks popular during the 2021 meme rally. year and shares in a short position.

On the New York Stock Exchange (NYSE), AMC and GameStop were the most actively traded stocks, with advancers outnumbering decliners 2.43 to 1, with 358 new highs and 31 new lows.

Asian stock markets were higher on Wednesday, while the US dollar weakened as investors digested mixed US producer price data and awaited a key consumer price report that could have a significant impact on the Federal Reserve's near-term monetary policy.

MSCI's broad index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.38% to hit a new 15-month high during the trading session. Japan's Nikkei (.N225) rose 0.58%.

The latest data showed U.S. producer prices rose more than expected in April, indicating persistent inflation at the start of the second quarter.

Shares of GameStop (GME.N) and AMC (AMC.N), popular among retail investors, jumped significantly after messages from Keith Gill, known as "Growling Kitten", leading to discussions about the possible return of a key figure of the 2021 meme rally.

In the Chinese market, stocks started the day lower, with the blue-chip index .CSI300 down 0.16% and the Hang Seng Index .HSI in Hong Kong down 0.22%.

US President Joe Biden announced significant tariff hikes on some Chinese imports, including electric vehicles, computer chips and medical products.

In currency markets, the dollar continued to slide as investors held back action ahead of consumer price index data, while the euro neared its one-month high, last trading at $1.0817.

The US Dollar Index, which measures the value of the US currency against a basket of six major currencies, was seen at 105.01. The yen traded at 156.36 per dollar, having hit a two-week low of 156.80 on Tuesday, raising fears of new currency interventions by Japanese regulators.

On April 29, the yen fell to a 34-year low of 160.245 per dollar, followed by aggressive yen buying that traders and analysts speculated was carried out by the Bank of Japan and the Japanese Ministry of Finance.

Commodity prices rose in response to the threat of major wildfires in Canada's oil sands and ahead of expected declines in U.S. crude oil and gasoline inventories later in the day.

The US WTI crude oil price rose 0.4% to $82.71 a barrel, while Brent crude rose 0.5% to $78.39 a barrel. The spot price of gold remained virtually unchanged at $2,356.79 per ounce.

 

[KostiaForexMart]

USD loses its downward momentum

Today, the dollar index is trying to limit the falls of the last few days and is above 104.2. The EUR/USD exchange rate approached the 1.0900 mark.

This is more of an emotional outburst. The markets are evaluating the new inflation figures in the US. Already today, emotions should subside, as traders will start analyzing the situation with a cool head.

After the inflation publication, the head of the Federal Reserve Bank of Minneapolis confirmed that it will probably be necessary to keep the rate at the current level for some more time and expressed doubts about how much it is holding the US economy back.

Experts at the Bank of America remain in the same position, believing that the first rate cut will not occur until December. To cut the rate in September, it is necessary that inflation slows further or labor market data weaken even more.

Still, the yield on 10-year US Treasury bonds fell to 4.32% on Wednesday, the lowest level since early April, as softer inflation data gives the Fed more flexibility to cut rates this year.

The dollar index has weakened over the past few days. The DXY is now near the price lows of April (103.95), which is the nearest support level. Perhaps within this range, the dollar's weakening will temporarily slow down. At least that is the picture we see now.

When will the Fed cut rates?

The main question is when the Fed will lower interest rates. This is of interest to analysts and financial market observers. According to analysis and forecasts, the likely month to start cutting rates is still September, as key elements of US inflation have started to show declines.

DNB Markets writes that they believed that current data would not change the likelihood of a rate cut in the autumn, provided inflation data remained moderate and labor market conditions continued to improve. Their forecasts indicate that the market expects the first rate cut in September.

According to inflation data released on Wednesday, overnight index swaps, which reflect traders' expectations of future interest rates, show that the market now fully appreciates the likelihood of a rate cut in September.

Two weeks ago, the first cut was not expected until December.

In 2024, expectations for a Fed rate cut have fallen significantly due to higher inflation in the first quarter of the year. Signals have emerged that some elements of the inflation basket will resist a change.

This boosted US bond yields and the US dollar in currency markets. Such a situation could happen again.

Until core inflation (excluding housing costs) and housing costs decline, the overall inflation rate will not be able to hold steady at the Fed's 2.0% target.

Housing costs, which account for about 40% of the overall consumer price index, have risen as a result of steady increases in home prices and rents in recent years.

However, PNC Bank says the April 2024 consumer price report may bring some relief to Fed policymakers, as the most stable housing and core services segments of the CPI showed the first signs of softening in a long time.

The core CPI declined to 0.2% month-over-month, and house price growth was just +0.2% month-over-month, the lowest since January 2021 (+0.6%).

PNC's forecast of two 25-basis-point rate cuts this year, in September and December, now seems more reasonable than earlier in 2024.

Other analysts are expressing a similar view. Berenberg believes the current inflation data makes it slightly more likely that the Fed will start cutting rates sooner.

"We continue to expect one 25-bp rate cut in December and three further such moves next year to bring the Fed funds target rate to 4.25–4.50%," Berenberg wrote.

Economists at Wells Fargo and Pantheon Macroeconomics also share this view. It takes some favorable inflation indicators for the Fed to feel confident about a rate cut. The first rate cut is possible at the FOMC meeting in September.

Pantheon Macroeconomics argues that the case for expecting a further slowdown in core inflation remains strong. Supply chains have stabilized, wage growth is slowing, and corporate margins remain strong, pointing to the outlook for the future.

Economists also note the lack of threat from global food and energy prices, as well as subdued rent growth and lower car prices. This indicates a slowdown in auto insurance inflation.

Thus, the stage is set for a further slowdown in the core CPI this summer, allowing the Fed to begin easing in September.

With the market consensus increasingly leaning toward a September rate cut, all eyes will be on upcoming macroeconomic data that could confirm these expectations.

 

[KostiaForexMart]

Wall Street Week: Key Events and Forecasts for the Days Ahead

At the end of the day on the New York Stock Exchange, the Dow Jones index increased by 0.34%, reaching a new record level, while the S&P 500 rose by 0.12%. The NASDAQ Composite Index, on the contrary, decreased by 0.07%.

Among the stocks included in the Dow Jones index, Caterpillar Inc (NYSE:CAT) stood out with a gain of 5.65 points (1.61%) to 356.37. JPMorgan Chase & Co (NYSE:JPM) shares rose 2.38 points (1.18%) to end at 204.85. Also worth noting is Boeing Co (NYSE:BA), whose shares rose 2.03 points (1.11%) to close the day at 184.99.

On the other hand, Amgen Inc (NASDAQ:AMGN) shares were down 2.25 points (0.71%) to end the day at 312.47. Intel Corporation (NASDAQ:INTC) rose 0.20 points (0.62%) to close at 31.83, while Verizon Communications Inc (NYSE:VZ) fell 0.20 points (0.50%). ), ending the session at 40.05.

Among the growth leaders among the components of the S&P 500 index are shares of Valero Energy Corporation (NYSE:VLO), which rose by 4.82%, reaching 166.14, shares of Freeport-McMoran Copper & Gold Inc (NYSE:FCX), which increased by 4 .25% to 54.25, and Chubb Ltd (NYSE:CB), up 3.60% to 274.43.

Meanwhile, Paramount Global Class B (NASDAQARA) shares fell 4.91% to close at 12.02. Dollar Tree Inc (NASDAQLTR) fell 3.29% to end the day at 117.31, while Lam Research Corp (NASDAQ:LRCX) fell 3.27% to finish at 912.07.

In Friday trading on the NASDAQ Composite stock exchange, shares of Fangdd Network Group Ltd (NASDAQUO) showed significant growth, soaring by 309.76%, reaching a price of 1.68. Also, FLJ Group Ltd (NASDAQ:FLJ) rose 223.59% to finish the day at 1.55, and Jeffs Brands Ltd Unit (NASDAQ:JFBR) rose 109.03% to finish the day at 0. .65.

At the same time, Blue Star Foods Corp (NASDAQ:BSFC) saw a significant decline of 45.19% to close at 0.08. SINTX Technologies Inc (NASDAQ:SINT) shares fell 39.29% to close at 0.09. Heart Test Laboratories Inc Unit (NASDAQ:HSCS) fell 38.37% to close at 6.97.

On the New York Stock Exchange, the number of stocks whose prices increased (1,570) outnumbered the number of stocks that closed lower (1,256), while 85 stocks remained unchanged. On the NASDAQ stock exchange, the situation was less favorable: here shares of 1,790 companies lost value, 1,570 showed growth, and 125 remained at the same level.

Freeport-McMoran Copper & Gold Inc (NYSE:FCX) shares hit a new high, rising 4.25% or 2.21 points to finish the day at 54.25. Chubb Ltd (NYSE:CB) also set a record, rising 3.60% or 9.55 points to close at 274.43.

JPMorgan Chase & Co (NYSE:JPM) shares hit a high, rising 1.18% or 2.38 points to finish at 204.85. While Heart Test Laboratories Inc Unit (NASDAQ:HSCS) shares fell to a record low, losing 38.37% or 4.34 points to end the day at 6.97.

The CBOE Volatility Index, a measure of market expectations based on S&P 500 options trading, fell 3.46% to a three-year low of 11.99.

Gold futures for June delivery rose 1.46%, or 34.85, to $2.00 a troy ounce. WTI crude oil futures prices for June rose 0.95%, or 0.75, to close at $79.98 a barrel. Brent crude futures for July delivery rose 0.80%, or 0.67, to $83.94 a barrel.

On the Forex market, EUR/USD remained virtually unchanged, rising just 0.05% to hit 1.09, while USD/JPY rose 0.20% to hit 155.68.

The U.S. dollar index, which measures its value against a basket of foreign currencies, advanced slightly by 0.02% to close at 104.37.

Historical data indicates that the current recovery in the US stock market, which led to record highs this week, may continue into the future.

A slowdown in economic growth eased inflation concerns in May, spurring the three major US stock market indexes to hit all-time highs. The S&P 500, which lost more than 4% in April, is now up 11% year-to-date.

Market analysts who study historical data note that stocks tend to rise faster after corrections of comparable magnitude, and often continue to rise even after recovering lost ground.

Following this pattern, the current recovery could herald further gains in stock prices. After past 5% declines in the S&P 500, the subsequent average gain has been 17.4%, according to Keith Lerner, co-chief investment officer at Truist Advisory Services. At the close of trading on Friday, the index was already up nearly 7% from its April lows.

Investors are also expressing increased optimism about the economy's prospects for a so-called "soft landing" as well as forecasts for strong corporate profits, which could fuel further gains in stock prices.

Market activity will be tested on Wednesday when Nvidia (NVDA.O), whose shares have jumped on a wave of interest in artificial intelligence, reports its quarterly financial results.

Investors will also focus on durable goods data and consumer sentiment next week, expecting to see further evidence of slowing economic growth that could support the case for interest rate cuts this year.

Sam Stovall, chief investment strategist at CFRA, noted that momentum plays a significant role in determining how different market segments will perform post-recovery. He pointed out that the S&P 500 sectors that led during the market's post-correction recovery outperformed the overall market 68% of the time. Stovall analyzed 35 market advances since 1990.

Stovall's main takeaway is: "After recovering from a correction, it is important to allow your leaders to continue moving higher."

The most recent market recovery was led by the technology (.SPLRCT), utilities (.SPLRCU) and real estate (.SPLRCR) sectors, which posted gains of 11.3%, 10.1% and 7.9%, respectively.

Currently, all 11 S&P 500 sectors are ahead of their 200-day moving averages, said Willie Delwiche, an independent investment strategist and business professor at Lutheran College of Wisconsin.

Delwiche found that when at least nine sectors beat these trend indicators, the average annual return of the S&P 500 index reaches 13.5%.

However, a number of external factors can disrupt this growth. For example, despite recent data pointing to slowing inflation and tepid labor market growth, weak signs of a sustained cooling in the economy could reignite fears of an overheated economy, which could force the Federal Reserve to maintain high interest rates or even raise them.

Despite the positive economic signals, Federal Reserve officials are not yet inclined to change their plans to cut rates, which many investors expect to begin this year.

It's also worth noting that many stocks are highly valued, with the S&P 500 trading at a forward P/E ratio of 20.8, well above the historical average of 15.7, according to LSEG Datastream.

Banking strategists advise focusing on possible short-term sell-offs, given that ultimately the economic context will be decisive. They predict the S&P 500 could rise about 4% to 5,500 over the course of the year.

 

[KostiaForexMart]

Nasdaq records highs and S&P rises: All eyes on Nvidia

The Nasdaq hit record highs on Monday, while the S&P 500 posted modest gains as technology stocks advanced, ahead of Nvidia's results. The market also assessed the likelihood of interest rate cuts by the Federal Reserve.

Among the S&P's major sectors, technology .SPLRCT led the pack, rising 1.32%, led by gains from chipmakers including Nvidia, which rose 2.49% ahead of its quarterly earnings report.

Investors are looking at Nvidia's earnings to see whether the artificial intelligence leader will maintain its rapid growth and advantage over rivals.

Several brokerages increased their targets for Nvidia, and Micron Technology (MU.O) shares rose 2.96% after Morgan Stanley upgraded its rating to "equal weight" from "underweight." The PHLX Semiconductor Index (.SOX) rose 2.15%.

Stephen Massocca, a senior vice president at San Francisco-based Wedbush Securities, said: "If Nvidia's results exceed expectations, it could cause a bit of a stir. However, given the high cost, significant growth is unlikely."

"A Fed rate cut could spark a rally, but current data doesn't yet support that scenario."

The Dow Jones Industrial Average (.DJI) fell 196.82 points, or 0.49%, to 39,806.77. While the S&P 500 Index (.SPX) rose 4.86 points, or 0.09%, to 5,308.13, and the Nasdaq Composite Index (.IXIC) rose 108.91 points, or 0.65%. , closing at 16,794.87.

The Dow's decline came as JPMorgan (JPM.N) shares fell 4.5% after CEO Jamie Dimon expressed "cautious pessimism" and noted that the company has no plans to buy back shares at current prices.

A strong earnings season and signs of slowing inflation have reignited expectations that the Federal Reserve will cut interest rates this year, pushing major indexes to record levels. Let's remember that last week the Dow Jones index (.DJI) exceeded 40,000 points for the first time.

Fed officials' comments on Monday had little impact on interest rate forecasts, despite their insistence that inflation pressures were easing and emphasizing the importance of a cautious approach.

The minutes of the Federal Reserve's latest monetary policy meeting are scheduled to be released on Wednesday. Markets estimate the chance of a rate cut of at least 25 basis points at the September meeting at 63.3%.

The latest stock market rally has raised concerns about lofty stock valuations, with the S&P 500 trading at a P/E ratio of 20.8, well above its historical average of 15.9, according to LSEG.

Deutsche Bank raised its end-2024 forecast for the S&P 500 to 5,500 from a previous 5,100, the highest expected level among leading brokerages. In turn, Morgan Stanley predicts that the index will reach 5,400 points by June 2025.

Shares of the Norwegian cruise line (NCLH.N) rose 7.56% after the company raised its full-year profit forecast. On the New York Stock Exchange, advancing stocks outnumbered declining ones by a ratio of 1.14 to 1. At the same time, on the Nasdaq, declining stocks outnumbered advancing ones by a ratio of 1.01 to 1.

The S&P 500 has recorded 58 new highs and four new lows over the past 52 weeks, while the Nasdaq has posted 222 new highs and 101 new lows. Trading volume on US exchanges reached 12.31 billion shares, exceeding the last 20 trading days' average of 11.82 billion.

Asian markets were lower and the dollar held steady on Tuesday ahead of the release of minutes from the Federal Reserve's latest meeting, which could provide clues about the timing and extent of a potential interest rate cut this year.

Gold prices retreated from Monday's record high and oil prices fell on concerns that U.S. interest rates could remain high for a long time due to the Federal Reserve's cautious approach to the recent decline in inflation.

Cryptocurrencies including ether and bitcoin hit new six-week highs amid speculation the US Securities and Exchange Commission (SEC) could approve a spot exchange-traded fund (ETF) for ether.

MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.9% after the Hang Seng retreated 1.9% from its multi-month high hit on Monday.

Japan's Nikkei (.N225), which tracks technology stocks, subsequently edged 0.1% lower after rising to record highs overnight.

Nasdaq futures fell 0.06%, while S&P 500 futures remained steady after rising 0.1% the previous day.

"Market sentiment continues to remain relatively stable with low implied volatility, supported by confidence in the possibility of US interest rate cuts this year," Kyle Rodda, senior markets analyst at Capital.com, said in an analysis.

In addition, record price levels for metals such as gold and copper "act as indicators of a pick-up in economic activity around the world, which in turn could act as a headwind for inflation," Rodda added.

Gold fell 0.3% to around $2,417 an ounce, after first rising to $2,450 overnight.

The dollar held its ground against major currencies, with the dollar index remaining at 104.62, recovering from a five-week low of 104.07 recorded on Thursday.

The 10-year U.S. Treasury yield was little changed at 4.4433% after rising 1.7 basis points on Monday.

Brent crude fell 0.7% to $83.17 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 0.7% to $79.22 a barrel.

At the same time, after the announcement that the Securities and Exchange Commission (SEC) unexpectedly required exchanges wishing to trade Ethereum ETFs to update their regulatory documents, traders were actively purchasing cryptocurrencies. The development raised expectations that approval for trading could come as soon as this week, sending the market to new highs.

Bitcoin hit $71,957 while Ethereum rose to $3,720.80, both setting highs not seen since April 9.

"Expectations regarding the approval of the Ethereum ETF have significantly impacted market activity, adding to the already growing bullish trend in the cryptocurrency space. The move gained further momentum after lower-than-expected US CPI data was released last week," said IG analyst Tony Sycamore.

Sycamore predicts that Bitcoin could soon again reach its all-time high of $73,803.25 and possibly even surpass the $80,000 mark.

 

[KostiaForexMart]

Technical Analysis of Intraday Price Movement of AUD/JPY Cross Currency Pairs, Wednesday May 22, 2024.

On the 4 hour chart, Silver commodity asset is appear, although the price is moving above WMA 20 which indicates that there are still a lot of buyers of this commodity asset. But if we pay attention, the level of 32,444 failed to be broken a few times which shows that in the near future Silver has the potential to corrected downwards where level 31,033 has the potential to be tests. If it managed to break, then Silver willgo to level 30,320 as the main target and if the momentum and volatility are supportive then level 29,615 will be the next target, but if on its way to these target levels it suddenly strengthens again and breaks above level 32,444 then all the weakening correction scenarios that have been described will become invalid and cancel itself.

(Disclaimer)

To be noted: the title seems not match with the content of the article, I only follow the source text.
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[KostiaForexMart]

Ups and downs: market reaction to the Fed and Nvidia's success

American stock markets fell on Wednesday, caused by investors' reaction to the published minutes of the latest Federal Reserve meeting. At the same time, Nvidia shares rose sharply, rising 6% in after-hours trading after announcing earnings that beat analysts' expectations.

The announcement also boosted share prices of other companies in the chip manufacturing sector. Investors' attention has been focused on Nvidia's (NVDA.O) ability to meet strong first-quarter guidance and the potential to sustain growth in artificial intelligence stocks.

Nvidia shares, which ended the trading day lower, are up about 90% this year, following an impressive 240% gain in 2023.

"The market is looking for confirmation from Nvidia that they are able to maintain leadership despite their current successes... and what will happen to their strategic vision in the future and how they justify current estimates of their value," commented Megan Horneman, chief investment officer at Verdance Capital Advisors in Hunt Valley, Maryland.

"The most important thing is company valuations. Regardless of how the market reacts to the news, we must look closely at the financial statements and valuations offered for these companies' shares to understand how overvalued they may be," she added.

The Dow Jones Industrial Average .DJI lost 201.95 points, or 0.51%, to close at 39,671.04. The S&P 500 Index (.SPX) was down 14.40 points, or 0.27%, at 5,307.01. And the Nasdaq Composite Index .IXIC fell 31.08 points, or 0.18%, to finish the day at 16,801.54.

Stocks fluctuated throughout most of the trading session, but lost ground after the release of Federal Reserve meeting minutes revealed that central bankers still expect inflation to slow but admit it will be a long process, prompting disappointment due to latest inflation data.

The Fed's meeting, held from April 30 to May 1, followed a quarter of stable inflation but came ahead of later data indicating a potential easing in price pressures.

Stocks hit record highs this month, thanks in part to optimism in artificial intelligence, a strong earnings season and renewed expectations of a Fed rate cut this year.

Analysts expect the S&P 500 to remain near current levels of around 5,302 by year's end, but caution that significant gains in the index could lead to a correction in the coming months.

According to CME's FedWatch Tool, the likelihood of the Fed cutting rates by 25 basis points by the September meeting is estimated by markets at 59%, down from the previous level of 65.7%.

Shares of Analog Devices (ADI.O) rose 10.86% after announcing it expected third-quarter revenue to beat estimates.

The energy sector (.SPNY) was the worst performer, down 1.83%, as oil prices continued to decline for a third straight session.

Retail chain Target (TGT.N) shares fell 8.03% as its quarterly earnings and guidance for the current quarter fell below expectations.

While TJ Maxx parent TJX Companies (TJX.N) shares rose 3.5% on improved full-year profit forecasts.

Decliners outnumbered advancers by a 2.75-to-1 ratio on the New York Stock Exchange and 1.5-to-1 on the Nasdaq.

Mixed quarterly results from Target (TGT.N) and TJX (TJX.N) sparked discussions about the stability of US consumer activity.

Nvidia's upcoming quarterly report presents a new test for the US stock rally, which is heavily dependent on the outlook for artificial intelligence technology.

Investor sentiment has strengthened, according to Bassuk: "The market as a whole, the semiconductor sector and especially Nvidia, may have grown too fast and too much. We believe there is excessive hype around Nvidia and investors should approach their stock purchases with greater caution."

Statistics showed that the volume of real estate sales in the United States was below experts' expectations. At the same time, unexpectedly high core inflation figures in the UK have led investors to abandon bets on a possible interest rate cut by the Bank of England next month.

British Prime Minister Rishi Sunak announced elections on July 4. His Conservative Party is expected to concede to the Labor Party.

"Sunak is probably counting on a surprise effect... but this is unlikely to have much impact on markets," said Jane Foley, head of currency strategy at Rabobank in London. "It doesn't change the fact that Labor is 20 points ahead in the polls."

European shares retreated on reports of high inflation in the UK and news that China could impose tariffs on imported cars.

The pan-European STOXX 600 Index (.STOXX) was down 0.34% and the MSCI Global Share Index (.MIWD00000PUS) was down 0.39%.

Emerging market shares rose 0.12%. MSCI's broad index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ended the session 0.31% higher, while Japan's Nikkei .N225 fell 0.85%.

The 10-year US Treasury yield rose from session lows following the release of Fed minutes.

At the last meeting, the 10-year Treasury note fell 4/32 in price, yielding 4.4276%, up from 4.414% at the end of the previous day.

The price of the 30-year US Treasury note rose to 4.5443% after rising 5/32 from 4.554% recorded Tuesday evening.

The US dollar strengthened against major world currencies. The dollar index (.DXY) rose 0.26%, while the euro weakened 0.29% to $1.0823.

The Japanese yen lost 0.39% to trade at 156.78 per dollar. The British pound was up 0.05% on the day, trading at $1.2713.

Oil prices extended their decline for a third straight day amid concerns that the US Federal Reserve's tight monetary policy could dampen demand.

The price of US WTI crude oil fell by 1.39%, reaching $77.57 per barrel, while Brent crude oil traded at $81.90 per barrel, down 1.18% from the previous value.

Gold prices also fell, moving away from recent record highs. The spot gold price fell 1.8% to $2,379.22 an ounce.
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[KostiaForexMart]

The yen may have already executed a long-term reversal. Overview of USD/JPY

Business activity in Japan is growing at its fastest pace in almost a year, indicating that economic growth may recover in the second quarter after a decline in the first three months of the year. However, inflationary pressure continues to ease, raising doubts about the Bank of Japan's ability to continue raising rates without plunging the economy back into deflation.

The Jibun Bank Japan flash composite PMI index rose to 52.4 in May, marking the fastest growth in activity since August 2023.

At the same time, the general recovery is accompanied by rates of input cost and output price inflation both easing in May. According to S&P Global, this preludes "softer inflationary pressures across official gauges." Just an hour after the report was released, the BOJ announced that purchases of Japanese government bonds will remain unchanged in upcoming operations, refraining from making a further reduction. Earlier this month, markets had expected the BOJ to both raise rates and reduce bond purchases, so this news represents a small change in previous forecasts, thereby increasing bearish pressure on the yen.

The nationwide Consumer Price Index for April was set to be published on Thursday night, and core inflation was expected to slow from 2.6% to 2.2%. If the data's results are close to forecasts, the USD/JPY pair may rise, as this will reduce the likelihood of a BOJ rate hike amid easing inflation.

The net short JPY position has decreased to -10.5 billion, marking the third consecutive week of decline. Regardless, speculative positioning remains firmly bearish, and it is still too early to count on a long-term reversal. The price is below the long-term average and is heading downwards.

The likelihood that USD/JPY formed a long-term high of 160.20 on April 29 is increasing. The pair stopped rising due to a powerful currency intervention by the BOJ (reportedly involving $60 billion). However, over the past three weeks, the yield on 10-year Japanese bonds has closely approached 1%, reflecting the market's reassessment of its prospects on the future interest rate.

We expect the pair to reverse before it approaches 160, so the most reasonable strategy at this stage is to sell on rallies in anticipation of a long-term reversal. The nearest target is 153.40/60, with a local low at 151.78. Consolidation below this level will reinforce the bearish sentiment.

 

[KostiaForexMart]

In the thick of things: inflation in the West and financial news from the East

Experts are looking forward to the release of the US personal consumption price (PCE) index this Friday, which is a key indicator for the Federal Reserve System (Fed).

The data is expected to provide insight into future interest rate movements for the remainder of the year. Markets have already adjusted to the possibility of a rate hike, based on recently released Fed meeting minutes and muted comments from officials expressing doubts about a sustained decline in inflation.

Earlier this month, separate reports showed moderate growth in consumer prices, which was below expectations. This has raised hopes of a possible rate cut this year after months of higher inflation.

Minutes of the Fed's latest meetings confirmed that regulators expect price pressures to ease, although they cautioned that it will be necessary to wait several months before they can be sure that the 2% inflation target has been achieved before undertaking new economic initiatives.

This week, market participants will expect a series of speeches from a number of key figures from the Federal Reserve, including Michelle Bowman, Loretta Mester from the Cleveland Fed, Lisa Cook, John Williams from the New York Fed and Raphael Bostic from the Atlanta Fed. These events will provide investors with additional guidance regarding the current economic climate.

Also included in the economic agenda are updated estimates of first-quarter U.S. economic growth due Thursday, as well as the Federal Reserve's Beige Book report scheduled for Wednesday. These data will provide additional information about the state of the economy, which could influence future monetary policy decisions.

At the upcoming June meeting, the European Central Bank (ECB) is likely to take steps to cut interest rates from the current record level of 4%. However, the pace of further rate cuts remains an open question, especially in the context of upcoming eurozone inflation data on Friday, which could indicate continued price pressures.

Eurozone inflation is expected to rise to 2.5% per annum in May from 2.4% in April, while core inflation will remain at 2.7%. This should not prevent the ECB from cutting rates in June, although some officials have spoken out against further easing of monetary policy.

Next week will also see the release of important economic data for the eurozone, including the Ifo business climate index in Germany on Monday and the ECB's survey of inflation expectations on Tuesday.

Market attention is focused on the upcoming inflation data in Tokyo, which will be published this Friday. Analysts and investors are analyzing this data in an attempt to predict possible changes in the Bank of Japan's monetary policy, especially in the context of the expected next interest rate hike.

This publication will take place two weeks before the Bank of Japan meeting, at which, as experts suggest, a second rate hike may occur after a significant decision in March. The country is under growing pressure on the central bank to raise rates as the yen continues to weaken, raising the cost of imported goods and weighing on consumer demand.

Also this Friday, the Japanese Ministry of Finance will present data on the latest interventions in the foreign exchange market and changes in the bond purchase schedule of the Bank of Japan. Investors will be closely watching for a possible reduction in purchases by the central bank.

Early in the week on Monday, China will release industrial profit data for the past year, allowing analysts and investors to assess whether April's performance recovered from a big drop in March. The drop weighed on the country's economic growth in the first quarter, which slowed to 4.3%.

The official PMIs for the manufacturing and non-manufacturing sectors will be released on Friday. Economists forecast that the manufacturing PMI should exceed the threshold of 50 for the third time in a row in May, indicating growth in the sector.

Beijing has set an ambitious target for economic growth of around 5% this year, but many experts say that target is difficult to achieve. Continued difficulties in the real estate sector and weak consumer demand continue to be major headwinds for the world's second-largest economy.

Oil prices rose 1% on Friday, but ended the week in the red on expectations that strong economic growth in the US could keep interest rates high for an extended period, which in turn would weigh on fuel demand.

Brent prices fell 2.1% during the week, marking the largest number of consecutive declines since early January. The US WTI fell 2.8% for the week.

High interest rates lead to rising borrowing costs, which could limit economic activity and reduce demand for oil. However, overall oil demand remains high, according to Morgan Stanley analysts.

They estimate that global consumption of liquid petroleum products will increase by about 1.5 million barrels per day this year.

Weak demand for gasoline in the United States is compensated by an increase in global demand, especially noticeable at the beginning of the year, experts emphasize.

 

[KostiaForexMart]

Nasdaq hits 17,000 milestone as market swings continue

On Tuesday, the Nasdaq hit 17,000 for the first time on strong gains in Nvidia shares, while the S&P 500 ended slightly higher and the Dow Jones Industrial Average fell as Treasury yields rose.

Shares of Nvidia (NVDA.O) rose 7%, also lifting shares of other chip makers as traders returned to the market after a long weekend. The semiconductor index (.SOX) recorded an increase of 1.9%.

The S&P 500's technology (.SPLRCT) sector posted the best gains, while healthcare (.SPXHC) and industrials (.SPLRCI) posted the biggest declines.

The current situation in the stock market was exacerbated by rising US Treasury yields, which reached a multi-week high after the results of auctions for the sale of government debt were unsatisfactory.

"We experienced two unsuccessful auctions, which led to higher bond yields and a negative reaction in the stock market," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

He also added: "The market is discouraged from rising bond yields to levels that could threaten economic stability and consumer demand, and disrupt the Federal Reserve's policy easing plans."

This week, investors are eagerly awaiting new data on inflation in the United States, which could significantly affect the forecasts for changes in the Federal Reserve's key rate.

The main report on the core US personal consumption price index for April is due out this week. This key inflation indicator, which the Federal Reserve uses to make decisions, is expected to show stability on a monthly basis.

The Dow Jones Industrial Average (.DJI) suffered losses, falling 216.73 points, or 0.55%, to 38,852.86. Meanwhile, the S&P 500 (.SPX) rose slightly 1.32 points, or 0.02%, to 5,306.04, and the Nasdaq Composite (.IXIC) rose 99.09 points, or 0.59 %, closing at 17,019.88.

Wall Street continues to set records as investors look to the Federal Reserve to cut interest rates later this year.

Fluctuations remain in expectations about the timing of rate cuts, with policymakers remaining cautious as economic data continues to show significant inflation.

According to the CME FedWatch tool, the likelihood of an interest rate cut of at least 25 basis points is greater than 50% only in November and December of this year. In September, the figure dropped to about 46% from more than 50% the week before.

Market attention is also focused on retail, especially with upcoming reports from major retailers including Dollar General (DG.N), Advance Auto Parts (AAP.N) and Best Buy (BBY.N).

On Tuesday, US stock markets will begin the transition to a shorter settlement cycle. Regulators expect this to reduce risks and improve operational efficiency, although it is expected that the transition may initially increase the number of failed deals among investors.

Apple's (AAPL.O) share price rose after iPhone sales in China rose 52% in April from a year earlier, according to Reuters calculations based on industry data. However, by the close of trading, the stock's gains had slowed and it ended only slightly higher than its previous level, at $189.99.

GameStop (GME.N) shares jumped 25.2% to finish the day at $23.78 after the company announced Friday evening that it had raised $933 million by selling 45 million shares in what it called a "market" offering.

Shareholders of Hess (HES.N) approved its merger with Chevron (CVX.N), valued at $53 billion. Hess shares ended up 0.4%, Chevron shares were up 0.8% and Exxon Mobil (XOM.N) shares were up 1.3%.

On the Nasdaq, decliners outnumbered advancers by a ratio of 1.34 to 1. On the NYSE, the ratio was 1.75 to 1.

The S&P 500 posted 24 new highs and 11 new lows for the year, while the Nasdaq Composite posted 93 new highs and 107 new lows.

Trading volume on US exchanges reached 11.91 billion shares, slightly below the average level of 12.32 billion recorded over the past 20 trading days.

US Treasury yields rose after a failed debt auction. It also rose earlier when data showed an unexpected improvement in US consumer confidence in May, boosted by optimism about the labor market, which had seen contraction for the previous three months.

Meanwhile, March saw a sharp slowdown in US home price growth, likely as rising mortgage rates put pressure on demand.

"The market is nervously awaiting confirmation of a slowdown in inflation towards the Fed target," an analyst from Goldman comments on the situation.

The MSCI Global Share Index .MIWD00000PUS lost 1.28 points, or 0.16%, to 792.07.

Europe's STOXX 600 index (.STOXX) ended the session down 0.6%. Treasury yields rose after two failed government debt auctions raised doubts about demand for U.S. government debt, while investors also weighed economic indicators that raised uncertainty about the Federal Reserve's future monetary policy.

"Given Tuesday's volume of supply, which included $297 billion in coupons and notes, some discomfort is to be expected," said Tom Simons, an economist at Jefferies in New York.

The yield on the 10-year US benchmark note rose 6.7 basis points to 4.54%, up from 4.473% reported late Friday. Also, the 30-year yield rose 7.9 basis points to 4.656%.

The 2-year yield, which traditionally responds to changes in interest rate expectations, rose 2.1 basis points to 4.9742%.

As for the foreign exchange market, the dollar index recovered its position after the rise in Treasury yields and showed a slight increase.

"The bond market took a sharp turn on Tuesday and the dollar followed suit," said Adam Button, chief currency analyst at ForexLive in Toronto, citing weak auction results and noting that an improvement in the consumer confidence report suggested stronger economic growth.

The index measuring the dollar against a basket of foreign currencies, including the yen and the euro, rose 0.04% to 104.60, while the euro remained unchanged at $1.0858.

Against the Japanese yen, the value of the dollar increased by 0.18%, reaching 157.14.

Oil prices rose more than a dollar a barrel in anticipation that OPEC+ will continue to curb crude supplies at its upcoming meeting on June 2. Additional growth in commodity prices was triggered by the start of the summer road travel season in the United States and the weakening of the dollar.

US crude futures rose 2.71% to $79.83 per barrel, while Brent crude rose 1.35% to settle at $84.22 per barrel.

There was also an increase in gold prices: the spot price of gold rose by 0.33%, reaching $2,358.58 per ounce. US gold futures rose 1.17% and now cost $2,359.70 an ounce.
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