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6:08 PM · 27 May 2021

Daily summary: GBP gains amid rate hike comments, gold prices below $1900

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  • European stock markets mixed

  • Wall Street moves higher amid new reverse-repo record

  • GBP gains on rate hike comments

  • Gold prices return below $1900 an ounce

European stock markets finished today’s session in mixed mood. Blue chip stock indices from Germany and UK closed slightly lower, but CAC 40 and FTSE MIB gained 0.69% and 1.12% respectively. Equities from the US continue to move higher with small caps being top gainers today. Meanwhile, some meme stocks from the US continue their rally - AMC is surging over 30% at press time. The excess liquidity was shown by the Fed’s reverse repo numbers that climbed hit new all-time high as 50 counterparties parked $485 billion in reserves with the Fed! 

GBP caught a bid after a BoE policymaker said the central bank was likely to raise interest rates well into next year, adding that a rate hike could come even earlier if the economy recovers more quickly than anticipated. GBPUSD climbed above 1.4200 in the evening.

Today’s calendar was dominated by a set of economic data from the US. Jobless claims stood at 406k, below expected 425k. Core durable goods orders for April surprised to the upside (1.0% MoM vs exp. 0.8%). Apart from that, Wall Street CEOs continue to testify before the US Congress. 

Tomorrow investors will focus on flash CPI figures form France and core PCE from the US for April as inflation still remain a critical factor for various asset classes. Nevertheless, markets await even more data from the US, including Chicago PMI, personal income & spending figures or Michigan Consumer Sentiment (along with Michigan inflation expectations). 

GOLD has been moving in an upward trend. Despite the fact that the price broke below $1900 an ounce today, sellers were not able to push the price below $1890 mark (recent highs). Should they succeed, the area at $1876 would be they next support to watch (lower limit of the 1:1 structure). According to Overbalance methodology, as long as the price stays above, the trend remains upward. Source: xStation5

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