Market Update – May 11/2022

Written by Stuart Cowell

USD holds at highs and on standby for US CPI later, Stocks stalled their recent declines,  Yields cool a tad as talk of Treasury rout also cools with 10-yr back under 3.00%. Oil paused its 9% slump on EU Oil ban and OPEC talk of capacity issues. Gold under $1850.  Asian shares off 2-year lows (Nikkei +0.18%). Chinese Inflation hotter than expected, Biden supports FED actions, more Fed members talk rate hikes, NZ housing market shows signs of cooling. US House of Representatives approves $400bn support package for Ukraine as US intelligence chief talks of Putin preparing for “long war”.

  • USDIndex remains under 104.00 but holds its bid trading at 103.75 now.
  • Equities – USA500 +9.81 (0.25%) at 4001.05, US500FUTS at 4015 now. Peloton -8.7% @ $12.70 (ATH was $171), COIN -12.6%, $TSLA +1.64%, $TWTR -1.64% (Musk would allow TRUMP back). APPLE (+1.61%) retired the iPod after 21 years.
  • Yields cooled -10-yr closed at 2.993%, below key 3.00% level.  Trades down over 1.5% today at 2.98%.   
  • Oil & Gold both had weak & volatile sessions –  USOil tested down to $98.00 before reversing to $102.20  Gold slumped from  $1865 to $1830 earlier and struggles at $1845 now. No safe-haven bid.
  • Bitcoin languishes at $31K now, over 50% down from ATH and -35% YTD
  • FX markets – EURUSD up from 1.0500 to 1.0545, USDJPY holds over 130.00, at  130.25 and Cable continues to struggle at 1.2335.  AUD outperformed in Asia.  

Overnight – CHINA CPI  & PPI hotter than expected, (2.1% vs 1.5% & 8.0% vs 7.8%) respectively.  JPY leading Indicators  better than expected & German M/M CPI in-line at 0.8%.  ECB’s Müller: Appropriate to raise rates into positive territory by year-end. Fed’s Waller & Mester more hawkish. (Mester talked of going beyond neutral)

Today – US CPI, Speeches from Fed’s Bostic, ECB’s Lagarde, Schnabel, Elderson, de Cos, Centeno, Vasle & Muller. Earnings from Ubisoft, Siemens Energy, Poste Italiane, E.ON, Continental, ITV, Compass & Beyond Meat.

Biggest FX Mover @ (06:30 GMT) AUDUSD (+0.42%) Rallied from lows at 0.6910 yesterday to 0.6970 now, next resistance 0.6980 and 0.7000 today. MAs aligning higher, MACD signal line & histogram moving higher & testing 0 line, RSI 56 & rising, H1 ATR 0.0016, Daily ATR 0.011.

About the author

Stuart Cowell

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.