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Oil falls under $100, extends sell-off

“If you define yourself by how you differ from the competition, you’re probably in trouble.” — Omar Hamoui 

 

 

 

HEADLINES

 

 

 

  • Commodity currencies bounce back but sentiment remains fragile 
  • Gold firms as dollar rally pauses; focus on U.S. inflation reading
  • Oil tumbles on global economic worries, strong dollar
  • U.S. oil dips below $100 pressured by economic worries, strong dollar
  • S&P 500 rises in volatile trading as market tries to recover from 3-day losing streak
  • Bitcoin investors are panicking as a controversial crypto experiment unravels
  • GBP/USD: Losses below 1.23 looks to be in store – Scotiabank
  • AUDUSD Near Term: Downside favored

 

 

 

FOREX

 

 

 

Commodity currencies bounce back but sentiment remains fragile 

 

 

Commodity currencies Norwegian crown and the Australian dollar recovered some ground on Tuesday after hitting their lowest levels in nearly two years against the U.S. dollar, tracking a rebound in European and Chinese stock markets. 

But traders said sentiment remained fragile and was keeping the safe-haven dollar near a 20-year high, while risk aversion kept the euro flat.

The Norwegian crown rose 0.5% to 9.6635 crowns per dollar, after falling to its lowest since June 2020.

 

 

 

COMMODITIES

 

 

Gold firms as dollar rally pauses; focus on U.S. inflation reading 

 

Gold rose on Tuesday as the dollar in which it is priced steadied, prompting some investors to buy the metal ahead of U.S. inflation data that could impact the Federal Reserve’s monetary policy. 

Fears of a possible global economic slowdown amid aggressive policy tightening by major central banks and soaring inflation have soured sentiment in global share markets.

Higher yields also tend to boost the dollar, dimming appetite for gold among overseas investors.

 

 

ENERGY

 

 

Oil tumbles on global economic worries, strong dollar 

Oil prices tumbled more than 1% on Tuesday, extending the previous day’s steep declines as coronavirus lockdowns in top oil importer China, a strong dollar and growing recession risks fed worries about the outlook for global demand. 

On Monday, both benchmarks posted their biggest daily percentage fall since March, dropping by 5% to 6% since March.

The dollar held near 20-year highs, making oil more expensive for holders of other currencies.

 

U.S. oil dips below $100 pressured by economic worries, strong dollar

 

U.S. crude oil prices dipped below $100 on Tuesday to its lowest in two weeks as demand outlook was pressured by coronavirus lockdowns in China and growing recession risks, while a strong dollar made crude more expensive for buyers using other currencies.

Wall Street's main indexes also turned lower in volatile trading on concerns over aggressive monetary tightening and slowing economic growth.

Early in the session, comments from the Saudi and UAE energy ministers boosted Brent and WTI up by over $1 a barrel.

 

 

STOCKS

 

 

S&P 500 rises in volatile trading as market tries to recover from 3-day losing streak

 

U.S. stocks seesawed Tuesday as the major averages fought to recover from three days of heavy selling that brought the S&P 500 to its lowest level in more than a year.

The Dow Jones Industrial Average was last trading up 130 points, or 0.4%, after rising more than 500 points and dipping more than 350 points earlier in the session. The S&P 500 rose 1%, while the Nasdaq Composite added 2%.

Dow Transports dipped about 1%, dragging the index lower. The moves further signalled concerns of a recession as the industry is typically used to measure the strength of the economy. IBM, Home Depot, 3M and JPMorgan Chase fell more than 2% each, leading the market losses.

 

Bitcoin investors are panicking as a controversial crypto experiment unravels

 

Investors in bitcoin are in panic mode as the controversial terraUSD stablecoin slips further from its intended $1 peg.

TerraUSD, or UST, sank below 70 cents for the first time late Monday, as holders continued to flee the token in what some have described as a “bank run.” The token fell as low as 62 cents before regaining ground to trade at 90 cents Tuesday, according to Coinbase data.

 

 

ANALYSIS

 

 

GBP/USD: Losses below 1.23 looks to be in store – Scotiabank

 

“The 1.23 area provided support while gains peaked at 1.2376 that stands as resistance ahead of the figure area.”

“Losses below 1.23, which look to be in store given the GBP’s bearish trajectory, may find support at yesterday’s low of 1.2261.”

“The mid-figure area is the only noteworthy support point on the charts until 1.2076 (May 2020 low).”

 

 

CHART

 

 

AUDUSD Near Term: Downside favored

Technical View: Short position below 0.705. Target 0.686. Conversely, break above 0.705, to open 0.711.

Comments: The pair remains under pressure. Further weakness favored.

 

 

 

 

Source: Trading Central 

 

 

 

CALENDAR

 

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

Footnotes


https://www.cnbc.com/2022/05/10/forex-markets-dollar-oil-prices-bitcoin.html 
https://www.cnbc.com/2022/05/10/gold-markets-us-treasury-yields-dollar.html 
https://www.cnbc.com/2022/05/10/oil-markets-covid-in-china-dollar-recession-concerns.html 
https://www.reuters.com/business/energy/oil-slips-further-demand-financial-market-worries-2022-05-10/
https://www.cnbc.com/2022/05/09/stock-market-futures-open-to-close-news.html
https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html
https://www.fxstreet.com/news/gbp-usd-losses-below-123-looks-to-be-in-store-scotiabank-202205101317