FOREX
In early Thursday trading, the US dollar ceded ground to other major currencies following Jerome Powell's clarification of the central bank's stance regarding a potential rate hike, which he dismissed. With the extreme possibility of a rate hike now discounted, attention has shifted back to the timing of a possible cut. Powell's remarks at the press conference were perceived as dovish despite acknowledging the lack of progress on inflation. This leaves the timing of a rate cut somewhat uncertain, with expectations leaning towards July or September, potentially followed by another cut before year-end. Such a scenario suggests continued weakness for the dollar in the medium to long term.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares opened mixed on Thursday, with benchmarks having a break following yesterday’s decline as investors continue to digest the latest macro developments. The FOMC unsurprisingly kept borrowing rates unchanged during yesterday’s meeting, but played down the need to make further hawkish moves despite sticky inflationary pressures in the US.
The market, initially worried about monetary policy due to the lack of positive development regarding inflation and sound economic data proving the US economy to be more resilient than anticipated, has halted its sell-off just above crucial support levels.
While monetary uncertainty lingers, investors are already bracing for tomorrow’s US NFP report, hoping these data will help them understand where the US economy is heading. On a more positive note, the corporate front seems resilient to this uncertain environment as investors witness another reassuring earnings season, with 70% to 80% of companies topping revenue forecasts.
In addition to the forthcoming macro developments (US NFP, EU PMIs), investors are likely to pay great attention to today’s Q1 earnings report from Apple, with hopes that the Cloud activity and other services from the tech giant will offset the current iPhone sales slowdown.
The STOXX-50 index trades sideways, just above the crucial 4,900pts level, as losses from the energy and industrial sector offset gains from financial and utility shares.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.