Daily summary: Upbeat sentiment on Wall Street fades away, USD slips again

5:59 PM 28 March 2023
  • European indices finished today's choppy session marginally higher with DAX and CAC40 up 0.09% and 0.14% respectively.  
  • Earlier gains were mostly erased following reports that  French authorities searched offices of several large banks, including Société Générale, BNP Paribas and HSBC on the suspicion of money laundering and fiscal fraud. 

  • ECB's Muller said it is still possible to hike rates further.

  • Mixed moods prevails  also on Wall Street. Dow Jones trades slightly below the flatline, while S&P500 and Nasdaq fell 0.35% and 0.80% respectively as concerns over the health of the US banking sector eased a bit, however at the same time investors remained worried about further rate hikes which could push the US economy into recession. 

  • Goldman Sachs now estimates the probability of the US economy falling into recession within the next 12 months at 35%, up from previous 25%.

  • Rate-sensitive tech giants including Microsoft, Alphabet, Apple, and Tesla fell between 1% and 3% as US 10 Year Treasury yield rose to 3.57%. 

  • Alibaba Group Holding stock rose nearly 10.0% on Tuesday as it plans to split its business into six separate units covering e-commerce, media, and the cloud. 

  • US March consumer confidence 104.2 vs 101.0 expected.

  • Precious metals manage to reverse some of the recent losses amid a weaker dollar. Gold bounced off support at $1950 and approaches local resistance at $1975, while silver is testing a crucial resistance zone around $23.20.

  • WTI Oil Climbs 1.4% to 2-week intraday high $73.90 amid possible SPR refilling. Meanwhile Russia expects oil and gas production in the country to decline in 2023.

  • The dollar index slipped below 102.5  and fell for the second straight session as traders are moving away from the US dollar towards commodity currencies, which benefit from the return of upbeat sentiment. EURUSD pair climbed to 1.0840 level.

  • Cryptocurrencies are trading mixed - Bitcoin is moving towards recent lows at $26500, while Ethereum tested local resistance at $1750. Ripple rose over 5.0% and reached 5-month high at $0.50 as some analysts believe that the classification of major tokens as a commodity in the CFTC filing against Binance could mean XRP tokens were, too, commodities instead of a security, as alleged by SEC in the ongoing court case.

USDCAD finally managed to break below the key short-term support at 1.3655. According to the Overbalance methodology, this may point to a change of the main sentiment to bearish. The level of 1.3655 should be treated as the first line of resistance. In turn, nearest support to watch can be found around 1.3535 and 1.3475 levels. Source: xStation5

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