Key highlights
Eurozone economic growth was stronger than previously expected in the first quarter, and employment rose too, showing the Eurozone expanded at the solid pace seen at the end of 2021 despite the war in Ukraine. The EU's statistics office Eurostat said the GDP of the 19 countries sharing the euro rose 0.3% q-o-q in the Jan-Mar period for a 5.1% y-o-y growth.
Britain's jobless rate hit a 48-year low in the first three months of 2022 and employers paid bigger bonuses to keep or attract staff, which added to bets by investors on further Bank of England interest rate hikes. Total pay including bonuses was up 7.0% a year earlier, far above economists' average forecast of 5.4%.
India's wholesale prices accelerated at the fastest pace since at least April 2005, as the Ukraine war and a weak rupee pushed up energy and raw material costs for companies. Annual wholesale price inflation, climbed to 15.08% in April, remaining in double-digits for the 13th month in a row, and higher than the 14.48% forecast in a Reuters poll of analysts.
USD/INR movement
The USDINR pair opened at the 77.67 level. The pair traded within the range of 77.53-77.7875. The pair closed the day at 77.57. The USDINR pair rose today as broader strength in the dollar continued and also as the global crude oil prices continued to trade higher. Global crude prices rose on optimism that China would see significant demand recovery after positive signs that the country's pandemic was receding in the hardest-hit areas. The dollar index shed some ground for the third consecutive session, however, continued to trade above the 103 mark. We have seen the Reserve Bank of India on the receiving side, they seem to have sold spots and cutting long forward positions. Ultimately we may see no reflection in the reserves. Hence we have …
Global currency updates
The euro traded higher against the US dollar tracking a pullback in the dollar index from recent highs as investors focused on EU GDP numbers and US retail sales data to get direction clues. The positive shift in risk sentiment seems to be provided a boost to the Euro currency. Eurozone economic growth was stronger than previously expected in the first quarter, and employment rose too, better than expected GDP numbers also supported the euro.
The British Pound rose against the dollar following the release of UK labour market statistics that revealed a strong jump in wages and a larger than expected fall in unemployment. The unemployment rate unexpectedly fell to 3.7% from 3.8%, which is the lowest level in 50 years.
Bond market
The yield on the US benchmark 10-year Treasury note climbed as investors awaited a fresh batch of economic data and watched for clues on the path of monetary policy. Domestic bond yields also edged higher tracking the uptick in global crude oil prices. India's 10-year benchmark closed at 7.367%, up 5 basis points from the previous close.
Equity market
Indian equity benchmarks Sensex and Nifty 50 clocked strong gains amid across-the-board buying. Financial, IT, and metal shares were the biggest contributors to the gains in both headline indices. Broader markets mirrored the surge in main indices, with the Nifty midcap 100 and Nifty smallcap 100 gauges rising around 3% each. State-run LIC's shares debuted on stock exchanges BSE and NSE at a discount of around 8% to the issue price.
Evening sunshine
"Focus to be on the FOMC member’s speech and Michigan consumer expectations data due later today."
European stocks advanced as global markets try to build on some positive momentum seen at the start of the new trading week. U.S. stock futures too rose, rebounding from a choppy session Monday, as investors grappled with concerns about the economic outlook amid high inflation. Market participants are likely to monitor Fed speeches. On the data front, retail sales for April will be released, with industrial production figures and capacity utilization data for April. With Finland and Sweden both announcing their bids to join the Western military alliance NATO, all eyes are on Russia and how it might react.
This report has been prepared by IFA Global. IFA Global shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. IFA Global nor any of directors, employees, agents or representatives shall be held liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this report. This statement, prepared specifically at the addressee(s) request is for information contained in this statement. All market prices, service taxes and other levies are subject to change without notice. Also the value, income, appreciation, returns, yield of any of the securities or any other financial instruments mentioned in this statement are based on current market conditions and as per the last details available with us and subject to change. The levels and bases of, and reliefs from, taxation can change. The securities / units / other instruments mentioned in this report may or may not be live at the time of statement generation. Please note, however, that some data has been derived from sources that we believe to be reliable but is not guaranteed. Please review this information for accuracy as IFA Global cannot be responsible for omitted or misstated data. IFA Global is not liable for any delay in the receipt of this statement. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IFA Global to any registration or licensing requirements within such jurisdiction. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. IFA Global reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IFA Global is under no obligation to update or keep the information current. Nevertheless, IFA Global is committed to providing independent and transparent information to its client and would be happy to provide any information in response to specific client queries. Neither IFA Global nor any of its directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The information provided in these report remains, unless otherwise stated, the copyright of IFA Global. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright IFA Global and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.