Summary:
Weak data weighed on U.S. dollar. Gold hovered around $2,000 and oil plunged to the lowest level since the end of March.
Weak data weighed on U.S. dollar. Gold hovered around $2,000 and oil plunged
to the lowest level since the end of March.
There were 245,000 initial jobless claims in the week ending April 15 versus 240,000 expected, the weekly data published by the US Department of Labor showed on Thursday.
Pricing pointed to an almost 90% probability of a one-quarter rate hike in May and 70% of a pause in the following month.
Major U.S. indices ended down after disappointing quarterly reports from companies including tesla which slid by nearly 10% due to its 24% YoY profit drop in Q1.
Commodities
Few new clues could be found in the latest speeches from New York Fed President John Williams and Cleveland Fed President Loretta Mester. Some experts predicted further hikes after May meeting.
"If the labor market stays resilient and inflation stays persistent - as they do in our forecasts - the Fed is likely to hike not only in May but again in June and July," said Andrew Hollenhorst, chief U.S. economist at Citi. "Risks are two-sided, but we maintain our modal expectation for a terminal policy range of 5.50%-5.75%."
‘For gold to make that run back to record highs, you need the June rate hike completely off the table,’ Edward Moya, senior market analyst at OANDA, said.
Oil prices fell by about $2 to their lowest level since OPEC+ surprise cuts, dragged lower by recession fears despite better-than-forecast China Q1 GDP.
Forex
The Philadelphia Fed's manufacturing index hit the lowest reading since May 2020 and existing home sales resumed downward trend in March.
EUR/USD sat comfortably around one-year high seen last week. The ECB is expected to raise interest rates by 25bp in May with risk skewed to the upside.
‘If the U.S. is leading the world into recession, it’s hard to see a big demand for the dollar,’ Wells Fargo’s Nelson added.
Oil prices steadied on Friday, set for a weekly loss, as the Fed and ECB's cautious stance fueled global economic concerns.
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The October PCE price index rose 2.3% YoY, as expected. Excluding food and energy, core inflation climbed 2.8% compared to last year.
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US stocks plunged, with the Dow Jones hitting a record low. Many strategists see potential for further gains, while Tesla's stock hit a new high.
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