08.05.23 - 12.05.23
Results of the previous week
| VIX +5.17% | PL +3.89% | NG +2.51% |
XAGUSD -6.76% | WHEAT -3.45% | NZDUSD -0.73% |
Last week, US indices showed mixed dynamics. The US Consumer Price Index data offered moderate support for the stock market. Price pressure slightly declined to 4.9% (compared to 5% a month earlier), which gave additional reason to hope that the US Federal Reserve will still pause its rate hikes in the near future. But at the same time, the issue of the US debt ceiling is still undecided and remains a risk factor.
The dollar was able to strengthen somewhat against the euro, pound and commodity currencies. One of the critical reasons is risk aversion in the market. The US banking crisis and lack of consensus on national debt leave little choice, forcing markets into risk avoidance mode.
Oil's attempts to regain ground have so far been unsuccessful. After a short-term rise early this week, it resumed its decline. This is partly due to US commercial reserves data which unexpectedly showed an increase of 2.9 million barrels against forecasts of a 0.9 million decrease. Also, markets are concerned about a global economic slowdown and falling demand for the energy commodity.
Key events of the current week
Germany. ZEW Indicator of Economic Sentiment | DATE 16.05 | GMT | FORECAST | PREV. | IMPORTANCE |
After three months of decline, economic sentiment in Germany is forecast to improve. This is partly due to the movement of energy prices. In addition, inflation in Germany is gradually retreating from all-time highs, contributing to an improvement in sentiment. But looking at the state of the economy, it's clear that the situation is far from stable. GDP growth is only 0.2% in annualised terms. But if the indicator rises in line with forecasts, the euro may receive short-term support. In such a scenario, EUR/USD could return to 1.1100. | |||||
The US. Retail sales | DATE 16.05 | GMT | FORECAST | PREV. | IMPORTANCE |
Domestic consumption plays a very important role in the US economy. In the last two months, the indicator dropped, which served as a sign that the economy was cooling down. Analysts predict that the indicator will rise, and that's good news for the US dollar and the stock market. Furthermore, the latest inflation data indicate that price pressure is continuously weakening, which allows us to expect a pause in the US Federal Reserve's monetary policy tightening. That's why good retail sales figures could facilitate a renewed rise for the S&P 500, which could return to 4200.00. | |||||
The US. Crude oil reserves data | DATE 17.05 | GMT | FORECAST | PREV. | IMPORTANCE |
Despite the fact that some oil-producing countries are cutting back on their production, oil prices remain under pressure. One key factor for this is concerns about the global economy's prospects, and these worries are only growing as there continues to be no progress in talks over raising the US debt ceiling. If a resolution is not reached, the country could experience a default, which would result in serious problems for the whole world. In addition to that, although the driving season in the US is getting underway, crude oil reserves there grew last week. If history repeats itself, oil could once again come under pressure. Brent (BRN) crude oil price could return to their recent low of $71.50. | |||||
