2021-05-14 07:18:41
Vantage FX Market Outlook for 14th May 2021
#Risk sentiment is likely to remain risk off. Most Asian stocks climbed Friday after U.S. benchmarks halted a three-day slide, with signs of a strengthening labor market outweighing investors’ concerns about rising inflation for now. Elon Musk said the electric car-maker is suspending purchases using Bitcoin over environmental concerns. Coinbase Global Inc fluctuated in late trade as the biggest U.S. cryptocurrency exchange reported revenue below Wall Street estimates. Markets appear to have recovered from a bout of volatility following an unexpectedly sharp increase in the U.S consumer price index. Oil traded below $64 a barrel.
#DXY US Dollar Index added 0.09%, trading near weekly highs as higher than expected inflation data spooked investors away from risky assets as the global economic recovery accelerates. Local 10-year bond yields held near 2-week highs of 1.663%. Fed officials have persistently played down inflation risks saying they are transitory. Dollar is expected to fluctuate and trade sideways as investors worry about inflationary pressure. This is accompanied with the expectations of recovery from the virus.
#Gold Gold pared recent gains after reaching a 3 months high, buoyed by the risk-off market sentiment. Elsewhere, the US annual inflation rate jumped to 4.2%, the highest in 13 years, raising concerns that the Fed might be forced to tighten monetary policy ahead of expectations following higher inflation. Meanwhile, Gold prices could edge higher, buoyed by rising concerns of rising inflationary pressure as the precious metal is often seen as a hedge against inflation. Meanwhile, rising coronavirus crises as infection rates continue to accelerate in India and Japan which could boost demand for the safe-haven asset as investors seek shelter to ride out the storm.
#CrudeOil #Oil Oil prices fell about 3% on Thursday as the crisis in India deepened in regards to coronavirus. Colonial Pipeline, one of the key U.S. fuel pipelines, resumed operations which halted the rally to an eight-week high. The Release of consumer price data from the U.S. this week has come stronger than expected, stoking inflation concerns which could force Fed to raise interest rates, in turn pressuring Oil prices, a dollar-denominated commodity. WTI crude fell 0.4% to 61.59 a barrel, while Brent oil dropped 0.5% to $66.75 a barrel.
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