Elon Musk buys Twitter

“I don’t know the word ‘quit.’ Either I never did, or I have abolished it.” – Susan Butcher 

HEADLINES

• U.S. dollar climbs to two-year peak as risk appetite tumbles; yuan drops
• Gold falls to 4-week low amid rate hike jitters, robust dollar
• Oil slumps over 5% to near $100/bbl on Shanghai lockdowns
• Wall Street mixed as investors fret about global slowdown
• Elon Musk to buy Twitter for $44 billion
• GBP/USD: Break below 1.27 to open up substantial losses toward 1.25 – Scotiabank
• EURJPY Near Term: Downside favored

FOREX

U.S. dollar climbs to two-year peak as risk appetite tumbles; yuan drops 

The U.S. dollar struck a two-year high on Monday as a wave of risk aversion hit global markets, while the Chinese yuan was set for its biggest three-day losing streak in nearly four years on growing worries of an economic slowdown in China. 

Against a basket of its rivals , the dollar gained 0.6% to 101.75, a level it last tested in March 2020.

China's yuan fell to a one-year low against the dollar and was last down 0.9% at 6.4575 yuan per U.S. dollar.

COMMODITIES

Gold falls to 4-week low amid rate hike jitters, robust dollar 

Gold prices slipped to their lowest in four weeks on Monday as prospects of aggressive policy tightening by the U.S. Federal Reserve and a stronger dollar dented the precious metal’s appeal. 

Gold is highly sensitive to rising U.S. interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. It is, however, seen as a safe store of value during economic and political crises. 

Oil slumps over 5% to near $100/bbl on Shanghai lockdowns 

Oil slumped over 5% on Monday to its lowest in two weeks on growing worries about the global energy demand outlook due to prolonged COVID-19 lockdowns in Shanghai and potential increases in U.S. interest rates.

Both benchmarks were on track for their lowest closes since April 11 after losing nearly 5% last week. Since soaring to their highest since 2008 in early March, prices have collapsed by about 25%.

That retreat has prompted U.S. speculators to cut their net long futures and options positions last week on the New York Mercantile (NYMEX) and Intercontinental Exchanges to the lowest since April 2020.

STOCKS

Wall Street mixed as investors fret about global slowdown 

Wall Street was mixed Monday, with China's COVID-19 outbreaks spooking investors already worried about rising U.S. interest rate hikes, while some high-growth stocks rebounded from recent losses.

Uncertainty reverberated across world markets, with Chinese shares marking their biggest slump since a pandemic-led selling in February 2020 and European stocks falling to their lowest in over a month on fears of strict restrictions in China.

Nearly a third of S&P 500 index firms are due to report this week. Of the 102 companies in the S&P 500 that posted earnings so far, 77.5% reported above analysts' expectations, according to Refinitiv data.

Elon Musk to buy Twitter for $44 billion

Elon Musk clinched a deal to buy Twitter Inc (TWTR.N) for $44 billion on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world's richest person.

Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.

Under pressure, Twitter started negotiating with Musk to buy the company at the proposed $54.20 per share price.

ANALYSIS

GBP/USD: Break below 1.27 to open up substantial losses toward 1.25 – Scotiabank 

“There are no major support markets between the 1.27 level and the 1.25 figure aside from the Sep 2020 low of ~1.2675 and psychological support at the figure and mid-figure areas.”

“Trading in oversold territory may slow the GBP’s decline as it did in mid-March which was followed by a three cents gain roughly.”

“Resistance is 1.2765/70 followed by the 1.28 zone and the mid figure.”

CHART

EURJPY Near Term: Downside favored 

Technical View: Short position below 139. Target 137.2. Conversely, break above 139, to open 139.6.

Comments: The pair breaks below support. 

Source: Trading Central
 

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar

SOURCES

https://www.reuters.com/business/finance/euro-inches-up-after-macrons-victory-gains-against-bruised-sterling-2022-04-25/
https://www.cnbc.com/2022/04/25/gold-falls-to-4-week-low-amid-rate-hike-jitters-robust-dollar.html
https://www.reuters.com/business/oil-prices-extend-losses-shanghai-lockdowns-hit-demand-outlook-2022-04-25/
https://www.reuters.com/business/futures-extend-selloff-after-rough-week-2022-04-25/
https://www.reuters.com/technology/elon-musk-buy-twitter-44-billion-2022-04-25/
https://www.fxstreet.com/news/gbp-usd-break-below-127-to-open-up-substantial-losses-toward-125-scotiabank-202204251342