Bountiful indices, busy inflation, brave USD & bullish commodities
01 June 2023
It is Thursday and we can already say that the largest number of attractions this week can be seen on indices, who are currently undergoing a correction. S&P 500 found a place on the 4180 support and for the past several hours has been moving sideways, without giving up any hints about its future direction. DAX found a support at the 15650 after a sharp drop and is currently trying to initiate a small bounce. Dow Jones is still defending the lower line of the triangle, keeping the sellers away from the chart. As you can see, we have a short-term bearish sentiment, but I wouldn’t really call it a walk in the park.
The calendar saw a few important numbers yesterday. First of all, we received a slightly higher inflation from Australia and a lower one in Germany. The day ended with the better-than-expected JOLTS Job Openings from the US. The first day of the month looks busy, too. After the start of the European session, we will get a flash estimate of the latest inflation in the Eurozone expected to come at 6.3%, which would be a significant decline from the 7% reported previously. In addition, we are awaiting the ADP report, as well as the usual claims from the US. The day will end with the ISM Manufacturing PMI from the US expected to come at 47.
On the Forex market, the strongest currencies right now are the AUD and USD, where the rise of the latter one shouldn’t surprise. The weakest currency in the pack is currently the Japanese yen with a correction of the move from the first half of the week.
As regards commodities, we saw a sharp drop in the prices of oil yesterday. If you follow our reports closely, you know that we were expecting this for quite some time. Brent managed to reach the lows from the beginning of May, which is actually a promising place for a bullish correction. Buyers are using this opportunity and, as seen at the beginning of the European session, oil is rising. Precious metals are also undergoing a bullish correction, but they did start a bit earlier and, as of the moment, the price is losing a bit of momentum. The mid-term sentiment remains negative.