Currencies
- The euro (EUR) crashed yesterday to the lowest point in the last eight months at 1.3366 as the US GDP data came out better than expected at 4.0%, despite the bad US ADP Non-Farm Employment change. The single currency rebound towards 1.3395 after dovish Fed. Today the yearly European CPI Flash Estimate will be announced where it expected to be at 0.5%.
- The US dollar (USD) skyrocketed yesterday against the Japanese yen (JPY) while reaching a 3-month high at 103.08 after better US GDP. The greenback rose versus all 15 major currencies, consumer confidence improved and durable goods increased.
Equities
- Asian equities gained yesterday. The Japan 225 (NKI) advanced to 15762, the Hong Kong 40 (HSX) went to 24639, the China 50 (CNX) to 7259 and the India 50 (IND) to 7800.
Commodities
- WTI Crude (OIL) crashed yesterday towards 99.53 USD per barrel as gasoline stockpile rose and demand declined in the US.
Mover & Shaker with forex options
- The British Pound (GBP) fell yesterday against the US dollar (USD) as the US economy recovered faster than expected, speculating it will increase interest rates for first time since 2008.
- Option traders may consider constructing a Back Spread Strategy with Calls on the GBPUSD and gain if the pair moves higher, while the risk is limited to the premium paid.
- A Back Spread Strategy with Calls can be constructed by selling an at the money Calls while buying an out of the money Calls at double amount.
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Editors’ Picks
AUD/USD rises to two-day high ahead of Aussie CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum continues hinting at rally following reduced long liquidations
Ethereum has continued showing signs of a potential rally on Tuesday as most coins in the crypto market are also posting gains. This comes amid speculation of a potential decline following FTX ETH sales and normalizing ETH risk reversals.
Australia CPI Preview: Inflation set to remain above target as hopes of early interest-rate cuts fade
An Australian inflation update takes the spotlight this week ahead of critical United States macroeconomic data. The Australian Bureau of Statistics will release two different inflation gauges on Wednesday.