Market Update – May 24 – Bear Market Rally?

USD slipped again (USDIndex down a whole big number), Stocks rallied as Euro moved higher on rate hike expectations, Asian markets fell (Nikkei -0.97%) after Snap’s profit warning and US Futures are lower. Shanghai & Beijing tightening Covid rules, Biden no change to Taiwan policy, Ukraine is a global issue prodding neutral countries. Zelenskiy says he would meet with Putin to end the war.

USDIndex down to 102.00 and 6th down day of last eight.
EquitiesUSA500 +72 (1.86%) at 3973, US500FUTS at 3914 now. Snapped by Snap.
Yields down, 10-yr closed at 2.83%, now up 2.87%   
Oil & Gold both had negative sessions – USOil down to test $108.75 Gold holds $1850 today, down from 1864.  
Bitcoin rotates through $30K – but under today at 29.8k.
FX marketsEURUSD up to test 1.0700, parity calls falling. USDJPY under 128.00, at 127.55, Cable up to 1.2580.  AUD under performed in Asia.  

OvernightJPY & AUD PMIs miss, NZD retail sales miss and hotter JPY Tokyo CPI all weighed.

Eurozone PMIs disappointed. The German composite PMI unexpectedly improved, but that wasn’t enough to lift the overall Eurozone numbers. The S&P Global Composite PMI dropped to 54.9 from 55.8, with both manufacturing and services readings coming in weaker than anticipated and flagging a renewed deceleration in the pace of expansion. The recovery continues, but at a slower pace and with the balance of risks still tilted to the downside, thanks to the threat of cut off gas deliveries from Russia.

Today – EZ, UK & US Flash PMIs, US ISM Semi-annual Economic Forecast, Speeches from Fed’s Powell, ECB’s Lagarde & Villeroy. 

Biggest FX Mover @ (06:30 GMT) NZDJPY (-1.20%) Drifted to 81.79 from 82.80 highs. MAs aligning lower, MACD histogram turned negative however signal line remains above 0, RSI 29, OS & falling, H1 ATR 0.00208, Daily ATR 0.01413.

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Stuart Cowell

Head Market Analyst

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