Show must go ON
18 May 2023
If you just opened the charts and are wondering about the upswing you saw, then you may be actually surprised with the reason why it’s there. Apparently, the US government will not default, as we found out yesterday, which is improving the mood on the market. I guess that nobody ever believed that the US government will default, so this drama is really just a cheap soap opera. Anyways, buyers need a reason and they got one.
Nasdaq is currently making new long-term highs. The positive session in the US yesterday and Asia today spread on the European markets, too. DAX surged and is currently trading on long-term highs. The French CAC also climbed higher and the current upswing looks like a definite successful defence of the 7370 supports. From this point onwards, the French index should be climbing higher.
The American Dollar is also enjoying the news. The EURUSD made another monthly low today. The USD is currently the strongest currency in the pack and we can also see rise on the NZD and JPY. Interestingly enough, the AUD is going lower, which is caused by the poor data from the Australian job market. The Employment Change was negative and came at -4.3K, instead of 24.8K anticipated by the economists. The unemployment rate rose significantly from 3.5% to 3.7%, which was also against expectations.
Major commodities are moving in the opposite directions today. Precious metals are continuing their downswing, which is driven by the risk ON mode and the stronger USD. Oil, on the other hand, is climbing higher driven by…the risk ON mode too… The general consensus seems to be that the recession is over (what recession?), which should spark demand for the fuel.
The calendar today is pretty quiet for a Thursday. We already had this job data from Australia and we are still awaiting the Claims from the US. The day will end with a speech by the BoC Governor Macklem. The Canadian Dollar was the second strongest currency yesterday - let’s see if its rise continues after the speech.