Published On: Mon, May 1st, 2017

Midday Market Review


Today, in the first half of the day the US Dollar was strengthening against its European counterparts. The American currency was growing as the US Congress reached a deal on Sunday that averted a government shutdown. Congressional negotiators agreed on the federal budget that will amount to $ 1.1 trillion. As the result, the EURUSD pair fell to the level of 1.0885 but currently is corrected to 1.0900. Similar situation is happening in the GBPUSD pair. Here, however, the Pound was additionally pressured by the news about Brexit. On Saturday, the EU leaders made a decision that the UK should fulfil its obligations to the Union (of around 60 billion Euro) before starting new trade negotiations. As the result, the pair fell to the level of 1.2900, but is currently corrected to 1.2930. It is worth noting that today market participants are waiting for important data on the ISM Manufacturing PMI for April in the US and US Treasury Secretary Steve Mnuchin appearance that might be particularly important before the upcoming Fed meeting.

In the Asian region, the US Dollar is showing mixed dynamics. Against the Yen it strengthened by 0.45%, the pair rose to the level of 111.90 and at present is trying to correct. The Japanese currency is pressured by data on Nikkei Manufacturing PMI for April. The index came out worse than forecasts, having declined to 52.7 points. The Australian Dollar, on the other hand, strengthened and the AUDUSD pair rose to the level of 0.7518. Growth in the Australian currency was due to data on the AiG Performance of Mfg Index that substantially exceeded its previous reading, having risen to 59.2 points.

Today metals significantly fell amid the agreement on the federal budget in the US. Gold lost 0.55% (to 1261.45), and silver lost 0.94% (17.02). At present, gold prices entered a range of 1261.45-1263.85 and silver is trading in the range of 17.02-17.10. Oil prices also remain in a range: Brent 52.00-51.88, WTI 49.00-49.30. In general, conditions on oil markets are negative. The decision on production curb extension by the OPEC+ is not made yet while shale production in the US continues growing – the number of oil rigs last week rose from 688 to 697 units.

Stock markets have an upward tendency today. The FTSE100 strengthened by 0.41% (to 7213.0), the DAX by 0.46% (to 5272.0) and the CAC40 by 0.52% (to 5272.5). However, both DAX and CAC40 are trading in narrow sideways ranges. The US indices are growing too as investors are satisfied with the decision on the US federal budget. The DOW strengthened by 0.28% to 20981.5, the S&P 500 by 0.37% to 2389.2 and the NQ by 0.46% to 5597.0.

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