Currencies

 

EUR/USD – has been moving up as the data out of the Eurozone indicated that inflation has been picking up as well as several PMI data sets. This, combined with the weaker USD sent the pair above the 1.05 level again. The FOMC meeting minutes caused the USD to weaken even more, as they expect the pace of the rate increases to slower than what the market initially anticipated, at least that is what is being concluded from the minutes.

 

USD/JPY – has been moving down after failing to breach the resistance level, and is currently close to the support level just below the 116 level. This comes as the USD weakened, especially after the FOMC meeting minutes.

GBP/USD – the data out of the UK was again better than expected and this time it was able to benefit as the USD was losing ground across the board. We will have more data out of the UK today, but we will also start looking forward towards the NFP of tomorrow.

 

USD/CNY – is dropping sharply and not only because the USD has been weakening. The main reason is that the CNY is strengthening so much is the interference of the PBOC and the Chinese government to stem the depreciation the CNY.

USD/MXN – reached a new record high as the fact that Ford canceled its plans for a factory in Mexico continued to filter through. Obviously it is not the decision by Ford itself has such a great impact, but the fear that this is only the beginning and more and more US companies will refrain from moving to Mexico or will even downsize their presence.

 

Bitcoin – what can we say here, it really looks like it knows only one way and that is upwards. Since November we can count the days it dropped on two hands and in the meantime added another $400 in value. It has now broken above the previous all-time high and is marking a new record high.

 

Indices

 

Dollar Index – was trading down for most of the day and after the FOMC meeting minutes, we saw another leg down as it became apparent that we might see a slower pace in rate hikes that was initially expected.

 

S&P 500 – moved up as there is still enough optimism to drive the equity markets higher, especially since the FOMC also sees growth continue, which is being reinforces by the continuing strong data out of the US. Also good is that the speed of the rate hikes might be slower than we anticipated after the FOMC statement of last month.

 
 

Commodities

 

Gold – was finally able to break through the resistance around the 1163 level and is currently already trading at the next resistance level around the 1177 level. The year started very bullish for gold, already up just about $30 an ounce since the beginning of the year and is now at the highest level in almost a month.

 

Natural Gas – is extending its losses even further after the very large drop on Tuesday due to the soft weather forecast in the US. Today we will also have the storage report which could cause some added volatility.

 

Oil – traded down for most of the day, amid reports that the production in Libya is increasing, but in the course of the day we saw oil move up. This came as the USD started to weaken, but also because there is still hope that production overall will be lower, and there was a report that showed OPEC production in December was down already. The fact that car sales in the US is booming, which in turn increases the demand for oil was also bullish for oil. In addition we saw that the API inventories showed a large decline of over 7 million barrels. However, I must note here, that we have seen a very large discrepancy between the API and EIA data over the last few weeks of several million barrels. In any case, production will be an interesting factor as well, as the expectation is that this will be increasing due to the higher oil price.

 
 

Stocks

 

GM – rose nicely as the number of car sales (mentioned above) saw a significant increase, of which the car manufacturer also benefited.

 

Tesla – has activated its much touted gigafactory and started to produce battery cells that it uses in its electric cars.

 

source - http://www.sharptrader.com/market-update-05-01-2017/

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