Morning wrap (08.05.2023)

8:50 am 8 May 2023

  • Indices from Asia-Pacific are trading mostly higher today, potentially responding to superb Wall Street session on Friday when all major US indices gained over 1.5% 

  • S&P/ASX 200 gains 0.8%, Kospi trades 0.6% higher and Nifty 50 adds 0.8%. Indices from China trade up to 1.7% higher. Nikkei is a laggard and drops 0.7%

  • DAX futures point to a slightly higher opening of the European cash session today

  • Fed's Bullard said he thinks US central bank will have to rise rates higher as decline in inflation is expected to be slow

  • Financial Times reports that US President Biden will meet with top congressional leaders on Tuesday to try to resolve debt limit crisis

  • US Treasury Secretary Yellen said that the US faces a potential constitutional crisis if it fails to resolve the debt ceiling issue. Yellen said that without a deal, US government will be able to pay its bills only through early June

  • Financial Times reports that European Union is readying sanctions on Chinese companies supporting Russia's war in Ukraine

  • Chinese foreign minister and the US ambassador to China met and discussed a range of topics today, including Taiwan. Chinese statement after the meeting called for stabilization in US-China ties

  • ECB Knot said that he supported 25 bp rate hike at last week's meeting and also said that he could support further rate hikes, even above 5% if needed

  • According to Vitol, gasoline demand in China has surprised to the upside recently but jet fuel demand is struggling

  • Australian building approvals dropped 0.1% MoM in March (exp. +3.0% MoM)

  • Cryptocurrencies are pulling back - Bitcoin drops 1.9%, Ethereum trades 2.1% lower while Dogecoin plunges 2.6%. Binance experienced issues with Bitcoin withdrawals over the weekend but has managed to resolve them already

  • Energy commodities are trading higher - Brent and WTI trade 0.6% higher while US natural gas prices jump almost 4%

  • Precious metals benefit from USD weakness - gold adds 0.2%, platinum gains 0.5%, palladium jumps 1.2% and silver trades flat

  • AUD and NZD are the best performing major currencies while CAD and USD lag the most

Gold plunged on Friday and realized a textbook range of the breakout below the neckline of a double top pattern. Declines were halted at the 200-hour moving average (purple line) and now precious metal attempts to recover. Source: xStation5

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