Stocks halted a three-day slide, with investors migrating to value from growth companies as signs of a strengthening labor market tempered inflation worries.
Industrial and financial shares led to gains in the S&P 500, while energy producers joined a slump in oil. The tech-heavy Nasdaq 100 underperformed major equity benchmarks as Tesla Inc. slipped after Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using Bitcoin. In late trading, Coinbase Global Inc. sank as the biggest U.S. cryptocurrency exchange reported revenue below Wall Street estimates.
Confidence in an economic revival that’s reigned supreme amid continued Federal Reserve stimulus has been recently jolted. Data Thursday showed producer prices rose by more than forecast in April, and jobless claims fell. While some investors insist the surge in inflation is a one-off reopening burst, the broader markets are hedging against the possibility it may persist and force the central bank to take action.
Officials have been trying to drive home the message that they see inflation spikes this year as transitory, in contrast with heightened Wall Street concern about runaway prices. Increases above the central bank’s 2% goal should be temporary but may last through 2022, said Fed Governor Christopher Waller.
The Fed tweaked its plans for buying Treasuries, keeping the monthly pace at about $80 billion but focusing more attention on securities maturing in seven years or longer.
A gauge of the dollar’s strength stalled Thursday on the back of the biggest rally in two weeks, with traders weighing signs of a reopening economy against the risk that higher inflation may persist. U.S. 10-year Treasury yields slid and the benchmark S&P 500 rose. 10-year Treasury yields slid to 1.67% as commodity prices eased.
Still, an index measuring the three-month implied volatility of the Bloomberg Dollar Spot Index retreated after reaching the highest since April; the Bloomberg Commodity Index fell.
Traditional haven currencies such as the Swiss franc and Japanese yen advanced as commodity-linked peers, such as the Canadian and Australian dollars slipped versus the dollar. USD/JPY slid 0.2% to 109.50; Pair may be supported by a substantial amount of short-dated forward hedging at the 109.58 spot equivalent level, DTCC data shows. AUD/USD rose as much as 0.4% to 0.7746, erasing an earlier loss.
The New Zealand dollar was among the day’s top-performing Group of 10 currencies amid a better risk tone, though nearly NZD1.3b of 0.7260/70 strikes expiring May 18 may slowly climb. NZD/USD jumped 0.3% to 0.7180 after earlier rising 0.5%, the most since May 7.
USDJPY (4 hour Chart)
Japan yen remains struggling in a tiny way with consolidative movement throughout the day market, losses -0.14% while trading at 109.449 as of writing. Meantime, the U.S. shares market convalesced from yesterday bleak as initial jobless claim data beat expectation led greenback to enact risk-on sentiment intraday. For the technical aspect, the RSI indicator shows 59 figures, which suggests a bullish momentum sentiment. On average price view, 15-long SMA indicator is an ongoing upper slope in day market and 60-long SMA turned slightly upside slope.
According to price action, it seems the yen built comfortable short-term support in 109.45 around which is the lowest point in the day. For long-term views, we believe yen will go along with indicators momentum, namely, ratch up to the higher floor. Therefore, the first immediately is on 109.45 and the critical support level will be 109.042.
Support: 109.45, 109.042, 108.37, 107.937
GBPUSD (4 Hour Chart)
The pound traded with stress below the recently low level as U.S. PPI rose 0.6% in April after surging to 1% in March. For the YoY aspect, the PPI boom to 6.2% which is the biggest rise record since 2010. Pound trading at 1.4053 with withholding unmove in the day market. For the RSI side, the indicator shows a 49 figure, suggesting a neutral momentum at this stage. On the other hand, 15-long SMA indicators retain the south side trend after hard struck in the day, and 60-long SMA indicators remaining a teeny-tiny ascending movement.
Overall the market move-in day, pound once poised to testing 1.4 level but pull up after mire in the daily low. In light of recent perspective, we still foresee 1.4 level would be and have to be the strong support for bullish favor despite faltering movement.
Resistance: 1.4155, 1.42
Support: 1.3959, 1.4
USDCAD (4 Hour Chart)
Loonie continues it bounced up the trail which once achieved weekly high above 1.22 level then slightly retreated modestly, trading at 1.216 with up 0.24% as of writing. Bank of Canada Governor noted on Thursday that further loonie strength could impact policy decisions. Meantime, WTI crude oil drop 3.51% in the day, industrial material wide-ranging retreat it upside traction as greenback missed bullish movement.
For the RSI side, the indicator continues to rally to a higher stage, shows a 56 figure which suggests a slightly bull movement. For moving average side, 15-long SMA indicator remaining upside movement and 60-long SMAs indicator turn it slope to positive way.
As we mentioned recently, loonie successive correction of bearish traction to a higher level, yet, undermine the momentum after touched 60 SMA indicator. For currently, we expect the market will extend its consolidation movement in a range between 1.2264 and 1.2079.
Resistance: 1.2264, 1.238, 1.2491