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Daily Briefing, May 22 – Market Wrap & Key Economic Events to Trade

Market Wrap

  • On Tuesday, the global stock markets surged over the latest escalation in trade tensions between the US and China after the US lifted the ban on Huawei temporarily.
  • US stock exchange indices finished the day well with the Nasdaq up over 1% and the S&P and DJIA not far behind.
  • The Greenback persisted to grind back higher but did undergo some fluctuations as Sterling traded sharply on new Brexit updates as the hopes of a second referendum tried to push Sterling higher
  • Gold & crude oil traded in relatively familiar trading ranges with Oil drifting off to $62.46 and gold once again looking weak below $1,280.

What’s Next?

Looking ahead at today’s trading sessions, the Asian session is relatively quiet as the traders wait for the London session to trade the UK Inflation report. The London session marks the announcement of the latest CPI figures but once again Brexit is likely to have impacted the numbers. On the US session open, the focus will swing to Canada with the latest Retail Sales numbers and then it’s a long wait until the main order of the day, the latest FOMC Meeting Minutes.

GBP – CPI y/y

Brexit is very likely to dictate Sterling’s direction unless we see something well outside the expected 2.2% YoY print. The UK’s Consumer Price Index grew by 1.9% in April vs. 2.2% forecast and justify the Bank of England’s no interest rate hike for that month.

A stronger CPI data of 2.2% is on the cards for May. Despite the stronger numbers, the Bank of England is likely to keep rates unchanged over the uncertainty triggered by Brexit talks.

CAD – Core Retail Sales m/m

The figure shows a change in the total value of sales at the retail level, excluding automobiles. A higher number of retail sales signals growth in the economy. Statistics Canada is due to release the figure at 12:30 GMT. Canadian retail sales surprised the market with a 0.6% jump in April. Another jump of around 0.8% is on the cards in May.

USD – FOMC Meeting Minutes

The dollar turned bearish after the Federal Reserve kept the interest rates low in April and May over signs of a global economic slowdown.

At 18:00 GMT, the FOMC meeting minutes will shed some light on a few major topics. Such as how FOMC members interpret the trade war and the consequences of a trade war on the US economy. Should the Fed change its monetary policy? Well, that’s just my opinion about the current FOMC meeting minutes and I’m also expecting a neutral response of investors on its release.

USD – Crude Oil Inventories

A day before, the American Petroleum Institute (API) published that US crude stocks grew by 2.4 million barrels for the previous week.  The API also reportedly registered a stockpile accretion of 350K barrels in gasoline, but distillate stocks plunged by 237K million barrels.

Inventory figures from the EIA (Energy Information Administration) will be published later today at 14:40 GMT. The EIA figures are anticipated to show crude inventories falling by -1.2 million barrels which is way lower than 5.4 million build last week. It can keep oil supported today until the release of actual news.

Good luck and keep following FX Leaders.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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