Daily Broad Market Recap – May 8, 2024

Who works late because he is a merchant ̶s̶i̶n̶g̶e̶r̶?

It doesn't have to be espresso Today because we have all the details on how the major financial assets moved yesterday.

With no major market movers on Wednesday, this was a perfect opportunity for major assets to respond to their individual catalysts.

Titles:

• Bank of Japan Governor Ueda They told Parliament they “may need to respond with monetary policy” because exchange rate movements affect the economy and prices
• Industrial production in Germany For March: -0.4% m/m (-0.6% expected, 1.7% previously); -3.3% YoY (vs. -5.3% previously)
• Retail sales in Italy March: 0.0% monthly (0.2% expected, 0.1% previous)
• Crude Oil Stocks in EIA It fell by 1.4 million barrels in the week ending May 3, more than the expected decline of 1 million barrels and the rise of 7.3 million barrels in the previous week.
• FOMC voting member Lisa Cook They noted that US households, companies and banks appear well-positioned to absorb potential financial shocks
• RICS UK House Price Balance The index was unchanged at -5% in April
• Average cash income in Japan Grew by only 0.6% YoY (1.5% expected, 1.4% previous)
• Real wages in Japan Declined 2.5% y/y in March – fastest decline in four months – vs -1.4% y/y – Estimates
• Summary of the Bank of Japan's views Show plans to maintain accommodative policies.”For a fairly long time“If inflation remains below 2%, but there is also a desire to”Deepening the debate on the timing and degree of raising interest rates“

Broad market price movement:

While the rest of the market remained within ranges, Bitcoin (BTC/USD), crude oil and US 10-year bond yields saw volatility.

Crude oil saw some volatility, initially taking a hit from a surprise crude oil inventories report from the American Petroleum Institute (API). But prices have rebounded again – perhaps thanks to news from Russian Deputy Prime Minister Alexander Novak that OPEC+ is not planning any production increases at its next meeting on June 1. Another development came as EIA crude oil stocks lost their mark, which also gave a rise. WTI prices are good.

In the world of cryptocurrencies, the BTC/USD pair fell slightly after hitting resistance at the $63,000 level, which was previously a support area. Meanwhile, US 10-year bond yields maintained their recovery path. There are no immediate catalysts, but fading prospects of a Fed rate cut in September – from 65% from 70% earlier this week – appear to be pushing yields gently higher.

Forex market behavior: US dollar against major currencies

Overlay of the US dollar against major currencies Chart by TradingView

The US dollar had a mixed day against its counterparts. In particular, USD/JPY and AUD/USD confirmed the strength of the dollar. The Australian dollar is likely to extend losses following a less hawkish-than-expected Reserve Bank of Australia decision earlier this week, while a lack of threats of intervention may have pushed the USD/JPY pair higher on Wednesday.

The lack of high-level reports from the US and other major economies is also likely the reason why the US dollar ended the day almost unchanged against its other major counterparts.

Potential catalysts coming on the economic calendar:

• The markets of Switzerland, France and Germany are on holiday
• The Bank of England will release its policy decision and revised economic forecasts at 11:00 AM GMT
• Initial US unemployment claims at 12:30 PM GMT
• The Bank of Canada's financial system will be reviewed at 2:00 PM GMT
• Bank of Canada Governor Macklem will deliver a speech at 3:00 PM GMT
• Bank of England Monetary Policy Committee member Hugh Bell will deliver a speech at 4:15pm GMT
• NZ BusinessNZ Industrial Index at 10:30pm GMT
• Japanese household spending at 11:30pm GMT

The Bank of England (BOE) is here today, and the news is that we can see its policies unchanged! Bank of Canada (BOC) Governor Macklem will also be in the spotlight, so be sure to keep a close eye on your GBP and CAD trades!

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