With no fresh central bank decisions to get excited about this week, focus turns to the overall macro picture and hard economic data releases to influence price action:
Monday, May 15
Tuesday, May 16
Wednesday, May 17
Thursday, May 18
Friday, May 19
In the absence of bad news from the US banking sector, market volatility has sunk in the Vix, commonly known as Wall Street’s “fear gauge”, which is back below its long-term average.
Fears about US interest rate rises have also eased, especially after last week’s latest US inflation data which showed elevated monthly prints, but a softer side to services inflation in the part of the economy which has been running particularly hot.
The above narrative has money markets consolidating bets around three 25 basis-point rate cuts for the rest of this year.
However, the slew of Fed speakers this week could see them push back against this dovish pricing given the job market remains tight and that both core and headline monthly inflation is still strong.
This could give added legs to last week’s dollar rally which is battling with the US fiscal drama and debt ceiling crunch, as well as lingering banking stress and the tightening in lending conditions.
The main datapoint will be April US retail sales which should get a lift from decent auto sales figures.
The weekly jobless claims numbers are also getting some attention as they appear to be moving higher as a lagged response to the surge in job lay-off announcements.
From a technical perspective, the USDInd has clambered back above its 50-day simple moving average (SMA), which is now being relied on for immediate support.
Further USD strength may see this dollar index pushing above its 100-day SMA.
To the downside, a break below its 50-day SMA may next call upon the early-May cycle high at 102.375 as the next critical support level.
The calendar is fairly light Stateside with Monday’s ISM services PMI the only real top-tier data, offering little scheduled “spark” on the USD side of the equation this week.
5 June 09:59
China’s weaker-than-expected non-manufacturing PMI, released just hours ago, have sparked a flight to safety.
31 May 12:17
Although the US dollar index is now easing away from overbought conditions, it’s still trading around a two-month high.
29 May 10:15
The drama of the fiscal situation in the world’s biggest economy continues to be front and centre in the minds of investors.
24 May 08:30
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